Difference Between Goods And Services With Examples

What Are Goods?

Goods refer to the tangible consumable products, articles, commodities that are offered by the companies to the customers in exchange for money. They are the items that have physical characteristics i.e shape, appearance, size, weight etc. They are capable of satisfying human wants by providing them utility. Some goods are made for one-time use by the consumer while some can repeatedly be used.

Goods are the products which are traded on the market. There is a time gap in the production, distribution and consumption of goods. When the buyer purchases goods and pays the required price, the ownership is passed from the seller to the buyer.

Examples of Goods Include:

• Pen
• Ball
• Computer
• Pen
• Milk
• Refrigerator
• Television
• Phone etc

Types Of Goods

• Free goods: These are goods which are abundant in nature e.g air, water and land.
• Economic goods/commercial goods: These are goods which are scarce in supply, require payment and yield satisfaction to consumer.
• Public goods: These are goods that are owned and enjoyed collectively e.g hospitals, schools, roads etc.
• Merit goods: These are goods which are considered to be essential to the society e.g health and water.
• Demerit goods: These are goods which can have a negative impact on the consumer e.g Alcohol, Drugs, Junk food, tobacco.
• Complimentary goods: These are goods that are used together with others.
• Substitute goods: These are goods which can be used as alternatives.
• Inferior goods:These are goods whose demand falls with an increase in the consumer’s level of income.
• Luxury goods: These are goods whose demand and consumption increase as income of the consumers increase.
• Giffen goods: These are goods whose increase in price tend to increase their demand and consumption.

What You Need To Know About Goods

• They are tangible and with physical attributes i.e can be seen, touched or felt.
• Not always exhausted during use.
• Identical goods can be created through mass production.
• The price paid is for the possession or ownership of the good.
• The price paid is for the possession or ownership of the good.
• There is a time gap between the production and consumption of goods.
• Surplus goods can be stored for later use.
• Goods are easily separable from the producers.
• Customer can return purchased goods if not satisfied and can get refund.
• Goods can be identical.
• There is a time lag between production and consumption of goods.
• Goods can be quantified numerically.
• It is easy to compare quality of products.
• It is easy to compare quality of products.
• Goods are homogeneous and standardized products.
• The billing process of goods is a once off transaction.
• The quality of goods depends on the manufacturer.

What Are Services?

A service is an intangible activity, which arises from the output of one or more individuals. In other words, it is an activity carried out for someone else. Generally, services are intangible and have physical attributes or identity, they cannot be seen, touched, gripped, smelled, tasted etc.

Services can only be delivered at a particular moment and hence they are perishable in nature and cannot be distinguished from the service provider. Typically the point of sale is the basis for consumption of services. Services once bought cannot be returned or replaced but in some cases can get refund of money. Services can only be utilized but ownership is never transferred from the seller to the buyer. Usually the quality of service is mainly determined by the experience of the service provider.

Examples of services include:

• Banking
• Insurance
• Medical care
• Teaching
• Hotel service
• Transport service
• Communication etc

Types of services

• Direct Services: These are services that directly benefit the individual person. Examples include: Education, medical care, sports and games etc.
• Indirect Services: These are services the individual benefits from indirectly or commercially. Such services facilitate business activities. They include insurance, banking, transport and communication.

What You Need To Know About Services

• They are generally intangible and without physical attributes i.e cannot be seen or touched.
• Always used up or exhausted after every act.
• Services are difficult to make since they vary over time and provider.
• Price paid is the effect of the act or the effort.
• There is no time gap between the production and consumption of services.
• Services cannot be provided in excess and once provided cannot be stored for later use.
• Services are inseparable from the providers.
• Services once bought cannot be returned or replaced but in some cases can get refund of money.
• Services are generally diversified.
• Production and consumption of services occurs simultaneously.
• Services cannot be quantified in terms of numbers.
• It is difficult to compare the quality of services offered.
• Services are heterogeneous and non-standardized activities.  
• Billing process can be continuous in the form of subscriptions for services rendered.
• Quality of a service depends on the experience of the service provider.

Difference Between Goods And Services In Tabular Form