Product Vs. Service Marketing: 6 Differences to Account For

Are you a service marketer or a product marketer? Or maybe both? You may not have ever thought about this, but there are some important differences that exist between the two.

Back in the 80’s, AT&T faced competition for the first time in their history when the federal government deregulated telecommunications and they were forced to break into several different regional companies. To keep up, many of the new providers rushed out and hired “expert marketing talent” from P&G, Lever, and other consumer packaged goods companies.

The results were not pretty. The newly hired marketing gurus struggled with a lack of performance data, as well as a lack of marketing culture. Many of them left within 12 to 18 months.

But it wasn’t all about data or culture. Marketing a product (like shampoo or dog food) is very different from marketing a service (like telephone communications or legal advice). 

If you want to transition from marketing products to services or vice versa, you have to know, understand, and—most of all—respect the difference between a product and a service. Doing so is the only way to effectively promote and sell what you have to offer. 

So, when it comes to product vs. service marketing, what should you know? Read on for six key differences you must account for at every turn.

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6 Key Differences Between Marketing Services and Products

1. Products are tangible. They are physical entities that you can touch, see, feel, and smell. Services are intangible. One of the biggest challenges of marketing services is creating tangible elements that connect the consumer to the service brand.
2. Products tend to fill a need or want for the customer. Services are more often about building relationships. When you buy a car, you leave with the car and continue to see it and use it. When you leave your doctor’s office, you might not have anything to take away from the transaction.
3. Products usually come in many formulations, whereas services do not. Clothes come in different styles, colors, and sizes. Dog food comes in different ingredient combinations. Services typically do not offer multiple formulations. A doctor’s visit is a doctor’s visit, whether you scheduled it for tennis elbow or diabetes. (You might be able to choose from among different service providers, but the basic elements will be the same.)
4. It is much harder for consumers to evaluate the quality of a service than of a product. If you buy an anti-dandruff shampoo and you develop less dandruff, it works. But did your lawyer draw up a good divorce agreement? You might not know until well down the road.
5. It is much easier to return a product than a service because a service is consumed as it is offered. The cost of services can be refunded, and some services themselves can be reversed, but “returning a service” is usually much harder for the consumer.
6. Every day that a service is offered and not consumed, it is lost forever. If I don’t sell my hotel room tonight, I cannot ever sell it again; it is gone forever. Products on the other hand have a longer life. If I put a box of cookies on the shelf and don’t sell it today, I can still sell it for some period of time beyond today.

As technology gives more and more products a service angle, they begin to take on some of the same elements. In general, however, the difference between product and service marketing is vast. Understanding the basic nature of what you are selling could lead to interesting and valuable insights for marketers.

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Frequently Asked Questions

What is the difference between a product and a service?

Products are generally tangible items, like clothing or car parts. Services, on the other hand, are intangible actions that the seller does for the buyer. In other words, products are produced, while services are performed. 

What is the difference between product and service marketing?

In simplest terms, effective product marketing usually addresses a want or need that the item in question fulfills. Effective service marketing, on the other hand, aims to establish trust, so the consumer is inclined to foster a relationship with the service provider. 

What are the three types of services?

There are three kinds of services: business, social, and personal. Business services are those used by companies to conduct business, like banking. Social services are those provided by organizations like NGOs that aim to accomplish a specific set of goals. Finally, personal services meet an individual’s unique needs. Restaurants and nail salons are two examples of companies that provide personal services. 

Can you market products and services together?

Yes! Depending on the nature of the campaign, though, it could be quite a challenge. Before getting started, it’s imperative to have a thorough understanding of both the product and service, as well as the ways in which consumers will be using them. This is where market research can prove invaluable.