Products and Services

In Today’s world many businesses prefer to sell their Products as Services, as there are distinct advantages to both Sellers and Buyers. In order to understand the trend and the benefits, the first step is to understand clearly the basic differences of Services from Products.   There are at least six key parameters which distinguish the Services from Products.

Intangibility

Service is generally an experience and it is an act that does not exist after the service is performed, whereas a Product is tangible. While Product is displayable, services are generally not displayable.

Inseparability

Consumers / Customers are involved in the production of the service as against their absence in the product manufacturing.   On many occasions multiple customers / consumers are present at the time of service delivery, making it a complex job for the service provider.  If a single customer is dissatisfied, it could be seen by other customers.   While mass production of a product is normal, mass production of service is very difficult. Example, is hair dressing.

Perishable in nature

We can not produce the service and store for future consumption. Since the service can not be stored, the associated problem is about managing the peak load conditions. Example, is airline seats.  The seats are available only till the time, the flight takes off.

Heterogeneity

Generally the standardisation is difficult.    The same employee delivering the same service could get different results.    The quality control process is difficult to implement and many times, it could be an after-the-fact incident resulting in utmost data gathering.

Lack of ownership

The services can not be owned by the customers.   Example, after the end of an outsourcing contract, the customer does not own anything.

Customer contact

While production of any service the amount of customer contact is variable and this make the service delivery a complex function. Example for high contact service is direct personal banking services, while example for low contact service is remote monitoring services.

Knowing the basic differences between Products and Services should help us to position and articulate the value of services in front of clients.

For more information kindly contact rv@bizintek.com.my