The Nature of Economic Goods

Inseparability means that the consumer is involved with the production of the service, where most goods are produced without the consumers direct involvement. In this way, a physician cannot give an exam without the consumer being present, but an automobile is produced without interaction on the consumer's part.

Heterogeneity refers to the fact that services tend to be less similar to each other than the same types of goods. For example, there can be significant differences in the competence of dentists, even in the same office, but standardized preparation of manufactured goods is one of the reasons that manufacturers are able to stay in business.

The last characteristic of a service is that of perishability. This means that a service cannot be stored and used later, as can be done with many goods. If a service is not consumed, it is lost (or it perishes).

In recent years, the American economy has grown increasingly service-oriented. More and more businesses ar

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to the goods themselves, with the result that all parties in the marketing equation are acutely aware of the effect of atmosphere. 15. Market potential is the aggregate dollar (or unit) market for a particular product or type of product. Few products ever reach their full market potential because of innovation, imperfect marketing, and the general inefficiencies of the marketing process. However, market potential is relied upon by companies to determine what products they choose to produce. Determining market potential is not an easy task for existing products; it is an intricate and complicated undertaking for proposed products. Market researchers set out to determine whether consumers would purchase a particular product, at what price they would purchase it, and how many would actually follow through on the purchase. This, in and of itself, can be difficult enough since such research relies on statistical techniques and survey analysis which is complex when dealing with an existing product. However, when dealing with a proposed product, there can be considerable difference between what the researchers explain and what the consumer perceives, and when the product is brought to market, it may not be (indeed it is unlikely t
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Approximate Word count = 7977
Approximate Pages = 32 (250 words per page)

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