Service (economics)

A service is an act or use for which a consumer, firm, or government is willing to pay. Examples include work done by barbers, doctors, lawyers, mechanics, banks, insurance companies, and so on. Public services are those that society (nation state, fiscal union or region) as a whole pays for. Using resources, skill, ingenuity, and experience, service providers benefit service consumers. Services may be defined as intangible acts or performances whereby the service provider provides value to the customer. Services have three key characteristics: Services are by definition intangible. They are not manufactured, transported or stocked. One cannot store services for future use. They are produced and consumed simultaneously. Services are perishable in two regards: Service-relevant resources, processes, and systems are assigned for service delivery during a specific period in time. If the service consumer does not request and consume the service during this period, the related resources may go unused. From the perspective of the service provider, this is a lost business opportunity if no other use for those resources is available. Examples: A hairdresser serves another client. An empty seat on an airplane cannot be filled after departure. When the service has been completely rendered to the consumer, this particular service irreversibly vanishes. Example: a passenger has been transported to the destination. The service provider must deliver the service at the exact time of service consumption. The service is not manifested in a physical object that is independent of the provider. The service consumer is also inseparable from service delivery. Examples: The service consumer must sit in the hairdresser's chair, or in the airplane seat. Correspondingly, the hairdresser or the pilot must be in the shop or plane, respectively, to deliver the service. Each service is unique. It can never be exactly repeated as the time, location, circumstances, conditions, current configurations and/or assigned resources are different for the next delivery, even if the same service is requested by the consumer.