Difference Between Product and Service with the Most Important Comparisons

Difference Between Product and Service with the Most Important Comparisons

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Syed Aquib Ur
Syed Aquib Ur Rahman
Assistant Manager
Updated on Feb 9, 2024 16:59 IST

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.

product vs service

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. 

Parameters Product Service
Tangibility Tangible Intangible
Purchase  One-time Recurring
Return Returned  Cancelled
Ownership Transferable and storable Non-transferable and non-storable
Quantifiable/qualifiable Quantifiable  Qualifiable
Examples Books, laptops, furniture, vehicle, etc. Repair, education, medical check-up, etc

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.”

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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. 

Brian de Haaff's Seven components of products

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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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Further Reads

Do You Know the Difference between Market and Marketing?
Do You Know the Difference between Market and Marketing?
A market is where all specific marketing activities occur. It also represents buyers and sellers who gather and interact. And they exchange goods and services based on demand and supply....read more
Difference Between Product Management and Brand Management
Difference Between Product Management and Brand Management
Product Management focuses on developing and improving products, aligning with customer needs and market trends. Brand Management, on the other hand, concentrates on building and maintaining a brand's image, reputation,...read more

FAQs

How do products and services differ in terms of customer involvement?

Products are often purchased and used by customers independently, without requiring ongoing involvement from the manufacturer or seller. In contrast, services typically involve a higher degree of customer interaction and participation throughout the service delivery process.

What are some examples of products and services?

Examples of products include smartphones, clothing, furniture, cars, and computers. Examples of services include legal advice, consulting, healthcare, and transportation. Products can be held, used, or consumed, while services are experienced or utilized for a specific purpose or benefit.

How do products and services differ in terms of delivery?

Products are typically delivered to customers physically, either through direct purchase or shipping. Services, however, are usually delivered through interactions between service providers and customers, often involving expertise, skills, or specialized knowledge.

About the Author
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Syed Aquib Ur Rahman
Assistant Manager

Aquib is a seasoned wordsmith, having penned countless blogs for Indian and international brands. These days, he's all about digital marketing and core management subjects - not to mention his unwavering commitment ... Read Full Bio