What Is Service Product?
Service product is when a business offers a service and a product or a good together as its practice.4 min read
2. Goods and Services Combined
3. Transitioning From Service to Product
Service product is when a business offers a service and a product or a good together as its practice. This is also called service-good mix, and it can refer to many different types of businesses in all different industries.
What Is the Difference Between a Service and a Product?
Businesses can offer both services and products in exchange for payment, but they do have some major differences. A service is a process that is intangible. This means it doesn't have physical dimensions to it; it can't be measured or weighed. Services usually provide some kind of tangible product in the end, but not always.
A product or a good is a physical thing. Products are always the result of a process. You have the product of a pizza after you go through the process of making a pizza.
Some customers can feel uncomfortable paying for a service because they can't see an end result before purchasing. If you want to buy a good, such as shoes, you can try them on and hold them before purchasing. If you want a foot massage, you can't get the massage first, see if you like it, and then pay. Once the service has been rendered, it must be paid for, whether you are happy with the results or not. The payment terms in service contracts can sometimes allow for a way out of paying if the customer is dissatisfied.
Services require a level of interaction with customers or clients, but a product does not. If you're providing a service, you'll need to be able to handle the presence of customers, whether online or in a shop of some sort. Product sellers don't necessarily need to be concerned with handling customer presence. Many online companies sell tons of products without much customer interaction.
There are also more variables in play when it comes to services versus products. Some services technologies such as ATMs provide do not vary in their service provided, but those that humans provide will always vary. It is impossible for a human hair stylist to provide the same exact haircut on every customer, every day. However, products can be manufactured to specific and rigorous standards and meet them every time with the proper processes in place.
Products can be stored and revisited over time, but services are time dependent and expire after a certain period. If you take a flight from New York to Paris, you cannot come back to that same exact flight next week. It happened; it's over. A new pair of glasses can be stored in a case and used daily.
These differences aren't necessarily applicable in every circumstance. There are services that have become very well-tailored over time, so they have little to no variance each time they are offered. There are also services that can be revisited or reused. The point of fleshing out these differences is to give an overall idea of the definitions of service and product.
Goods and Services Combined
Most companies actually combine services and products in their offerings to customers. Think of a grocery store. It provides plenty of products for you to purchase and take home, but it also provides a service when the cashier scans and bags your products, and the worker returns your grocery cart to the store. There's a continuum with pure services on one end and pure goods on the other, and most business offerings to customers fall somewhere between those two ends.
There are pure good and core goods. Pure goods include things such as:
- Food products
Core goods include things such as:
- Data storage
Pure services include:
- Medical advice
- Financial advising.
Core services include:
- Airline flights
- Hotel accommodations
- Internet services
- Cleaning services.
Pure goods offer goods that act mostly as basic commodities. Core goods are physical objects that provide a service as they're used. Pure services provide services that remain totally intangible, while core services provide a service with tangible aspects.
Transitioning From Service to Product
Some companies will transition from offering services to offering products to eliminate certain downsides of providing services, but they're not always successful. If a company assumes that going from providing a service to selling a good will get rid of frustrating customers, they are wrong. While services do generally require more face-time with clients and customers, products can require some, too.
Keep in mind that the service product distinction is somewhat fluid. Much of how a company experiences either depends on its setup or specific offerings.
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