Business services are referred to as the activities that assist business yet does not deliver a tangible commodity. For instance, Information technology is one such business service that supports various other business services such as shipping, procurement and finance. Most of the businesses today are inclined towards such specialized business services.
India is growing extremely competitive and giving a tough competition to other countries when it comes to providing services. A large number of foreign country prefer India as their hosting partner for business services, sometimes they even prefer to open a branch office.
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Characteristics of Business Services
Business services divided into five characteristics are mentioned below.
(1) Intangibility
- These are intangible assets, they cannot be touched.
- They don’t have their physical presence.
- A person can only experience it.
- It is important to provide quality service to the customer, so that customer can feel the favourable experience.
- Example: Teaching by teachers, doctor’s treatment to patients etc.
(2) Inconsistency
- There is no consistency in the services as like in physical products.
- Each time the service has to be performed exclusively.
- Demands and expectations of the different customers are different.
- Every time the service provider has to modify the service accordingly.
(3) Inseparability
- Production and consumption are simultaneous in case of services.
- If we produce the goods today, it can be sold later.
(4) Inventory
- Services cannot be stored for the future.
- It has no physical component.
- Demand and supply for the service are very close to each other.
- Service has to be provided to the customer as and when it is asked by them.
- Example:Â Mc Donald’s burger can be stored but the taste can only be experienced.Airways ticket can be stored, the journey can be experienced.
(5) Involvement
- Services are provided according to the requirement of customers.
- It has the involvement of customers in the service providing process.
What are the Types of Services?
Following Are the Types of Services:
(1) Business Services
- Services used by the business enterprises in conducting the activities of the business.
- Example:Â Banking, insurance, warehousing, communication services etc.
(2) Social Services
- These are provided voluntarily to fulfil social goals.
- Example:Â Providing education and health facilities to the employees and their family members.
(3) Personal Services
- These are not consistent in nature.
- Different consumers have different services.
- They depend upon the customer’s priority.
- Example:Â Tourism, restaurant etc.
Differences Between Goods and Services
| Basis | Goods | Services |
| (1) Existence | Physical existence | No physical existence |
| (2) Inseparability | Production and consumption can be separated.
E.g. Purchasing vegetables to store. |
Production and consumption cannot be separated.
E.g. Having food in the restaurant. |
| (3) Inconsistency | Different customers getting standardized demand fulfilled. | Different customers having different demands. |
| (4) Type | Homogeneous | Heterogeneous |
| (5) Inventory | Can be kept in stock | Cannot be kept in stock |
Solved Questions:
Q.1 What is an Intangible Product?
Answer:
- These are intangible assets, they cannot be touched.
- They don’t have their physical presence.
- A person can only experience it. Example: Teaching by teachers, the doctor with patients etc.
Q.2 Give 3 Examples of Services?
Answer:
Banking, insurance, transportation.
Q.3 Name the Services Which Are Undertaken by the Organisation to Encourage Social Welfare?
Answer:
Social services.
Q.4 Name the Services Which Are Undertaken by the Organisation to Fulfill the Objectives of the Organisation?
Answer:
Business activities.
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