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difference between product and service

marketing- product and service

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difference between product and service

  1. 1. Amal Babu Elizabeth James Fasna K P Gladia Joy Joshi Thomas Presentation by ,
  2. 2. What is a product ??  An article or substance that is manufactured or refined for sale. Ex : iPods', furniture, etc..  Every product or service has a purpose.  Products are tangible, they can be seen and touched, felt or experienced.  There will be time gap between production and consumption of goods.
  3. 3. Types of products  Consumer products  Shopping products
  4. 4.  Specialty products  Unsought products  Business products
  5. 5. What is a Service?  A service is something someone can do for money. Ex : workers  They are not tangible.  A major part of service marketing depends on the relationship the marketer/ seller is able to establish with the customer.
  6. 6. Types of services  The nature of the service providing process  The subject of the service  The nature and function of the service  The company class
  7. 7. Difference between products and services Products Services Concrete Activity or process Tangible Intangible Homogeneous Heterogeneous Product and distribution of goods is separated from consumption. In services, production, distribution and consumption is simultaneous. The core value of products is produced in the factory Services is produced in the buyer-seller interaction Can be stored Impossible to store Transfer of ownership of goods from the manufacturer to the dealer to customer. Can have access to the service but cannot own it.
  8. 8. Products Services Products ma or may not be perishable. Have to be availed within time Include intermediaries Offered directly through various sale points Reach customers through various distribution channels Have to be availed at service facility. Inseparable Separable Easier to market More difficult to market More control over quality Less control over quality Quality is an investment Quality dictated by budget You must solve pain in a repeatable way Customer decides what they need Requires upfront capital Can be started with least capital
  9. 9. Difference in managing a product business and a service business 1.WHO COMES TO WHOM  Products are transported to through distribution channels  Services are location-based 2.STANDARDIZATION OR CUSTOMIZATION  Customers like many of their products to be standardized  Customers want most of their services to be customized. 3.QUALITY DELIVERY  Quality of product within itself is embedded at the time of manufacture.
  10. 10.  Qualities that people expect from service includes customization and variation. 4) TANGIBLITY  The products are tangible and can be inspected / sampled before buying.  Service on the other hand is experiential and sometimes based on a belief. 5) SCALABILITY  Is scaled up by expanding the manufacturing capacity , distribution and sales reach, and access to more customers. (To be continued..)
  11. 11.  It needs a supply of trained service providers and this involving either poaching people from the competitors, induction, training and motivation. 6) OWNERSHIP  A product can be an asset that builds the wealth.  A service cannot be owned as is always shown as an expense. 7) THE SOURCE OF VALUE  The quality of the products depend on how materials are chosen and converted. (To be continued..)
  12. 12.  The quality of the service depends on how the service providers are selected, trained and motivated. 8) THE ROLE OF SENIOR MANAGEMENT  The process of creating a market-driven design in a product business involves many months of work by expert manpower and managers before the product is produced.  The same process of creating a market driven design needs to happen in front of the customer in few minutes in services. 9) THE POSITION OF THE CUSTOMER  The customer is outside the manufacturing process. (To be continued..)
  13. 13. (To be continued..)  In the service business the customer is inside the business. 10) THE ROLE OF STANDARDIZATION AND MECHANIZATION  Frequently standardizes its products. Mechanization is used extensively in the processes.  Asking customers on-line what they desire and then the company tries to deliver it in an individualized manner in real time.
  14. 14. What is service quality ??  Service quality is a comparison of expectations with performance.  A business with high service quality will meet customer needs whilst remaining economically competitive.  Improved service quality may increase economic competitiveness.
  15. 15. Five essentials for improving service quality  Tangibles  Reliability  Responsiveness  Assurance  Empathy
  17. 17. 1. Learn to listen to your customers first 2. Look at all complaints about your service as an opportunity to improve.
  18. 18. 3. Establish an environment where great service is recognized and rewarded and poor service is challenged and rectified. 4. Have weekly fun staff meetings where both the good and bad service elements are discussed.
  19. 19. 5. Ensure that your staff feel they are an important part of your success 6. Lead by example
  20. 20. 7. Do things regularly to improve the workplace Happy staff = happy customers 8. Give your staff a reason to come to work with a big smile on their face and a great attitude
  22. 22.  The service quality model highlights the main requirements for delivering high service quality.  It identifies 5 gaps that causes unsuccessful delivery.  This aim may be achieved by understanding and improving operational processes; identifying problems quickly and systematically; establishing valid and reliable service performance measures and measuring customer satisfaction and other performance outcomes. Service gap model
  23. 23. GAP 1
  24. 24. Customer’s expectations Company’s perceptions of customer expectations • Inadequate marketing research orientation • Lack of upward communication • Insufficient relationship focus • Inadequate service recovery Reasons for provider gap I
  25. 25. GAP 2
  26. 26. Translation of perceptions into service quality specifications Management perceptions of customer expectations • Poor service design • Absence of customer-defined service standards • Inappropriate physical evidence and services cape Reasons for provider gap 2
  27. 27. GAP 3
  28. 28. • Poor human resource policies • Failure to match supply and demand • Customer not fulfilling their roles • Problems with service intermediaries Service delivery Customer-driven service designs and standards Reasons for provider gap 3
  29. 29. GAP 4
  30. 30. External communications to consumers Service delivery  Lack of integration of marketing communications  Inadequate management of customer expectations  Overpromising  Inadequate horizontal communications Reasons for provider gap 4
  31. 31. Closing the gaps Gap 1: Learn what customers expect Gap 2: Establish the right service quality standards Gap 3: Ensure that service performance meets standards Gap 4: Ensure that delivery matches promises
  32. 32. • Use research, complaint analysis, customer panels • Increase direct interactions between managers and customers • Improve upward communications • Act on information and insights listen to customers Closing gap 1: Learn what customers expect
  33. 33.  Top management commitment to providing service quality  Set, communicate, and reinforce customer-oriented service standards  Establish challenging and realistic service quality goals  Train managers to be service quality leaders  Be receptive to new ways to deliver service quality  Standardise repetitive tasks Closing gap 2: Establish the right service quality standards
  34. 34.  Prioritise tasks  Gain employee acceptance of goals and priorities  Measure performance of service standards and provide regular feedback  Reward managers and employees for achievement of quality goals Service Quality Awards
  35. 35.  Attract the best employees  Select the right employees  Develop and support employees – train employees – provide appropriate technology & equipment – encourage and build teamwork – empower employees – internal marketing Can I take your order? Closing gap 3: Ensure that service performance meets standards
  36. 36.  Retain good employees  Measure and reward service quality achievements  Develop equitable and simple reward systems You are a Star Service Provider
  37. 37.  Seek input from operations personnel on what can be done  ‘Reality’ advertising • real employees, real customers, real situations  Seek input from employees on advertising  Gain communications between sales, operations and customers  Internal marketing programs Closing gap 4: Ensure that service delivery matches promises
  38. 38.  Ensure consistent standards in multi-site operations  In advertising, focus on service characteristics that are important to customers  Manage customer’s expectations What are realistic expectations? Explain industry realities  Tiered service options Offer different levels of Service - user pays Why do we always have to wait?
  39. 39. ServQual - five dimensions of service quality reliability, responsiveness, assurance, empathy and tangibles Gaps model of service quality Identify the gaps Reasons for the gaps Closing the gaps Measuring customer satisfaction & service quality Conclusion
  40. 40. References  services-marketing   650.html  59599311.html  services/    regardless-of-your-title/   Measure-the-Quality-of-Your-Customer-Service  benefits.aspx 