Understanding Goods and Services

Goods

• Goods are tangible items supplied to a buyer, transferring ownership from seller to buyer.

Services

• Services are intangible actions satisfying demands, not always tied to products or services. Examples include banking and telecommunication.

Features of Services

• Intangibility: Services cannot be touched; they are experiential. Quality often cannot be evaluated before consumption. Service providers strive to create a positive experience for the consumer.
• Inconsistency: Services are not like typical tangible products; they are performed uniquely each time. Customers have diverse needs and expectations.
• Inseparability: Production and consumption are simultaneous; services must be used in the order they're created. Service providers use technology for substitutes.
• Inventory: Services cannot be stored for later use; they are perishable. Demand and supply need regulation.
• Involvement: A service's characteristic is the customer's involvement in the delivery process. Customers can have services customized.

Types of Services

• Business services: Services utilized by businesses for operations, including banking, insurance, transportation, warehousing, and communication.
• Social services: Services supplied to meet social goals, often freely, improving living standards, health, education for the poorest. Examples include certain NGOs and government initiatives.
• Personal services: Services varying in how they are received by different clients, such as services differing based on their style and nature

Banking

• Banking companies lend and invest public money, with deposits repayable based on demand.

Types of Banks

• Commercial banks: Governed by Indian Banking Regulation Act 1949, take deposits from the public, and lend money.
• Cooperative banks: Governed by state cooperative societies act, and offer services which include accepting deposits, lending money and development of the bank.
• Specialized Banks: The banks provide specialized services, such as exchange banks, development banks, industrial banks and export import banks.
• Central Bank: The central bank of a country, oversees other banks, regulates, and controls all the activities.

Functions of Commercial Banks

• Acceptance of deposits: Banks take deposits through current, saving and fixed accounts.
• Cheque facility: Cheques are a method of funds exchange.
• Lending of funds: Banks provide loans and advances based on deposited funds.
• Remittances of funds: Funds are transferred between branches, through drafts, or by other means.
• Allied services: These encompass bill payments, locker facilities, and services for securities or other transactions

E-Banking

• Online banking facilitates digital payments and enhances financial transparency.

Insurance

• Insurance is a contract where one party (insured) pays another (insurer) a premium for risk protection.

Types of Insurance

• Life insurance: Covers risks associated with life events.
• General insurance: Covers wider risks (marine, fire, health, burglary).

Features of Insurance

• Indemnity: Insurance should compensate for losses.
• Utmost good faith: Honesty and full disclosure are required.
• Insurable interest: The insured party must have an interest in what's insured.
• Mitigation of loss: Insured party must take reasonable steps to avoid further loss.
• Proximate cause: The event immediately leading to the loss must be the cause insured against.
• Contribution: If multiple policies are held, the insured will receive a proportionate settlement.
• Certainty: Reduces risks by providing predictable payouts.
• Protection: Protects against foreseeable risks like theft or fire.
• Risk Sharing: Insurers spread the risk among many policyholders.
• Capital Formation: Premium accumulation funds are available for investment.

Principles of Insurance

• Utmost good faith: Complete disclosure from both parties.
• Insurable interest: The insured person should have financial stake and concern.
• Indemnity: Compensation limited to the amount of loss incurred.
• Proximate cause: The event resulting in loss is solely insured against.
• Mitigation of loss The insured must minimize loss.
• Contribution Reduction if you insured with multiple companies
• Contingency of Risk: The uncertainty (or risk of an event)

Warehousing Services

• Warehousing is a service which acts as a storage capacity for products.
• Warehouses consolidate, break bulk (smaller lots from larger quantities), stock stockpile, and allow value-added services.

Types of Warehouses

• Cooperative warehouses: Operated by cooperative societies.
• Government warehouses: Operated by government organizations.
• Bonded warehouses: Storage for imported goods, taxes/duties paid before removal.
• Public warehouses: Available for rent to any member of public. (Storage/warehousing)
• Private warehouses: Companies and individuals that own and run the warehouses, for their own use and products for sale.

Functions of Warehousing

• Consolidation
• Break Bulk
• Stock piling of materials
• Value-added services (example: processing, labeling)
• Price stabilization
• Financing

Telecommunication Services

• Telecommunication ensures efficient and accurate communication, critical in the modern economic environment.
• Types of Telecommunications services include Cellular mobile, cable, fixed line, and VSAT.

Postal Services

• Essential for countrywide communication and the movement of goods.
• Services such as mail provision, registration, savings schemes (financial facilities).

Transportation Services

• Freight, auxiliary and passenger transportation services.
• Transportation enables the movement of goods and people across distances.

This quiz explores the key differences between goods and services, focusing on the distinct features of services such as intangibility, inconsistency, inseparability, and perishability. Test your knowledge on how these characteristics affect customer experience and service delivery.