Business Services | Class 11 Business Studies

Services are all those economic activities that are intangible and imply an interaction to be realised between the service provider and the consumer.

Features of Services:

1. Intangibility: Services are intangible, i.e., they cannot be touched.They are experiential in nature. One cannot taste a doctor’s treatment, or touch entertainment. One can only experience it. For example, treatment by a doctor can't be touched but only experienced. 

2. Inconsistency:  Since there is no standard tangible product, services have to be performed exclusively each time. Different customers have different demands and expectations. Service providers need to have an opportunity to alter their offer to closely meet the requirements of the customers. This is happening, for example, in the case of mobile services.

3. Inseparability: Another important characteristic of services is the simultaneous activity of production and consumption being performed.This makes the production and consumption of services seem to be inseparable. While we can manufacture a car today and sell it after, say, amonth; this is often not possible with services that have to be consumed as and when they are produced.  

4. Inventory (Less): Services have little or no tangible components and,therefore, cannot be stored for a future use. For example,a railway ticket can be stored but the railway journey will be experienced only when the railways provides it.

5. Involvement: One of the most important characteristics of services is the participation of the customer in the service delivery process. A customer has the opportunity to get the services modified according to specific requirements.

Types of Services:

1. Business Services: Business services are those services which are used by business enterprises for the conduct of their activities. For example, banking, insurance,transportation, warehousing  and communication services.

2. Social Services: Social services are those services that are generally provided voluntarily in pursuit of certain social goals. These social goals may be to improve the standard of living for weaker sections of society, to provide educational services to their children, or to provide health care and hygienic conditions in slum areas.These services are usually provided voluntarily but for some consideration to cover their costs. For example,health care and education services provided by certain Non-government organisations (NGOs) and government agencies.

3. Personal Services: Personal services are those services which are experienced differently by different customers. These services cannot be consistent in nature. They will differ depending upon the service provider.They will also depend upon customer’s preferences and demands. For example, tourism, recreational services, restaurants.

Business Services:

1. Banking - click here for notes on Banking

2. Insurance - click here for notes on Insurance

3. Postal Services- click here for notes