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After reading this page you should turn to your notes and:
- Write out, in your own words, a definition of services market, without looking at the computer screen
- Make a note of at least two more examples of a services market
- Think of at least one other problem that a business operating in a services market might face
Definition:
Services markets deal with services rather than goods. A service is an intangible product – something that cannot be physically touched – such as advice given by a bank. A good is a tangible product – it can be physically touched – such as a car or a magazine.
Examples:
- The market for hairdressing is a services market
- The market for holidays is a services market
Relevance to Business:
The market for services is often reliant on a personal “one to one” relationship between the seller and buyer. As there is no physical product to talk about, it’s usually the quality of the end product that matters e.g. the quality of the haircut in relation to the price charged. However, sometimes there isn’t even a tangible end product – a bank could provide financial advice that may or may not help a business improve its performance. As a business selling services, often your biggest problem is convincing the customer that he or she needs the product and that he or she will benefit from the product. Services markets are now the biggest group of markets in the UK.
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