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Service-Goods continuum

In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax.

We satisfy our needs and wants by buying goods and services. Goods are items you can see and touch, such as a book, a pen,salt,shoes,hats, a folder etc. Services are provided for you by other people, such as; doctor,a lawn mower worker,a dentist, haircut and eating in restaurants.

The service-goods continuum

The dichotomy between physical goods and intangible services should not be given too much credence. These are not discrete categories. Most business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point. 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 actually deliver physical goods & services; like water utilities which actually deliver water — utilities are usually treated as services.

In business, people sometimes talk about the marketing of products and services. This is clearly tautological - services are products. Marketers must draw on the same set of principles and skills to market all products, whether they are apples, oranges or haircuts. Like economists, marketers too view goods and services as two ends of a continuum.

See also



In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax.

We satisfy our needs and wants by buying goods and services. Goods are items you can see and touch, such as a book, a pen, salt, shoes, hats, a folder etc. Services are provided for you by other people, such as; a doctor, a lawn mower worker, a dentist, haircut and eating in restaurants.

The service-goods continuum

The dichotomy between physical goods and intangible services should not be given too much credence; these are not discrete categories. Most business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point. 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 actually deliver physical goods & services; like water utilities which actually deliver water — utilities are usually treated as services.

In business, people sometimes talk about the marketing of products and services. This is clearly tautological - services are products. Marketers must draw on the same set of principles and skills to market all products, whether they are apples, oranges or haircuts. Like economists, marketers too view goods and services as two ends of a continuum.

See also








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