Question

Why is service becoming more important than a product? Give five reasons.

Answer 1

1. Rising Income and Standard of Living: As people’s incomes improve, they spend more on services like travel, healthcare, entertainment, and education rather than on basic things.
2. Changing Lifestyle and Urbanisation: Urban living, dual-income families, and hectic schedules have increased demand for services such as restaurants, online food delivery, courier services, beauty salons, gyms, and child care.
3. Technological Progress: Technology has created new service sectors such as the internet, mobile telephony, online banking, e-commerce, OTT platforms, and IT services.
4. Increased Complexity of Products: Modern products are more sophisticated, requiring specialised installation, repair, and maintenance services (for example, automotive and electrical after-sales service).
5. Globalisation and Growth of Service Sector: With global trade and liberalisation, the service industry has expanded significantly, including banking, insurance, logistics, tourism, BPO, and consultancy. In countries such as India, services account for more than half of GDP.