Why Marketing Products and Services Are The Same

Some people believe that there is a major difference between a product and a service from a marketing point of view.  This assumption is one of the farthest things from the truth!

From a marketing point of view. service is a product.  As I always like to say, the receipt is the same but the ingredients are different.  Let me explain.

Let’s start with the “research” of the potential for offering of a product or service.  For both, one needs to understand the needs, the audience, the audience’s perceived values, what they might pay for the product or service. Some differences might be that a product has a finite speed where as a service is not so absolute and thus a service might be harder to quantify.  Usually a product has tangible features while a service has intangible features and thus slightly more challenging tasks for the marketer.

What is the offer, what are the product or service capabilities, what problem does it address, how this solution is better than the competition? Again products can usually be defined in specifics, where as services need more explanation.

A business case needs to be developed, in this case it might be units sold versus number of hours sold, but in either case there must be a forecast with related investments and profit targets.

Next, features and benefits: a product feature might be how fast it performs and the related benefit might be saving time and thus costs.  A service feature might be ease of installation, thus the benefit is saving time and also saving costs. The benefits of a product may be easier to measure than a service benefit, which might be more judgmental. In either case, like the offer itself, the marketer has to make the feature and benefits understandable to the potential buyer.

Value propositions: again, products and services all have value propositions. An example for a product is high reliability under stress, while a service example could be best practices for that industry. Probably the approach to creating the value propositions might be different.  For products, some innovative features or enhancement, while a service might be complete solutions (which might include products and services) to solving a business need.

Case studies or testimonials are needed in either case.  Buyers need to know that other buyers who have similar issues have used this product or service and have seen positive results.  A challenge here is subjective things like quality.  For a product an end user can test the product, as for a service this is more unquantifiable, but things like acceptance testing or a SLA (Service Level Agreement)  can start to address quality issues from a service point of view.

All types of collateral are needed to support a product or service.   How is your sales force or reseller going to promote your product without some supporting material?  Another challenge is demonstrating a service versus a product.  Another reason for testimonials or case studies.

Training is needed both for the internal and external audience.   Just like products, customers need to be trained on the installation, operation and maintenance of services (for those who select to do these functions themselves).

The key point is that products and services are the same from a marketing point of view.  Most marketers are experienced in marketing products and less with marketing services. The challenge is to define service attributes like products so that potential customers can understand the service and identify it with their needs or pain points.

Have you thought about marketing your services to add to your 2010/2011 revenue stream?

RHL 9/14/10

5 comments to Why Marketing Products and Services Are The Same

  • I agree Bob. That said one of the challenges of packaging services as products is that it can be harder to crystallize the benefits.

    Often it’s hard to separate the personality of the service provider from the service itself. As with the captcha’s on the bottom of websites, it can be hard to extract the signal from the noise. Of course, that can happen with products too.

    Here’s an example of service packaging. I’d welcome concrete suggestions for improvement. Thanks!

  • Wow, that was very well laid out, Barbara!

  • Barbara
    I looked at your offer, excellent and very comprehensive. I agree, as I stated, getting the “words” regarding a service offer is a hard task. The other key point , which you stress is targeting the audience, as I have always stated customer segmentation is probably the key step. My only suggestion regarding your offer is you might want to have a “summary ” type offer for those who are searching and want to get a quick overview versus having to go through each tab
    Cheers
    Dick

  • Thanks for the article. Basically marketing a product or service is the same. It is about how we provide the solution to the customer’s needs. The difference is just the approach/method on how we are going to market it. Marketing a service will be more difficult since it is an intangible product, that’s why a marketeer should emphasize more on the VALUE. On the other hand, when market a product, besides the value, a marketeer should also emphasize on the features and USP.

    -Sandra-

  • Hey Barbara, thanks for the interesting article. Basically you are right – product and service are the same from marketer point of view. I think that indeed marketing a service is harder because you have to show the extra value and it's harder for people to see it.

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