Table of Contents
Difference Between Products And Services
The key difference between products and services lies in the form they exist in, the way they are managed, and the way they are delivered to end users or consumers. While products are tangible items with physical attributes that a customer can touch, feel, sense, and hold, services are intangible facilities that companies provide to their customers. Additionally, a bundle of services can be sold as a product, but a group of products does not amount to an individual service. In simple terms, products are tangible goods offered to customers, but services are facilities that one party provides and the other uses. Services, in many cases, come complementary with products. For example, when one buys a washing machine, it comes with after-sale services, whereby buyers get instant repair and replacement facilities for the products bought.
Key Takeaways
- Products are tangible goods and commodities manufactured with a physical attribute that a customer can hold, feel, and possess.
- Services are intangible products offered through actions and performed activities.
- The key difference between them remains the tangible and intangible aspects. However, a service can be packaged as a product, which is not the case when a product is sold as a service.
- Services can exist independently or can be offered complementary to the goods bought.
Comparative Table
| Particulars | Products | Services |
|---|---|---|
| 1. Meaning | Goods with tangible properties that can be felt, sensed, and touched by customers | These are intangible facilities/amenities, performed actions, accessibility, and with no physical properties. |
| 2. Production and consumption | Any product requires time for production and packaging, and there is a time difference between production and consumption. | Any product requires time for production and packaging, and there is a time difference between production and consumption |
| 3. Nature | Tangible in nature | Intangible in nature |
| 4. Evaluation | Swift, simple and easily evaluated | Complicated |
| 5. Storage | Depending on the type of product, it can be stored for a long or short time. | Services can never be stored. However, they may automatically become null and void after a specific time. |
| 6. Transfer of ownership | Yes, these can be shared or transferred from one consumer to another. | Typically, it is impossible to share or transfer services, given sense of observation unique to each individual. |
| 7. Separation | Products can be separated from their producer or manufacturer | No service can be detached from its provider. |
| 8. Variability | Products are mostly identical in characteristics | Services are exhaustive and diversified |
What Are Products?
Products are nothing but commodities and manufactured goods to solve, apply and offer comfort to human lives. Every day, thousands of people buy products based on their needs; they vary from daily use and fast-moving commodities to long-term serving elements. Everything in the world is produced and manufactured as a product for a consumer; the key feature of a primary product is to have physical attributes, in simple words, things that can be touched, sensed, have a state, and acquire space matter. Everything amounts to a product, from a simple packaged milk to a refrigerator, from a sewing pin to a metal sheet, for someone will always be a consumer of it. Products can have different forms, from the initial raw material stage to work-in-process objects to final manufactured commodities. It is because they are produced and manufactured, whereas services are performed.
Now, many products vs services businesses tend to offer both. They have separate product lines along with many additional services provided to different people. It is done as part of expanding, catering to a bigger market, and solving problems for all types of customers.
Example
When a technology and communication company offers a sim card and a mobile phone, they are its tangible products. It has physical features; customers can touch, hold, and feel its physical presence. Customers can insert the sim card into the mobile phone and activate it to carry it.
What Are Services?
Services are intangible products generated through experience and amenities that can only be enjoyed and consumed without a physical characteristic or presence. Services do not have a shape, size, or space matter but are performed actions and observed traits in products, people, and skills. One of the key aspects of services that products lack is that a bundle of services can be packaged as a product, which means a group of services can become a product, but no two products can be turned into one service.
There is always a debate about products vs services companies. Still, in the real world, both are forms of creating value for the end customer in exchange for generating monetary profit.
Example
Let’s continue with the same example of a tech and telecommunication company offering sim cards and mobile phones. Suppose they also offer data and connection through established mobile towers and satellite connections. This time, they offer services but not the product. A customer can never touch the internet or data provided with an established mobile connection but can still use the service as needed.
Another aspect of a service is that to experience a service, a product is required. For example, to experience an OTT platform streaming service or watch YouTube videos, an individual needs a screen, laptop, tablet, mobile phone, or television as a product to use it.
A key observation in this example is that a company can offer both a product and a service. At the same time, it is also possible that a product and service are interdependent and become useless without each other. For instance, a mobile phone has no specific use without an established connection; likewise, one must need a working and active mobile phone to consume data services.
Similarities
Though products and services have multiple differences between them, they also share some similarities, which have been mentioned below:
- A company offering a product can also offer a service to its customers.
- A bundle of services can be launched and offered as a product to the customers.
- Often, a product and a service are interlinked and dependent on each other and may become useless without the presence of the other when consuming it.
- Both are designed to offer a unique experience in their form.
- Both products and services are produced and performed for value creation in exchange for funds generated through sales revenue.
