Goods vs Services Comparison

Study Notes

Goods can be resold, while reselling services is uncommon.
Goods can be inventoried; services cannot be stored.
Some quality aspects of goods are measurable; many service quality aspects are subjective.
Selling goods is distinct from production, whereas selling services is often part of service production.
Goods are transportable, while it is the service provider, not the service itself, that can be moved.
Production of goods can often be automated, but service production is typically harder to automate.
Goods are tangible, in contrast to services, which are intangible.
Customer interaction is usually lower for goods and higher for services.

Manufacturing is focused on tangible outputs; service organizations emphasize act-oriented outputs.
Customer contact is generally low in manufacturing and high in service.
Uniformity of output is high in manufacturing, while it tends to be lower in services.
Labor content per unit is low in manufacturing but high in services.
Measuring productivity is easier in manufacturing compared to services.
Quality control and correction of problems are simpler in manufacturing.

Both sectors utilize technology.
They confront issues related to quality, productivity, and customer response.
Demand forecasting is necessary in both fields.
Capacity, layout, and location are common concerns.
Both sectors involve customer and supplier interactions, as well as scheduling and staffing.

Organizations fall along a continuum from product-based (like automobile manufacturers) to service-based (like consultancies).
Hybrid organizations exhibit characteristics of both manufacturing and service (e.g., fast-food chains).

Operations encompass the processes that create goods and services, transforming inputs into outputs.
Operations management oversees planning, coordination, and control of resources for production.
It is crucial for both manufacturing and service organizations.

Effective feedback mechanisms can improve output quality.
Outputs could include sales increases, reduced complaints, and customer satisfaction metrics.

Service organizations (e.g., MBA institutes) focus on transforming student inputs into valuable attributes like leadership and analytical skills.
Hybrid organizations (e.g., restaurants) must manage both service quality and food product quality, thriving on customer satisfaction to stay competitive.

Competitive advantage comes from delivering greater value than competitors.
Competitive priorities include cost, quality, time, and flexibility.
Distinctive competencies differentiate a business, providing undeniable market access or increased customer value.

Order qualifiers are essential characteristics that allow a product/service to be considered by customers.
Order winners are key attributes that secure customer purchases, requiring companies to exceed competitors in these areas for success.