Products and Services
Understanding the fundamentals of what businesses offer
What Are Products?
A product is a tangible item that is manufactured or produced to satisfy customer needs and wants. Products are physical objects that customers can see, touch, and own.
Key Characteristics of Products:
Products are tangible, can be stored as inventory, are manufactured or created in advance, and ownership transfers from seller to buyer.
Types of Products
Consumer Products: Goods purchased by end consumers for personal use (clothing, electronics, food).
Industrial Products: Goods purchased by businesses for operations or production (machinery, raw materials, office supplies).
Durable Products: Long-lasting items that can be used repeatedly (cars, furniture, appliances).
Non-Durable Products: Items consumed quickly or used once (food, cosmetics, cleaning products).
What Are Services?
A service is an intangible offering that involves performing work or providing value for customers. Services cannot be touched or stored, but they meet specific needs or solve problems.
Key Characteristics of Services:
Services are intangible, cannot be stored or inventoried, are produced and consumed simultaneously, and often involve direct interaction between provider and customer.
Types of Services
Professional Services: Expertise-based offerings (consulting, legal advice, accounting).
Personal Services: Services for individual wellbeing (healthcare, haircuts, fitness training).
Hospitality Services: Customer experience focused (hotels, restaurants, entertainment).
Technical Services: Specialized knowledge services (IT support, repairs, maintenance).
Products vs. Services: Key Differences
Products
- Tangible and physical
- Can be returned or exchanged
- Standardized quality
- Separable from producer
- Can be owned
Services
- Intangible and experiential
- Cannot be returned easily
- Variable quality
- Inseparable from provider
- Can only be experienced
Hybrid Offerings
Many modern businesses offer a combination of products and services. For example, a restaurant provides both food (product) and dining experience (service). A car dealership sells vehicles (products) and offers maintenance (services).
Examples of Product-Service Combinations:
Software companies provide programs (products) with customer support (services). Electronics retailers sell devices (products) with warranty and repair services (services). Gyms offer equipment (products) and personal training (services).
