You love a good party (we all do), and you want to turn that passion into a business. But you’re not sure whether to offer party planning services, sell themed supplies, or a combination of both. This important decision will determine your approach. Understanding the difference between a product and a service can help you build a business that suits your preferences.
What is the product?
Products are digital or tangible items that a business produces, stores, and sells to satisfy a customer need or want. They can range from essentials like toothpaste or groceries to non-essential items like designer handbags or e-books.
What are services?
A service is an intangible service, often an activity or process. Unlike a product, a service is temporary. You usually have to pay more than once to continue enjoying the service. For example, you have to pay to get another haircut or another month of Netflix.
The services offered can be medical care, car washes, spa treatments, etc. The value of a service lies in the experience and results it provides to the customer.
Product-Focused vs. Service-Focused vs. Hybrid Businesses
We can classify businesses based on their primary business activities. Understanding the differences between these business types can help you develop effective sales and marketing strategies. Marketing Strategy.
Product-centric business
Product-centric businesses sell digital and physical goods. Examples of product-centric industries include: Home appliancesFashion/apparel, household goods, etc.
Product-centric businesses often Research and Development, intellectual property Protection, and Supply Chain Optimization To stay competitive.
In 2015, Gloria Han thousanda bicycle helmet company. To create a helmet that combined safety with style, she worked hard on design principles that would set her products apart, which meant countless iterations to get it right.
“I think you really have to be vocal about these little features, that’s what differentiates your product,” Gloria said on the show. Shopify Master Podcasts“We make 10 samples in similar colors to decide which one we ultimately want. In the long run, we have a product that people love that lasts longer. Attention to detail is key, and I think customers recognize that.”
Examples of product-centric businesses include:
- Allbirds. This sustainable shoe company uses materials like merino wool and sugarcane to create comfortable, eco-friendly shoes.
- Gymshark. This fitness apparel brand designs and sells high-quality workout wear for men and women.
- anchor. The electronics manufacturer produces a wide range of charging accessories, power banks, and audio equipment.
Service-focused business
Service-focused businesses provide intangible services and experiences. Service-focused industries include healthcare, education, finance, hospitality, transportation, and professional services such as consulting, law, and accounting.
The service department is driven by skilled professionals, effective communication and continuous improvement. Brand reputation And attract Loyal Customers.
Here are some examples of companies that offer services:
- The Ritz-Carlton. Outstanding Luxury Hotel Chain customer service And attention to detail.
- JPMorgan Chase. One of the largest banks in the United States, Chase offers personal banking, investment and wealth management services.
- Concierge shopping. Concierge services handle a variety of tasks on your behalf, in this case, a skilled professional will source the clothing item you wish to purchase.
Hybrid Business
Hybrid businesses combine consumer goods and intangible services to create complete solutions for their customers. These end-to-end offerings often combine technology, innovation and intellectual property to address complex customer needs.
Hybrid industries include software programs with training and support, communications providers offering hardware and connectivity services, and the automotive industry providing both vehicles and maintenance. Subscription-based service.
By seamlessly integrating products and personalized services, the product-service model can build more comprehensive and engaging customer relationships. Customer ExperienceThis leads to increased customer loyalty and lifetime value.
Here are some examples of hybrid businesses:
- Peloton. The fitness company sells high-tech stationary bikes and treadmills, and also offers a subscription-based app for live and on-demand workout classes.
- ring. The technology company sells home security systems and doorbells, and also offers services like virtual guards and installation.
- Milk bar. The bakery chain sells unique desserts and baked goods and also offers online cooking classes so customers can recreate their favorite treats at home.
Tips for selling both products and services
Here are some strategies you can implement to sell both products and services:
Create a consistent brand strategy
strong Brand Identity is crucial for businesses. For example, a company that sells eco-friendly cleaning products might emphasize sustainability and environmental responsibility, while a wellness coaching company might focus on personal growth, health, and empowerment in their brand. Message Strategy.
Define how you want to position your business to consistently create on-brand content, advertising, and other future-facing materials.
Market your brand accordingly
Marketing helps you reach potential customers, but your approach will vary depending on several factors, including the location, reach, and nature of your target audience.
For example, local bakeries can help with community events, local partnerships, and Word of mouth marketingMeanwhile, global e-commerce stores and virtual consulting services Digital Marketing Strategy like Search Engine Optimization (SEO)social media advertising, and Influencer Marketing Collaborate to reach a larger audience.
Take advantage of cross-selling and upselling opportunities
Cross-selling and Upsell Increase revenue, Customer Lifetime ValueProduct-based businesses may suggest complementary items that enhance the functionality or enjoyment of their main product. For example, a smartphone retailer may recommend protective cases, screen protectors, wireless earbuds, etc. during a sale. Checkout Process.
Service-based businesses can also upsell by offering premium or additional services that add value. A hair salon might suggest a deep conditioning treatment in addition to regular haircut services. Upselling services can also include recommending more frequent service visits or longer-term packages, such as a monthly massage subscription or an annual car maintenance plan.
Invest in customer education and support
For businesses that sell products, services, or both, investing in customer education and support is essential.
Product-based businesses can provide comprehensive product information, user manuals, and how-to guides to help customers make an informed purchase. Purchase decision Use the product effectively.
Service-based businesses can also benefit from communicating the value of their services to customers. For example, a financial planning firm can offer free educational resources, sales materials, and marketing materials, such as blog articles, white papers, and podcasts that explain key financial concepts and strategies.
Optimize your pricing and packaging strategy
Pricing and packaging strategies are extremely important for any business selling a product or service.
Product-based businesses should conduct thorough market research to determine competitive pricing and identify value-based pricing opportunities. For example, an organic skin care company can justify higher pricing by highlighting the quality of its ingredients, sustainable sourcing, and the effectiveness of its formulas compared to conventional alternatives.
Service-based businesses benefit from offering tiered pricing options to accommodate different needs and budgets. Boutique marketing agencies will offer basic packages that include essential services like social media management and email marketing, while also offering more comprehensive packages that include content creation, SEO and paid advertising.
A range of pricing options allows you to attract a wider customer base and allows your clients to choose the level of service they prefer.
Frequently asked questions about products and services
What are some examples of products and services?
A smartphone is an example of a product, while a haircut at a salon is an example of a service.
Can a company provide both products and services?
Yes, a business can offer both a product and a service, such as an electronics store that sells laptops and offers repair services.
Will your product or service be easier to sell?
The ease with which you can sell your product or service depends on a number of factors, including your target market, the competition, and what you offer.
