PPT - Business Services | Business Studies (BST) Class 11 - Commerce PDF Download

 Page 1


1.1 INTRODUCTION
You must all have, at sometime or the other experienced the effect
of business activities on your lives. Let us examine few examples of
business activity i.e., purchasing ice cream, CD/cassette etc. what is
common in all of them is that one is purchasing an item and other
is experiencing a service. But there is definitely a difference
between the item or good and the service performed. For a
layperson, service are essentially intangibles.
Service are those separately identifiable, essentially
intangible activities that provides satisfaction of wants, and are not
necessarily linked to the sale of a product or another service.
A goods is a physical product capable of being delivered to a
purchaser and involves the transfer of ownership from seller to
customer. Goods are also generally used to refer to commodities or
item of all types, except service involved in trade or commerce.
Page 2


1.1 INTRODUCTION
You must all have, at sometime or the other experienced the effect
of business activities on your lives. Let us examine few examples of
business activity i.e., purchasing ice cream, CD/cassette etc. what is
common in all of them is that one is purchasing an item and other
is experiencing a service. But there is definitely a difference
between the item or good and the service performed. For a
layperson, service are essentially intangibles.
Service are those separately identifiable, essentially
intangible activities that provides satisfaction of wants, and are not
necessarily linked to the sale of a product or another service.
A goods is a physical product capable of being delivered to a
purchaser and involves the transfer of ownership from seller to
customer. Goods are also generally used to refer to commodities or
item of all types, except service involved in trade or commerce.
1.2 NATURE OF SERVICES
There are five basic features of services. These features also
distinguish them from goods are known as the five Is of services.
The are discussed as below:
i. Intangibility: Services are intangible, i.e., they cannot be touched.
They are experiential in nature. One cannot touch entertainment or
a doct or ’ s treatment.
ii. Inconsistency: The second important characteristic of services is
inconsistency. Since there is no standard tangible product, service
have to be performed exclusively each time.
iii. Inseparability: Another important characteristic of services is
the simultaneous activity of production and consumption being
performed. This makes the production and consumption of service
seem to be inseparable.
Page 3


1.1 INTRODUCTION
You must all have, at sometime or the other experienced the effect
of business activities on your lives. Let us examine few examples of
business activity i.e., purchasing ice cream, CD/cassette etc. what is
common in all of them is that one is purchasing an item and other
is experiencing a service. But there is definitely a difference
between the item or good and the service performed. For a
layperson, service are essentially intangibles.
Service are those separately identifiable, essentially
intangible activities that provides satisfaction of wants, and are not
necessarily linked to the sale of a product or another service.
A goods is a physical product capable of being delivered to a
purchaser and involves the transfer of ownership from seller to
customer. Goods are also generally used to refer to commodities or
item of all types, except service involved in trade or commerce.
1.2 NATURE OF SERVICES
There are five basic features of services. These features also
distinguish them from goods are known as the five Is of services.
The are discussed as below:
i. Intangibility: Services are intangible, i.e., they cannot be touched.
They are experiential in nature. One cannot touch entertainment or
a doct or ’ s treatment.
ii. Inconsistency: The second important characteristic of services is
inconsistency. Since there is no standard tangible product, service
have to be performed exclusively each time.
iii. Inseparability: Another important characteristic of services is
the simultaneous activity of production and consumption being
performed. This makes the production and consumption of service
seem to be inseparable.
iv. Inventory: Services have little or no tangible components and,
therefore, cannot be stored for a future use. That is, services are
perishable and providers can, at best, store some associate goods
but not the service itself. This means that the demand and supply
needs to be managed as the service has to be performed as and
when the customer asks for it.
v. Involvement: One of most important characteristics of services is
the participation of the customer in the service delivery process. A
customer has the opportunity to get the services modified
according to specific requirements.
Page 4


