Fifty Five and Five

The difference between product marketing and service marketing

⭐⭐  UPDATE 1st June 2020 – This post has been updated with some additional information and even more advice. Read on to learn more… 👍

  • Want to understand the difference between product marketing and service marketing? Then this post is for you.
  • We will show you the key differences between the two, with  a focus on the B2B tech industry.
  • We will teach you what the various audiences are looking for.
  • Get top tips and practical advice.

Digital marketing is complex, with different strategies needed to address different objectives. The kind of marketing strategy that you decide to employ will be influenced by both your goals but also what you want the target audience to achieve.

But a fundamental question you should ask is are you marketing a product are service? They are very different animals. Let’s find out why.

The Cloud has changed the dynamic

At Fifty Five and Five we deal with B2B technology and IT companies. In this world companies are dealing much more with a productised offering, rather than simply selling peoples time. The Cloud has played a big part in this, causing companies to rethink how they offer services to their customers.

So if you used to be a purely consultative business it’s important to understand the differences between product and service marketing so you can put in place the right strategy for your company.

Take Microsoft, and their flagship cloud business product Microsoft 365 (Which used to be called Office 365). This very much falls under the category of Software as a Service (SaaS). This blurs the lines between the two traditional definitions (products and services) 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 tech world  (and this is especially true for those that work in a partner network – such as Microsoft Partners, Salesforce partners, AWS etc..) 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.

BONUS CONTENT: Grab a free copy of our B2B Content Marketing bible.

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 touches you provide or how you listen to your customers’ needs.   

  • Delivery When a business sells a product to a customer, the buyer takes it away with them. In the case of a service, the customer must go to the service provider if they want to enjoy or experience it. You cannot separate the service from the provider. For example, if you wanted to buy a DVD from Amazon, you click on the buy button and wait a couple of days for the product to arrive. However, if you want to enjoy the Amazon Prime streaming service, where movies are updated regularly, you need to head to the website and watch the film there.
  •  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. 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’s more likely that they will.
  • Time Usually, services are provided at a specific time for a specific periodAfter 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.

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Stephen Reilly

Stephen Reilly

Stephen leads our content team.