Services – The Service Industry

Services are generally defined as intangible products that are not goods or merchandise, such as accounting, financial, janitorial, and transportation as examples.  There are occasions when services are not easily identifiable due in part that they closely related to a particular tangible product or merchandise.  An example would be the combination of a physician’s diagnosis and then the prescription that they recommend in the process.  With a service or services, there is no apparent ownership or possession that takes place as in the exchanging of a product for monetary compensation.

There are three hard and fast rules regarding services:

1. they cannot be stored or transported
2. they cannot come into existence at the point of sale and/or consumption
3. they are instantly perishable

The Service Industry, also referred to as the service sector, is known as the tertiary sector of industry and occupies one of four positions within the industrial sector of developed economies as follows:

• Primary – agriculture, fishing, and mining
• Secondary – manufacturing
• Tertiary – services
• Quaternary – sharing of information

The tertiary sector involves providing services to final consumers (end users) as well as businesses.  Services may be distributed and transported as well as being retailed or wholesaled to either business or consumer entities.