EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 1, Problem 1DQ
Summary Introduction
Interpretation: Differences between goods and services in an airline service.
Concept Introduction: Goods are tangible, that is, it can be touched and felt. Services are intangible in nature; it cannot be touched only felt. Goods have physical appearance while services do not have.
Expert Solution & Answer
Explanation of Solution
Following are the seven differences between goods and services in light of an airline industry.
- Goods are tangible while services are intangible: In case of an air travel, the service provided is the delivery of the passenger from one place to the other. While this may have immense value, it cannot be touched or consumed. Hence, airline travel is a service delivered by the companies.
- Goods do not require physical participation of people while services require it. Customer participation is necessary in case of service. For the airline service to be delivered, the customer must be present and ready to fly. Otherwise, the service cannot be possible. On the other hand, for goods to be delivered, the same does not apply because even if the customers are physically not present, goods can be pushed to them using various channels.
- Demand for goods is predictable while for services, it is unpredictable. For goods demand can be predictable, the demand for the services are difficult to predict. For airline travel, the demand is generally time dependent especially for a short period. So, they are difficult to
forecast accurately. - Storage of goods can be done while for services, it is not possible. Services cannot be stored as an inventory similar to a good. The airline service can either be delivered at the time of customer requirement or demand or it will be failed to deliver. Here there is no scope of storing and using later.
- Expertise and skills are required for service execution while for delivery of goods, it is not essential.
Service management skills are essential for successful service encounter. For example, in airline service, the efficiency of the counter server, skill of the pilot, or the courtesy and help of the cabin crew becomes essential for successful service delivery. - Copyrights or patents can be applied to goods production while for services, it cannot be applied. Patent do not protect services. For airline industry, the service must be delivered openly in front of all other competitors in the premises of the airport. So, it is hardly possible to protect any intellectual property.
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