SummaryNature of Services: Services are those separately recognizable, essentially imperceptible activities that give satisfaction of wants, and are not necessarily connected with the sale of a product or another service. Services have 5 basic features which distinguish them from goods and are called as the five Is of services i.e., Intangibility, Inconsistency, Inseparability, Inventory (less), Involvement.
Difference between Services and Goods: Services are performed as and when the good are produced and is an act that cannot be taken home. Only the effect of the service can be taken home.
Types of Services: The three types are Business, Social and Personal Services.
Business Services: There is tough competition in the world today and the survival of the fittest has become the rule. Nonperformance is unacceptable, and hence companies have a tendency to stick to what they can do best. To be competitive, business organizations, have become more and more dependant on expert business organizations
Banking: Banks are significant organization of the economy and provide institutional credit to its customers. A banking company in India is the one which transacts the business of banking which means agreeing, for the aim of lending and investment of deposits of capital from the public, repayable on request or otherwise and withdrawable by cheques, draft, order or otherwise.
Type of Banks: It also deals in financial instruments by providing financial services for a cost i.e., interest, discount, commission, etc. Banks are classified as given below:
- Commercial banks
- Cooperative banks
- Specialized banks
- Central bank.
e-Banking: The expansion of the Internet and e-commerce is dramatically changing the daily life, with the world wide web and e-commerce altering the world into a digital global village. The most recent change in information technology is the internet banking which is a part of virtual banking and another delivery channel for customers. The various services provided by e-banking are: Electronic Funds Transfer (EFT), Automated Teller Machines (ATM) and Point of Sales (PoS), Electronic Data Interchange (EDI) and Credit Cards Electronic or Digital cash.
Insurance: Life has a lot of uncertainties. The chances of an incident or an event which cause losses are very uncertain. The risks present are death or disability of human life; fire and theft of property; perils of the sea for shipment of commodities and many others. If anything takes place, the individuals and/or, companies may suffer a huge loss, maybe beyond their capacities to bear them. It is to reduce the effect of such uncertainties that we need insurance.
Functions of Insurance: Providing certainty, Protection, Risk sharing, Assist in capital formation.
Principles of Insurance: The principles insurance are utmost good faith, indemnity ,proximate cause, subrogation, contribution, mitigation.
Life Insurance: Since life is very precious and any unexpected thing can happen, everyone tries to insure themselves. There are every chances for all the individuals to experience something accidental including death. If that's the case then there will be no one to take care of the other members of the family if they are dependent on that person. The other risk is that the person may live too long that until he becomes old enough to retire. The earnings are going to decrease and end even in the latter. Hence to overcome such difficulties people seek help from the insurance companies.
To overcome the uncertainty of life, life insurance policy was introduced. The important points of a life insurance bond are:
- The bond is suppose to have all the essentials of a valid contract.
- The assured has to be true and honest in giving information to the insurance company as it is a bond of utmost good faith.
- The insured must have some interest in the life insurance policy. Without any interest the bond is void.
- This contract is not a bond of indemnity.
Fire Insurance: Fire insurance is a bond whereby the insurer, giving consideration to the premium paid, undertakes to compensate any loss or damage caused by fire accidents during a specified period the amount mentioned in the policy. Normally, the fire insurance is specified only for an year and renewed every year. like other policies the premium is either paid as a lump sum or in installments.
Marine Insurance: A marine insurance bond is an agreement whereby the insurer agrees to undertake to indemnify the insured in the manner and to the extent thereby agreed against marine losses. It gives protection against loss caused by marine accidents like collision of ship with the rock, or ship attacked by the enemies, fire and captured by pirates and actions of the captains and crew of the ship. These happenings cause loss, damage or theft of the ship and cargo and non-payment of the cargo and hence marine insurance insures ship hull, cargo and freight. Thus, it is a solution by which the insurer undertakes to reimburse the owner of a ship or cargo for complete or partial loss at sea.
Communication Services: Communication services are helpful in applying contacts to the outside world viz., suppliers, customers, competitors etc. Business has to communicate with others for sharing of ideas and views rather than being in isolation. They need to be fast and accurate in order to be efficient. They are mainly classified into postal and telecom services.
Postal Services: They provide various facilities which are broadly classified into financial facilities, mail facilities.
Telecom Services: They provide various methods of telecommunication like Cellular Mobile Services, Radio Paging Services, Fixed line services, Cable Services, VSAT Services, DTH services.
Transportation: Transportation comprises freight services along with supporting and auxiliary services by every mode of transportation i.e., rail, road, air and sea for the transport of goods and international carriage of passengers. We already know the comparative advantages and disadvantages of different modes of transportation. Also transportation removes difficulties of the place and makes available to the consumer from the place of production.
Warehousing: Storage is always an important aspect for the development of economy. The warehouse is actually a static unit for keeping and storing commodities in a systematic manner with some scientific help so as to maintain their original quality, value and usefulness. Typically rail, truck or bullock cart transport the merchandise to the warehouse initially and later moved by hand and stacked inside. In India normally ,manufacturers, importers, exporters, wholesalers, transport business, customs etc., use them.
Types of Warehouses: the different type are private, public ,bonded, government and cooperative warehouses.
Functions of Warehousing: The following are the functions performed by warehouses : consolidation, break the bulk, stock piling, value added services, price stablisation, financing.