difference between product and service

Amal Babu
Elizabeth James
Fasna K P
Gladia Joy
Joshi Thomas
Presentation by ,

What is a product ??
 An article or substance that is manufactured or refined for sale.
Ex : iPods', furniture, etc..
 Every product or service has a purpose.
 Products are tangible, they can be seen and touched, felt or
experienced.
 There will be time gap between production and consumption of
goods.

Types of products
 Consumer products
 Shopping products

 Specialty products
 Unsought products
 Business products

What is a Service?
 A service is something someone can do for money.
Ex : workers
 They are not tangible.
 A major part of service marketing depends on the relationship
the marketer/ seller is able to establish with the customer.

Types of services
 The nature of the service providing process
 The subject of the service
 The nature and function of the service
 The company class

Difference between products and
services
Products Services
Concrete Activity or process
Tangible Intangible
Homogeneous Heterogeneous
Product and distribution of goods
is separated from consumption.
In services, production,
distribution and consumption is
simultaneous.
The core value of products is
produced in the factory
Services is produced in the
buyer-seller interaction
Can be stored Impossible to store
Transfer of ownership of goods
from the manufacturer to the
dealer to customer.
Can have access to the service
but cannot own it.

Products Services
Products ma or may not be
perishable.
Have to be availed within time
Include intermediaries Offered directly through various
sale points
Reach customers through
various distribution channels
Have to be availed at service
facility.
Inseparable Separable
Easier to market More difficult to market
More control over quality Less control over quality
Quality is an investment Quality dictated by budget
You must solve pain in a
repeatable way
Customer decides what they
need
Requires upfront capital Can be started with least capital

Difference in managing a product
business and a service business
1.WHO COMES TO WHOM
 Products are transported to through distribution channels
 Services are location-based
2.STANDARDIZATION OR CUSTOMIZATION
 Customers like many of their products to be standardized
 Customers want most of their services to be customized.
3.QUALITY DELIVERY
 Quality of product within itself is embedded at the time of manufacture.

 Qualities that people expect from service includes customization and
variation.
4) TANGIBLITY
 The products are tangible and can be inspected / sampled before
buying.
 Service on the other hand is experiential and sometimes based on a
belief.
5) SCALABILITY
 Is scaled up by expanding the manufacturing capacity , distribution
and sales reach, and access to more customers.
(To be continued..)

 It needs a supply of trained service providers and this involving either
poaching people from the competitors, induction, training and
motivation.
6) OWNERSHIP
 A product can be an asset that builds the wealth.
 A service cannot be owned as is always shown as an expense.
7) THE SOURCE OF VALUE
 The quality of the products depend on how materials are chosen and
converted.
(To be continued..)

 The quality of the service depends on how the service providers are
selected, trained and motivated.
8) THE ROLE OF SENIOR MANAGEMENT
 The process of creating a market-driven design in a product business
involves many months of work by expert manpower and managers
before the product is produced.
 The same process of creating a market driven design needs to
happen in front of the customer in few minutes in services.
9) THE POSITION OF THE CUSTOMER
 The customer is outside the manufacturing process.
(To be continued..)

(To be continued..)
 In the service business the customer is inside the business.
10) THE ROLE OF STANDARDIZATION AND MECHANIZATION
 Frequently standardizes its products. Mechanization is used
extensively in the processes.
 Asking customers on-line what they desire and then the company
tries to deliver it in an individualized manner in real time.

What is service quality ??
 Service quality is a comparison of expectations with
performance.
 A business with high service quality will meet customer needs
whilst remaining economically competitive.
 Improved service quality may increase economic
competitiveness.

Five essentials for improving
service quality
 Tangibles
 Reliability
 Responsiveness
 Assurance
 Empathy

HOW TO IMPROVE SERVICE
QUALITY AT YOUR
BUSINESS..??

1. Learn to listen to your customers first
2. Look at all complaints about your service as an
opportunity to improve.

3. Establish an environment where great service is recognized
and rewarded and poor service is challenged and rectified.
4. Have weekly fun staff meetings where both the good and
bad service elements are discussed.

