Transcription
In this lecture, we're going to talk about the difference between goods and services. Now, when we're talking about the four Ps or the marketing mix, uh what we usually refer to as the first of the four Ps is what we call the product. And the product usually encompasses a number of different things. But when defining the term, we associate a product with anything that a company offers that satisfies a consumer want or a consumer need. And so by anything, we typically refer to a couple of different categories. We usually refer to them as goods and we also refer to services. And goods and services share some characteristics but they do differ in certain areas which is very very important. Uh so what we'll do is we'll describe services and ultimately we'll see how they differ from actual goods.
Uh now goods typically are what we call physical actual products. And so they have some type of shape. They have form. You can hold them. They have weight. They have a certain smell. And so those things allow us to gauge maybe the quality or the extent to which we'll find that we uh tend to side with a particular product. You know, when you purchase a good in a an electronic store or you look at a piece of clothing in a retail shop, you know, you have the ability to try it on. You can test it. Uh you can see how it feels and all these other things. And that gets you certain benefits over services because services we don't have that same ability.
So what are some of the things that differentiate goods from services? Well, one of the first things is what we call intangibility. And intangibility refers to the fact that services lack certain physical characteristics. And it makes it very difficult to assess them because with in comparison to goods they have a physical characteristic where you can assess ultimately how the product will perform. With services you don't have that same ability. They are intangible. You cannot hold them. They do not have any type of weight which makes it very difficult to assess those services. And so you look at ultimately how do we gather information related to the quality of certain services? Usually, it's by word of mouth, which makes it all that much more important for businesses to produce quality services because the only way that people have any understanding or any knowledge of their performance is typically through third parties. So, you may ask friends how certain services are, how was their experience because ultimately you cannot try them yourself without actually engaging in the purchase process.
Uh the next thing that differentiates good from services is this idea of inseparability. And what is meant by inseparability is you typically have to be present or take part in the delivery of the service. And so if you were to want to get your haircut, you know, you have to take part in the delivery of the service, right? The the the haircut cannot be performed if you are separate from that particular process. And because we take part in the process of the delivery of the service, we have the ability to affect ultimately the outcome of that service for better or for worse. So keeping with the example of obtaining a haircut. Obviously, if we move in certain ways that maybe we're not supposed to, then that can ultimately affect the outcome of the haircut. We may have a haircut that doesn't look as good as it could have because we weren't staying still during the actual process. But this has to do with a number of different things, right? If you go to a restaurant and the service you're provided by the weight staff may differ depending upon your demeanor and your attitude. And so the the waiter or waitress may differ their service to you depending upon how you treat them. And so because we take part in the delivery of the service, we have the ability to affect the outcome to a certain degree.
Uh the next thing that differentiates goods and services has to do with variability. And when we purchase a particular product, usually they're they're mass- prodduced, meaning that many of them were produced at one time. They have the exact same characteristics. They're produced to the exact same specifications. And it's very rare to get a product that doesn't perform like the others, right? to get products that are faulty or they default at a certain point in time and they don't work to their factory settings, if you will. With services though, there's a great deal of variability. The service that we receive is largely dependent upon the person that's actually providing it. And so, if you were to, let's say, get your haircut and the person that was cutting your hair was not very experienced, that could affect the outcome or the quality of that actual service. Same thing if you were to go to a restaurant and it's busy and there's just a lot of people and they're short staffed. That will affect the outcome of your service because it's dependent upon the actual person. And so with services, it's very very important that you have people that are very customer serviceoriented, that are very competent in the positions in terms of the jobs, skills, and abilities required of those jobs, and they're familiar with what their tasks are. because if they're not, then that can ultimately affect the outcome of the service that's performed.
And the very last characteristic of a service that differentiates it from goods is what we call perishability. And by perishability, what we mean is that the items are perishable related to services. And what that means is that a service is consumed at the time that it is actually purchased. Uh contrary to goods where you can acquire them and you can store them for use later, services typically have to be both purchased and consumed at the same point in time. You don't have the ability to save a haircut for later. you don't have the ability to save a uh let's say oil change for later because those products are both or those services are provided but they're both consumed at the same point in time there and so that represents obviously certain advantages and disadvantages of course but they differ a little bit from goods.
Now one thing I should point out is that you can have what we call uh mixed products if you will uh in which they possess characteristics of both goods and services. Now, one of the examples I gave you before was that of a restaurant. And restaurants provide both goods and services, right? Because you get an actual meal of some kind, which represents a a tangible good. And you also get though the service which is provided by the weight staff in terms of how often they check for refilling your water or drinks and how often they check with you to see if the food is good and and different things of that nature. And so there's there are components to both. And so rarely do we have something that is a pure service or a pure good. Usually they share characteristics of both. Uh even some things like software for example uh software is an actual good but it's intangible. And so goods can share some characteristics with services. Now because software obviously especially if you purchase it online you don't take any there's nothing tangible but it is an actual good because you use it uh repeatedly and it doesn't have to be purchased or used at the same point in time and so it shares some characteristics of both which is very helpful.
But businesses and marketers need to be aware of the differences of course because obviously they have to tailor the marketing efforts depending upon if something is a good or a service. And so just for example with services because consumers have to take part in the delivery of it. Usually businesses that provide services usually have somewhat of good locations. Usually they have very clean environments. Uh whereas a company that provides maybe goods. If you're producing something like manufacturing, you do want a clean workplace, but you don't necessarily need it to be uh obviously above the over the top and have, you know, a lounge area and televisions and different things because consumers don't go there. But if you're providing services, then you typically will have a waiting area, a lounge area, maybe a television, maybe some magazines. You know, you want to make the environment uh somewhat uh of a somewhat accommodating and and instill an environment to which people actually want to stay because ultimately they have to take part in the delivery of the actual service.