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Goods are items that are usually (but not always)
tangible Tangibility is the property of being able to be perceived by touch. A commonplace understanding of "tangibility" renders it as an attribute allowing something to be perceptible to the senses. In criminal law, one of the elements of an offense ...
, such as pens, physical books, salt, apples, and hats. Services are activities provided by other people, who include
architects An architect is a person who plans, designs and oversees the construction of buildings. To practice architecture means to provide services in connection with the design of buildings and the space within the site surrounding the buildings that h ...
,
suppliers In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
,
contractors A general contractor, main contractor or prime contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of ...
, technologists,
teachers A teacher, also called a schoolteacher or formally an educator, is a person who helps students to acquire knowledge, competence, or virtue, via the practice of teaching. ''Informally'' the role of teacher may be taken on by anyone (e.g. wh ...
, doctors, lawn care workers,
dentists A dentist, also known as a dental surgeon, is a health care professional who specializes in dentistry (the diagnosis, prevention, management, and treatment of diseases and conditions of the oral cavity and other aspects of the craniofacial comp ...
,
barbers A barber is a person whose occupation is mainly to cut, dress, groom, style and shave men's and boys' hair or beards. A barber's place of work is known as a "barbershop" or a "barber's". Barbershops are also places of social interaction and publi ...
,
waiters Waiting staff (British English), waitstaff (North American English), waiters (male) / waitresses (female), or servers (North American English), are those who work at a restaurant, a diner, or a bar and sometimes in private homes, attending ...
, online servers, a digital book, a digital
video game Video games, also known as computer games, are electronic games that involves interaction with a user interface or input device such as a joystick, controller, keyboard, or motion sensing device to generate visual feedback. This fee ...
or a digital
movie A film also called a movie, motion picture, moving picture, picture, photoplay or (slang) flick is a work of visual art that simulates experiences and otherwise communicates ideas, stories, perceptions, feelings, beauty, or atmosphere ...
. Taken together, it is the
production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...
, distribution, and
consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...
of
goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not t ...
and
services Service may refer to: Activities * Administrative service, a required part of the workload of university faculty * Civil service, the body of employees of a government * Community service, volunteer service for the benefit of a community or a p ...
which underpins all
economic activity Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes w ...
and
trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct excha ...
. According to
economic theory Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
, consumption of goods and services is assumed to provide
utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...
(satisfaction) to the
consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...
or end-user, although businesses also consume goods and services in the course of producing other goods and services (see: Distribution: Channels and intermediaries).


History

Physiocratic economists categorized production into productive labour and unproductive labour. Adam Smith expanded this thought by arguing that any economic activities directly related to material products (goods) were productive, and those activities which involved non-material production (services) were unproductive. This emphasis on material production was adapted by
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British political economist. He was one of the most influential of the classical economists along with Thomas Malthus, Adam Smith and James Mill. Ricardo was also a politician, and a ...
,
Thomas Robert Malthus Thomas Robert Malthus (; 13/14 February 1766 – 29 December 1834) was an English cleric, scholar and influential economist in the fields of political economy and demography. In his 1798 book '' An Essay on the Principle of Population'', Ma ...
and John Stuart Mill, and influenced later Marxian economics. Other, mainly Italian, 18th-century economists maintained that all desired goods and services were productive.


Service-goods continuum

The division of
consumables Consumables (also known as consumable goods, non-durable goods, or soft goods) are goods that are intended to be consumed. People have, for example, always consumed food and water. Consumables are in contrast to durable goods. Disposable products ...
into services is a simplification: these are not discrete categories. Most
business theorist Organizational theory refers to the set of interrelated concepts that involve the sociological study of the structures and operations of formal social organizations. Organizational theory also attempts to explain how interrelated units of organiz ...
s see a continuum with pure service at one endpoint and pure tangible commodity goods at the other. Most
products Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produ ...
fall between these two extremes. For example, a restaurant provides a physical good ( prepared food), but also provides services in the form of ambience, the setting and clearing of the table, etc. Although some utilities, such as
electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as describ ...
and communications service providers, exclusively provide services, other utilities deliver physical goods, such as
water utilities The water industry provides drinking water and wastewater services (including sewage treatment) to residential, commercial, and industrial sectors of the economy. Typically public utilities operate water supply networks. The water industry does ...
. For public sector contracting purposes, the
electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as describ ...
supply is defined among goods rather than services in the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
, whereas under United States federal procurement regulations, it is treated as a service. Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service, once delivered cannot. Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.
Marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
theory makes use of the service-goods continuum as an important concept which 'enables marketers to see the relative goods/services composition of total products. In a narrower sense, service refers to
quality Quality may refer to: Concepts *Quality (business), the ''non-inferiority'' or ''superiority'' of something *Quality (philosophy), an attribute or a property *Quality (physics), in response theory * Energy quality, used in various science discipl ...
of
customer service Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...
: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing.


In international law

Distinctions are made between goods and services in the context of international trade liberalization. For example, the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...
's General Agreement on Tariffs and Trade (GATT) covers international trade in goods and the
General Agreement on Trade in Services The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) which entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading sy ...
(GATS) covers the
services sector The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model (also known as the economic cycle). The others are the primary sector (raw materials) and the second ...
.WTO
Services trade
accessed 17 November 2015


See also

*
Commodity (Marxism) In classical political economy and especially Karl Marx's critique of political economy, a commodity is any good or service ("products" or "activities") produced by human labour and offered as a product for general sale on the market. Some other p ...
* Fast-moving consumer goods * Goods and services tax *
List of countries by GDP sector composition This is a list of countries by gross domestic product (GDP) sector composition. By economic sector Nominal GDP sector composition Nominal GDP sector composition, 2015 (in percentage and in millions of dollars): Real GDP sector composition GD ...
*
Tertiary sector of the economy The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model (also known as the economic cycle). The others are the primary sector ( raw materials) and the seco ...
*
Three-sector model The three-sector model in economics divides economies into three sectors of activity: extraction of raw materials ( primary), manufacturing ( secondary), and service industries which exist to facilitate the transport, distribution and sa ...


References


Further reading

* 274 pages. * 64 pages. *Smith, Adam.
The Wealth of Nations
' at
Project Gutenberg Project Gutenberg (PG) is a volunteer effort to digitize and archive cultural works, as well as to "encourage the creation and distribution of eBooks." It was founded in 1971 by American writer Michael S. Hart and is the oldest digital libr ...


External links


International Classification of Goods and Services
at
World Intellectual Property Organization The World Intellectual Property Organization (WIPO; french: link=no, Organisation mondiale de la propriété intellectuelle (OMPI)) is one of the 15 specialized agencies of the United Nations (UN). Pursuant to the 1967 Convention Establishi ...

Electronic Code of Federal Regulations
at Code of Federal Regulations
Nice Agreement Tenth Edition – General Remarks, Class Headings and Explanatory Notes – Version 2012
{{Authority control Goods (economics) Services (economics)