5. Ensure that your staff feel they are an important part of your
success
6. Lead by example

7. Do things regularly to improve the workplace
Happy staff = happy customers
8. Give your staff a reason to come to work with a
big smile on their face and a great attitude

 The service quality model highlights the main
requirements for delivering high service quality.
 It identifies 5 gaps that causes unsuccessful delivery.
 This aim may be achieved by understanding and improving
operational processes; identifying problems quickly and
systematically; establishing valid and reliable service
performance measures and measuring customer satisfaction
and other performance outcomes.
Service gap model

Customer’s expectations
Company’s perceptions of customer expectations
• Inadequate marketing research orientation
• Lack of upward communication
• Insufficient relationship focus
• Inadequate service recovery
Reasons
for
provider
gap
I

Translation of perceptions into service
quality specifications
Management perceptions of customer
expectations
• Poor service design
• Absence of customer-defined service
standards
• Inappropriate physical evidence and
services cape
Reasons
for
provider
gap
2

• Poor human resource policies
• Failure to match supply and demand
• Customer not fulfilling their roles
• Problems with service intermediaries
Service delivery
Customer-driven service
designs and standards
Reasons
for
provider
gap
3

External communications to
consumers
Service delivery
 Lack of integration of marketing
communications
 Inadequate management of customer
expectations
 Overpromising
 Inadequate horizontal communications
Reasons
for
provider
gap
4

Closing the gaps
Gap 1: Learn what customers expect
Gap 2: Establish the right service quality
standards
Gap 3: Ensure that service performance meets
standards
Gap 4: Ensure that delivery matches promises

• Use research, complaint analysis,
customer panels
• Increase direct interactions
between managers and
customers
• Improve upward communications
• Act on information and insights
listen to
customers
Closing gap 1: Learn what
customers expect

 Top management commitment to providing service quality
 Set, communicate, and reinforce customer-oriented service
standards
 Establish challenging and realistic service quality goals
 Train managers to be service quality leaders
 Be receptive to new ways to deliver service quality
 Standardise repetitive tasks
Closing gap 2: Establish the
right service quality standards

 Prioritise tasks
 Gain employee acceptance of goals and
priorities
 Measure performance of service
standards and provide regular feedback
 Reward managers and employees for
achievement of quality goals
Service Quality Awards

 Attract the best employees
 Select the right employees
 Develop and support employees
– train employees
– provide appropriate technology &
equipment
– encourage and build teamwork
– empower employees
– internal marketing
Can I
take your
order?
Closing gap 3: Ensure that
service performance meets
standards

 Retain good employees
 Measure and reward service quality
achievements
 Develop equitable and simple
reward systems
You are a
Star Service
Provider

 Seek input from operations personnel on what can be done
 ‘Reality’ advertising
• real employees, real customers, real situations
 Seek input from employees on advertising
 Gain communications between sales, operations and
customers
 Internal marketing programs
Closing gap 4: Ensure that
service delivery matches
promises

 Ensure consistent standards in multi-site
operations
 In advertising, focus on service
characteristics that are important to
customers
 Manage customer’s expectations
What are realistic expectations?
Explain industry realities
 Tiered service options
Offer different levels of
Service - user pays
Why do we
always have
to wait?

ServQual - five dimensions of service quality
reliability, responsiveness, assurance, empathy
and tangibles
Gaps model of service quality
Identify the gaps
Reasons for the gaps
Closing the gaps
Measuring customer satisfaction & service quality
Conclusion

References
 http://www.compassitesinc.com/blogs/the-difference-between-product-and-
services-marketing
 http://marketing-list.blogspot.in/2011/05/5-differences-between-products-and.html
http://smallbusiness.chron.com/difference-between-marketing-products-services-
650.html
 http://www.studymode.com/essays/Differents-Between-Product-Service-
59599311.html
 http://businessnetworking.com/the-importance-of-knowing-your-products-and-
services/
 https://www.stat.auckland.ac.nz/~mullins/servicequality/ServQualModel.pdf
 http://en.wikipedia.org/wiki/Service_quality
https://www.futuresimple.com/blog/5-characteristics-for-great-customer-service-
regardless-of-your-title/
 http://www.enotes.com/homework-help/what-product-feature-195967
 http://www.unitiv.com/intelligent-help-desk-blog/bid/64005/5-Effective-Ways-to-
Measure-the-Quality-of-Your-Customer-Service
 http://www.entrepreneurship.org/resource-center/productservice-features-and-
benefits.aspx
 http://smallbusiness.chron.com/customer-service-characteristics-756.html

difference between product and service

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difference between product and service