Question

Explain how the seven differences between goods and services would be applied to a major airline service. Provide airline examples that illustrate each difference.

Answer 1

Answer:

The seven differences between goods and services are:

1. intangibility: goods are tangible products, e.g. you can touch them and hold them, while services are intangible, you can use them (e.g. you fly on a plane) and even measure how much they satisfy your needs, but you cannot touch flying, it is an action.
2. ownership: you can buy a good, e.g. if you are rich enough you can buy an airplane, but when you purchase a plane ticket you are entitled to using a certain service, you are assigned a seat and you fly inside the airplane, but you do not own anything besides your personal belongings.  
3. involvement of consumers: consumers are not an active part in the production process of a good, while consumers are an essential part in the process of producing a service, e.g. you buy a ticket and you fly in the plane, no one else can fly for you.
4. quality: mass produced goods tend to have a similar quality while the quality of services can vary a lot, e.g. your plane might be late, or you can get sick while flying, or you might enjoy your flight.
5. customer evaluation: when you purchase a good, you can easily decide if the good satisfies your need completely or not, while a flight can be on time (good service) but there might have been a lot of turbulence (bad service).
6. inventories are absent: goods can be stocked, services cannot. There are usually empty seats during a flight, but a seat not taken today cannot be added to the total number of seats available tomorrow.
7. importance of time: if you purchase a good, it doesn't matter if you decide to use that good immediately or not, while a service is produced and consumed at the same time, e.g. the airline company is providing the flight service during the time that you are actually flying.