1.1 INTRODUCTION
You must all have, at sometime or the other experienced the effect
of business activities on your lives. Let us examine few examples of
business activity i.e., purchasing ice cream, CD/cassette etc. what is
common in all of them is that one is purchasing an item and other
is experiencing a service. But there is definitely a difference
between the item or good and the service performed. For a
layperson, service are essentially intangibles.
Service are those separately identifiable, essentially
intangible activities that provides satisfaction of wants, and are not
necessarily linked to the sale of a product or another service.
A goods is a physical product capable of being delivered to a
purchaser and involves the transfer of ownership from seller to
customer. Goods are also generally used to refer to commodities or
item of all types, except service involved in trade or commerce.
1.2 NATURE OF SERVICES
There are five basic features of services. These features also
distinguish them from goods are known as the five Is of services.
The are discussed as below:
i. Intangibility: Services are intangible, i.e., they cannot be touched.
They are experiential in nature. One cannot touch entertainment or
a doct or ’ s treatment.
ii. Inconsistency: The second important characteristic of services is
inconsistency. Since there is no standard tangible product, service
have to be performed exclusively each time.
iii. Inseparability: Another important characteristic of services is
the simultaneous activity of production and consumption being
performed. This makes the production and consumption of service
seem to be inseparable.
iv. Inventory: Services have little or no tangible components and,
therefore, cannot be stored for a future use. That is, services are
perishable and providers can, at best, store some associate goods
but not the service itself. This means that the demand and supply
needs to be managed as the service has to be performed as and
when the customer asks for it.
v. Involvement: One of most important characteristics of services is
the participation of the customer in the service delivery process. A
customer has the opportunity to get the services modified
according to specific requirements.
1.2.1 Difference between Services and Goods
Form the above, it is clear that the two main differentiating
characteristics of services and goods are non-transferability of
ownership and presence of both provider as well as consumer.
While goods are produced, services are performed. A service is an
act which cannot be taken home. What we can take home is the
effect of the services. And as the services are sold at the
consumption point, there are no inventories. On the basis of above
features, we can have following points of distinction between
goods and service.
Page 5


1.1 INTRODUCTION
You must all have, at sometime or the other experienced the effect
of business activities on your lives. Let us examine few examples of
business activity i.e., purchasing ice cream, CD/cassette etc. what is
common in all of them is that one is purchasing an item and other
is experiencing a service. But there is definitely a difference
between the item or good and the service performed. For a
layperson, service are essentially intangibles.
Service are those separately identifiable, essentially
intangible activities that provides satisfaction of wants, and are not
necessarily linked to the sale of a product or another service.
A goods is a physical product capable of being delivered to a
purchaser and involves the transfer of ownership from seller to
customer. Goods are also generally used to refer to commodities or
item of all types, except service involved in trade or commerce.
1.2 NATURE OF SERVICES
There are five basic features of services. These features also
distinguish them from goods are known as the five Is of services.
The are discussed as below:
i. Intangibility: Services are intangible, i.e., they cannot be touched.
They are experiential in nature. One cannot touch entertainment or
a doct or ’ s treatment.
ii. Inconsistency: The second important characteristic of services is
inconsistency. Since there is no standard tangible product, service
have to be performed exclusively each time.
iii. Inseparability: Another important characteristic of services is
the simultaneous activity of production and consumption being
performed. This makes the production and consumption of service
seem to be inseparable.
iv. Inventory: Services have little or no tangible components and,
therefore, cannot be stored for a future use. That is, services are
perishable and providers can, at best, store some associate goods
but not the service itself. This means that the demand and supply
needs to be managed as the service has to be performed as and
when the customer asks for it.
v. Involvement: One of most important characteristics of services is
the participation of the customer in the service delivery process. A
customer has the opportunity to get the services modified
according to specific requirements.
1.2.1 Difference between Services and Goods
Form the above, it is clear that the two main differentiating
characteristics of services and goods are non-transferability of
ownership and presence of both provider as well as consumer.
While goods are produced, services are performed. A service is an
act which cannot be taken home. What we can take home is the
effect of the services. And as the services are sold at the
consumption point, there are no inventories. On the basis of above
features, we can have following points of distinction between
goods and service.
1.3 TYPES OF SERVICES
When speaking of service sector, services can be classified into
three broad categories, viz., business services, social services and
personal services. Three have been explained in the following
pages.
i. Business services: Business services are those services which are
used by business enterprise for conduct of their activities.
ii. Social services: Social services are those services that are
generally provided voluntarily in pursuit of certain social goals.
iii. Personal services: Personal services are those services which are
experienced differently by different customers. These services
cannot be consistent in nature.