Service (economics)

A hotel porter is an example of a service-related occupation.

In economics, a service is a transaction in which no physical goods are transferred from the seller to the buyer. The benefits of such a service are held to be demonstrated by the buyer's willingness to make the exchange. Public services are those that society (nation state, fiscal union, region) as a whole pays for. Using resources, skill, ingenuity, and experience, service providers benefit service consumers. Service is intangible in nature.

Two I's

Services can be described in terms of I's.


Services are by definition intangible. They are not manufactured, transported or stocked.

Services cannot be stored for a 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 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.

Inconsistency (variability)

Each service is unique. It can never be exactly repeated as the time, location, circumstances, conditions, current configurations and/or as signed resources are different for the next delivery, even if the same service consumer requests the same service. Many services are regarded as heterogeneous and are typically modified for each service consumer or each service contextual . Example: The taxi service which transports the service consumer from home to work is different from the taxi service which transports the same service consumer from work to home – another point in time, the other direction, possibly another route, probably another taxi driver and cab. Another and more common term for this is heterogeneity.

Other Languages
Afrikaans: Diens
العربية: خدمة
Bân-lâm-gú: Ho̍k-bū
беларуская: Паслуга
беларуская (тарашкевіца)‎: Паслуга
čeština: Služba
dansk: Tjeneste
eesti: Teenus
Esperanto: Servo
فارسی: خدمات
galego: Servizo
客家語/Hak-kâ-ngî: Fu̍k-vu
한국어: 서비스
Ido: Servado
Bahasa Indonesia: Jasa
íslenska: Þjónusta
italiano: Servizio
ქართული: მომსახურება
لۊری شومالی: خدمات
latviešu: Pakalpojums
Lëtzebuergesch: Service
lietuvių: Paslauga
македонски: Услуги
Bahasa Melayu: Perkhidmatan
မြန်မာဘာသာ: ဝန်ဆောင်မှု
Nederlands: Dienst (economie)
日本語: サービス
norsk: Tjeneste
Patois: Saabis
polski: Usługi
русский: Услуга
саха тыла: Өҥө
Simple English: Service (economics)
slovenčina: Služba
српски / srpski: Услуга
srpskohrvatski / српскохрватски: Usluga
suomi: Palvelu
svenska: Tjänst
татарча/tatarça: Хезмәт
Türkçe: Hizmet
українська: Послуга
Tiếng Việt: Dịch vụ
粵語: 服務
中文: 服务