Products and Services | Meaning, Definition, Differences

What are Products and Services?

A product is tangible (visible). It has physical existence. By acquiring a product a person may acquire an asset, e.g., a television set. A product may be capable of being reused for a certain time. Examples are soap, toothbrush, etc. On the other hand, a person while availing a certain service. Example — Transport, medical, legal, etc., incur expenditure. Service is intangible in nature.

Products and Services - Meaning, Definition, Differences

Products and Services – Meaning, Definition, Differences

Definition of Service

The American Marketing Association defines services as

activities, benefits or satisfactions which are offered for sale or are provided in connection with the sale of goods.

From the definition it is clear that provision of service may be in connection with the sale of products, e.g., after-sale or repair service or it may not be in connection with the sale of goods, e.g., banking, insurance, legal, catering and other services. The provision of medical service may involve sale of certain goods by a doctor to his client, e.g., false teeth, contact lens, artificial limbs, etc.

1. It is tangible.It is intangible
2. Quality standards can be attained.It is very difficult to attain quality standards.
3. It may be an asset sometimes,. e.g., fridge, television set, etc.It involves expenditure without any tangible return benefit.
4. Physical possession is possible.Physical possession is not possible.
5. It can be stored.It cannot be stored.
6. It can be transported.It cannot be transported.
7. The producer and the seller may be different persons.The producer of service is the seller too, e.g., medical and legal services.
8. Assembling is very important.Assembling has no relevance at all.
9. Skill of the seller alone cannot determine sale.Skill of the service provider is the deciding factor in most cases, e.g., legal, catering and medical services.
10. Production and distribution need not take place simultaneously.Production and distribution of service will have to be done simultaneously, e.g., provision of electricity.
11. Packing plays a crucial role in the marketing of any product.It has no relevance in the marketing of service.
12. Both Brand name and Trade name are important in the marketing of any product.Brand mark and Trade name are important in the marketing of services.
13. Labelling is an integral part of marketing. It is required as per law.It has no relevance.

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