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difference between product and service marketing

The difference between product marketing and service marketing

  • What to keep in mind when marketing products vs. services
  • We show you the differences to look out for
  • How to improve the way you’re marketing your products vs. services
You might already be aware that there are many different types of marketing. The kind of marketing strategy that you decide to employ will be influenced by your goals and target audience. But it will also be influenced by the type of product or service that you are promoting. Not all marketing strategies are created equal. For example, there is a difference between product marketing and service marketing, and the two require different strategies.

Cloud IT is changing the dynamic

In a world where IT companies no longer really sell products in the traditional way that the definitions above refer to, it’s important to understand the differences between product and service marketing so you can put in place the right strategy for your business.

Today, IT companies sell products like Office 365 which falls under Software as a Service (SaaS). This blurs the lines between the two traditional definitions and needs to be covered in your marketing strategy. Our advice when talking about a product such as software which is packaged as a service, is to err on the side of the ‘service marketing’ camp.

For businesses in the B2B world, and especially those that work in a partner network, such as Microsoft Partners, differentiating themselves in a competitive marketplace and understanding the difference between product and service marketing can be crucial to their continued growth.

Our blog sets out the difference, helping you to better market your business, whether you offer a product and service or both.

The difference between product marketing and service marketing

The obvious difference between product and service marketing is that products are tangible, and services are intangible.

Products

Tangible products are often thought to be easier to market as they can be shown, demonstrated, touched, displayed and are easier for your audience to understand in terms of value or whether they are needed. Whether this is true or not is difficult to call, especially when you consider the blurred lines of the B2B technology world, where products and services are becoming more and more entwined.

Regardless, the aim of your marketing strategy should include finding the right market for your product and promote it in a way that gets the best response from your target audience. It’s important to remember that your product stays the same regardless of who you are targeting and can be returned if the customer is dissatisfied.

Services

Services, being intangible, can be harder to show value. You can’t see or touch a service. Often, then, the goal of marketing services is to create good relationships with your target audience, developing and building trust. You are essentially selling yourself.

Let’s break down some of the traditional differences between product and services and how this might affect the marketing decisions around each.

Customisation

While products are designed, built and delivered to a range of customers ‘as standard’, services can be tweaked and customised depending on the needs or wants of customers. Your service marketing strategy should reflect this by highlighting the personal touch you provide or how you listen to your customers’ needs.  

Ownership

A product can be bought, used and then resold ‘second-hand’, while a service cannot once it’s been consumed. A product is also a separate entity to the business who creates/sells it. A service, on the other hand, is always connected to the business who provides it. The marketing for services should be all about building the brand and personality of the service provider.

Expiration

It’s also important to understand that services are consumed immediately and cannot be returned once carried out. This is where the marketing goal of creating trust comes in. If you provide a bad service your customers cannot return the service, but they may not return as customers. Once a buyer has bought a product it doesn’t mean they will buy from you again but if they are happy with it, it makes it more likely that they will.

Time

Usually, services are provided at a specific time for a specific period. After this, the service agreement must be renewed or cancelled. A product can be bought and owned without any time constraints. Marketing differences here should centre around the value of low-cost monthly subscriptions in the case of services, or a ‘buy once, use forever’ message for a product.

See the chart (source) below for a comparison of the differences between product and service marketing:

Product marketing Service marketing
Meaning Product marketing refers to the process in which the marketing activities are aligned to promote and sell a specific product for a particular segment. Service marketing implies the marketing of economic activities, offered by the business to its clients for adequate consideration.
Marketing mix 4 P’s 7 P’s
Sells Value Relationship
Who comes to whom? Products come to customers Customers come to service
Transfer It can be owned and resold to another party. It is neither owned nor transferred to another party.
Returnability Products can be returned. Services cannot be returned after they are rendered.
Tangibility They are tangible, so customer can see and touch it, before coming to the buying decision. They are intangible, so it is difficult to promote services.
Separability Product and the company producing it, are separable. Service cannot be separated from its provider.
Customization Products cannot be customized as per requirements. Services vary from person to person, they can be customized.
Imagery They are imagery and hence, receive quick response from customers. They are non-imagery and do not receive quick response from customers.
Quality comparison Quality of a product can be easily measured. Quality of service is not measurable.

Bringing product and service marketing together

It’s even more important for Microsoft Partners to understand the differences between product and service marketing as there are so many who sell Software as a Service like Office 365. We have set out the differences here to help you to better market your business, whether you offer a product, a service or both.

For more information on how we can help your business create effective marketing strategies whether you are a systems integrator, an ISV or a reseller, contact us today.

 


Fifty Five and Five specialise in B2B marketing for tech companies around the world. Get in touch with us today to find out how we can help you multiply your leads with proven B2B marketing tactics.

Stephen Reilly

Stephen Reilly

Stephen works in our growing writing team, joining us after a long stint working in the United States.

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