Products vs Service
Is it worth distinguishing between the two? If so, what is the most important difference in distinguishing between a Product and a Service?
A product or service is something that has value to someone.
Something is a term that can include anything offered for your attention, acquisition, or consumption: ideas, goods, services, places, organizations, personalities. Q
What has value is an expression that means that what is offered can satisfy a need or desire, fulfill a requirement or provide a benefit. For someone it is a statement that states that some people will be willing to get what is offered, that is, they will be willing to make an exchange.
This description does not recognize differences between products and services, so it might seem that distinguishing them has no strategic implications for the company. In fact, Theodore Levitt states that 'There are no Service Industries; there are only industries whose service components are larger or smaller than those of other industries. '
The traditional definition of service seems to confirm this: a service is any act or performance that one person can offer to another, which is essentially intangible and does not carry any property. Its production may or may not be linked to a physical product.
Reasonably, we must think that it is very difficult for services, essentially intangibles, to exist by themselves. Some tangible elements are required to be able to deliver the service and get the benefit to the client. For example, the gypsy who reads the future uses a whole set of tangible elements to produce the desired effect.
Likewise, essentially tangible products carry service components that become very important: installation, warranty, customer service would be very obvious examples. A smile on the part of the seller, facilities in the form of payment, or the brand image may not be so.
The fact that product and service are combined to offer something that has value for someone does not mean that there are no differences between the two. In fact, there are 5 characteristics of the services that have strategic implications of the greatest importance for their correct marketing.
Services are intangible because before they are purchased they cannot be seen, tasted, felt, heard or sniffed. This causes uncertainty in who intends to acquire them, and to reduce it, the client will look for evidence about the quality of the service as they see the place, the people, the equipment, the written communication, the symbols, the price and other associated elements.
Therefore, the concern of the service provider should be to manage the evidence, in order to make the intangible tangible.
Services are generally produced and consumed at the same time. Rather, physical products are manufactured, inventoried, and distributed by multiple resellers and subsequently consumed.
If the service is provided by a person, then the person is part of the service.
Services are highly variable because they depend on who, when and where they are provided. The main risk derived from this characteristic is the irregularity in the quality of the service offered. The logical answer is to take a few steps towards quality control.
Some of them have to do with investing in a good selection and training of personnel; standardize the service execution process; monitor consumer satisfaction through complaint systems, surveys and purchase comparison in such a way that poor service can be detected and can be corrected.
Services cannot be stored or inventoried. If they are not used when offered, they are lost. Examples, an empty movie theater or an unused hospital bed represent income that has been lost forever. And the strategic implication of this characteristic has to do with the fact that unpredictable demand can cause serious difficulties.
The best way to avoid the perishability of the service is to make a good conciliation between supply and demand, which can be achieved in two ways, adjusting the supply, or smoothing the demand.
Adjusting the supply requires actions such as hiring part-time employees or introducing efficiency routines for peak demands. For example, in a hospital, paramedics assist surgeons, or in a bank, desk clerks temporarily become cashiers.
Supply can also be adjusted by increasing consumer participation. For example, with the auto - filling of forms. With shared services or land for future expansion. There are schools that operate overnight for extension courses, or restaurants that at night they use the adjoining office parking space.
Smoothing the demand can be done by establishing Prices differentials that tend to shift peak demands towards normal seasons. For example, to grow demand in the off-season, McDonald's launches the McMuffin Egg Breakfast; a movie theater doubles the price of tickets on Sunday afternoons.
Demand can also be smoothed through peak-hour add-on services that provide alternatives to waiting line customers. For example, receiving a cocktail in the lobby while a table is vacated in the restaurant. And of course, there are the reservation systems.
Because both the provider and the client are present when the service is produced, it becomes essential in the marketing of services to take care of the client-provider relationship.
Beyond the steps to control quality previously listed, a continuous monitoring system should be implemented that allows a supervisor to observe how the relationship occurs during an actual transaction.
In conclusion, we can say that the characteristics of the services have very important strategic and operational implications for their successful commercialization, even more so if we consider that in reality every offer made to customers is actually a combination of physical product and intangible service.
For my taste, the main difference between product and the service is that the exchange of this does not result in the ownership of a good, but in the mere benefit that is the result of having received the service. That is to say, we do not carry a physical object with us at the end of the transaction, but we are left with the result of having received the service and the feeling of satisfaction according to the quality of the care received.