BUSINESS SERVICES

            Business Services

The activities which facilitate or assist or support the business activities are called business services.

  • Difference between goods and services




Basis Services Goods
Nature An activity or process. A physical object.
Type Heterogeneous Homogeneous
Intangibility Intangible Tangible
Inconsistency Different customers having different requirements. Different customers having standard requirements.
Inseparability Simultaneous production and consumption Separation of production and consumption

 

  • Types of Services
Business Services Social Services Personal Services
Used by business enterprises for the conduct of their activities Provided voluntarily in pursuit of certain social goals They are experienced differently by different customers
Eg. Banking, insurance, transportation Eg. Health care and education services provided by certain Non-government organisations Eg. Tourism, recreational services

 

  • Banking
Type of Banks Functions of commercial banks E-banking and its benefits
Commercial Banks:

They accept deposits from public

Acceptance of deposits It means banking through internet.
Cooperative Banks: They are meant for providing cheap credit to its members. Lending of funds Benefits :

·         24 X 7 services

·         Transactions from office or house or while travelling

·         Financial discipline

·         Greater customer satisfaction

·         Competitive advantage to bank

·         Unlimited network

·         Load on the branches reduced

Specialised Banks: They provide financial aid to industries. Cheque facility
Central bank: It supervises, controls and regulates the activities of all the commercial banks .

 

Remittance of funds
Allied services

 

  • Insurance

It is a contract or agreement under which one party agrees in return for a consideration to pay an agreed amount of money to another party to make a loss, damage or injury to something of value in which the insured has a pecuniary interest as a result of some uncertain event.

 

Functions of Insurance Principles of Insurance Types of insurance
Provides certainity of payment for the risk of loss. Utmost good faith: It is the duty of the insured

to voluntarily make full, accurate disclosure of all facts

Life insurance: Provides protection against uncertainity of life.
Provides protection from probable chances of loss. Insurable Interest: The insured must have an insurable interest in the subject matter of insurance. Fire insurance: Provides protection against risk of fire.
The loss is shared by all the persons exposed to it  Indemnity: The insurer undertakes to put the insured, in the event of loss, in the same position that he occupied immediately before the happening of the event. Marine insurance: Provides protection against marine losses

 

Assist in capital formation Proximate Cause: An insurance policy is designed to provide compensation only

for such losses as are caused by the perils which are stated in the policy.

Subrogation: It refers to the right of the insurer to stand in the place of the insured, after settlement of a claim.
Contribution:  It is the right of an insurer who has paid

claim under an insurance, to call upon other liable insurers to contribute for the loss of payment.

Mitigation: It is the duty of the insured to take reasonable steps to minimise the loss or damage to the insured property.

 

  • Communication

Communication services are helpful to the business for establishing links with the outside world viz., suppliers, customers, competitors etc.

  • Types of communication services

 

Postal Telecom
Financial facilities Eg. PPF, NSCs Mobile telecom services
Mail facilities Eg. Parcel facilities, greeting post etc. Radio paging services
Cable services
DTH Services

 

  • Warehousing

It means storing goods for future use.

Types of warehouses Functions of warehousing
Private warehouses: Owned and managed by big business houses Facilitates storage
Public warehouses: Owned and managed by anybody under the license granted by the govt. Stabilises prices
Cooperative warehouses: Owned , managed and controlled by the cooperative undertakings Transfers risk
Government warehouses: Owned and managed by central or state govt. or public corporation or local authorities. Facilitates financing
Bonded warehouses: Keep the goods in bond before payment of duty. May be owned privately or by govt. Breaking the bulk
Packaging

 

  • Glossary



Business services: Auxiliaries to trade.

Banking: It refers to accepting deposits from the public for the purpose of lending and investment.

Communication services: helps in maintaining a link with the outside world.

E-banking: Banking on the internet.

Insurance: A device by which loss is shared between persons.



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