Goods and services
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In economics, goods and services are the outcome of human efforts to meet the wants and needs of people. Economic output is divided into physical goods and intangible services. Goods are items that can be seen and touched, such as books, pens, salt, shoes, hats, and folders. Services are provided by other people, such as doctors, lawn care workers, dentists, barbers and waiters. Consumption of goods and services is assumed to provide utility (satisfaction) to the consumer.
The service-goods continuum
The division of consumables into physical goods and intangible services is an oversimplification: these are not discrete categories. Most business theorists see a continuum with pure service at one endpoint and pure commodity goods at the other endpoint. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambiance, the setting and clearing of the table, etc. And although some utilities, such as electricity providers, exclusively provide services, other utilities actually deliver physical goods, such as water utilities. For public sector contracting purposes in the European Union, electricity supply is actually defined as goods rather than services.
Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service once delivered cannot. Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.
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Goods and services
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- UK Legislation, Public Contracts Regulations 2006, Regulation 2(1) s.v. "goods", http://www.legislation.gov.uk/uksi/2006/5/pdfs/uksi_20060005_en.pdf accessed 25 June 2015
- Indiaclass, 'Goods Service Continuum' http://www.indiaclass.com/goods-service-continuum/ accessed 25 June 2015
- Bachelors of Management Students Portal (BMS.co.in), 'Explain the Goods-Service Continuum', http://www.bms.co.in/explain-the-goods-service-continuum/ accessed 25 June 2015
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