Services are intangible activities or benefits provided by one party to another, often occurring through applying skills and knowledge. Services are different from products, which are tangible items that satisfy human wants or needs.
One key distinction between services and products is their intangibility. Services cannot be seen, tasted, felt, heard, or smelled before they are purchased. In contrast, products are tangible and can be experienced with the senses before purchase.
Another difference lies in the production and consumption process. Services are typically produced and consumed simultaneously, making them inseparable. On the other hand, products are usually manufactured, distributed, and consumed later.
A third distinction is in variability. Services depend highly on who provides them, the time, and the location, leading to more significant variability than products.
The last difference is perishability, which refers to a service's characteristic: it cannot be stored, saved, returned, or resold once used. Unlike physical goods, services are produced and consumed simultaneously, meaning they cease to exist once they have been consumed.
For example, an empty seat in an airplane represents lost revenue that cannot be recovered — the service has 'perished' as it cannot be stored for future use.
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