Difference Between Product and Service with the Most Important Comparisons

Does the basis of difference between product and service lie in tangibility alone? It is true, you can define a product with tangible characteristics, while a service is intangible. That is just one aspect. In fact, there is a lot more to the product vs service debate.

Tangibility may be the critical differentiator between a product and service, but it is not always the case. You can buy a product and receive some additional service with it. For instance, you go to a restaurant and buy food (product), but you also get a service of the ambience there. Likewise, the tangibility factor becomes more convoluted when it comes to buying and using a product online that comes with a subscription service. Nuances aside, the primary difference between product and service is how it is bought and used. 

Explore

1. Difference between product and service
2. What is a product?
3. What is a service?

Difference Between Product and Service

Here are the main parameters to understand the difference between product and service. 

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What is a Product?

A product is any physical or virtual object a customer buys, owns, stores, resells, or disposes of.  

See how Philip Kotler defines a product.

“A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organization and ideas.”

Kotler’s Five Product Level Model

To cater to the customer’s wants or needs, Kotler has created a Five Product Level Model. 

• Core Benefit  – This is the first level that describes the customer’s basic needs and wants from a product. 
• Generic Product – The product functions at the base functional level.
• Expected Product – The product has features that the customer expects after it fulfils the base needs. 
• Augmented Product – A product that has more features than expected.
• Potential Product – The product’s additional potential in the future 

Brian de Haaff’s Components of Products

To fully understand a product, there are seven components that cater to how customers interact with it. Brian de Haaff, in his book Lovability: How to Build a Business That People Love and Be Happy Doing It  (2017), describes seven components. 

• Marketing 
• Sales
• Technology
• Policies
• Support
• Third-Party Integrations
• Supporting Systems

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Types of Products

There are two broad types of products

• Consumer Products – The finished goods the consumer uses, such as convenience goods (daily purchases like grocery), shopping products (one-time purchases like vehicles), etc. 
• Industrial Products – The goods to be sold to another product manufacturer, such as raw materials required for manufacturing industrial goods. 

Also, explore the difference between consumer and customer.

What is a Service?

A service is intangible. It is the transaction of intangible goods between the service provider and customer. One of the key ways to differentiate it from a product is that a service is neither transferable nor storable. 

Some more characteristics of services include 

• Inseparability from offering and consumption, and
• Simultaneous involvement of both the service provider and the customer.

Let’s check out how Philip Kotler describes a service. 

“A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.”

Do explore Service marketing!

Types of Services

Let’s explore the types of services based on tangibility and intangibility. 

• Services Based on Tangibility – This classification includes services for people such as healthcare facilities, restaurants, etc. Apart from that, there is service for goods including transportation, warehouse facility, repairing, etc. 
• Services Based on Intangibility – This classification covers education, information services, legal services, etc. 

Parting Thoughts

So these are the main differences between product and service. Hope you are able to acquire a better understanding of how they are different besides tangibility. 

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