Differences between Products and Services

Recently updated on August 20th, 2023 at 11:41 am


The major key feature of a product is that it is physical and it is also tangible. This implies that a product can be held, it can be seen, felt or smelled. As such, the sale of a product is a once off transaction. However, it should also be noted that a product can be returned to the seller for replacement or refund in the event that it is wrong or damaged. When the customer is not satisfied with the product, he can return it to the seller in exchange of the right type of product desired.

The value of the product is often created and derived from the product by the user. In other words, the user knows what exactly he or she truly desires from a product hence the decision to buy it. It is the same customer who can derive value from purchasing a product unlike the value of the service that is created by the service provider.

The other important aspect about a product pertains to ownership. A product can be owned by the purchaser since ownership is transferred the moment a transaction has been performed. The fact that a product is tangible makes ownership transferrable unlike a service that can only be felt. Once a product has been bought, it can then be easily separated from the provider since the customer can take it home for personal use. Ownership of a service can therefore not be transferred to its user.

The customer care perspective of a product is limited compared to that of a service. In a service, it is customer care that attracts the buyers of that particular service while in a product, elements such as branding and other product features that differentiate it from similar products that attract the customers.


A service is work done by another person for another individual. For instance, a person will visit a restaurant to have the desired services performed by other people while they relax on their tables. Legal advice is another good example of a service rendered to another person by professional lawyers. In most cases, people are usually attracted by the quality of service they get from a particular organization instead of the product itself. Quality service is satisfactory and people who are satisfied will continue doing business with the company.

The billing process of a service is continuous unlike that of a product. For instance, a service can be in the form of monthly subscriptions where a service is rendered upon receipt of the subscription. The other notable aspect about a service is that it cannot be returned to the provider since it is intangible. A service is something that can only be felt therefore cannot be returned.

The other issue about a service is about their variability. Services vary according to who provide them, where, when and how. Usually, the quality of the service is mainly determined by the service provider while the customer determines the value of the product upon its purchase. The quality of the service depends on the service provider. The marketers of a service should therefore have knowledge about what the customers really desire such that they can tailor their services to meet those needs. The marketers need to understand the features to sell to the customers.

Summary of Key Differences between Services and Products

  1. Products are tangible: They are physical in nature such that they can be touched, smelled, felt and even seen. Services are intangible and they can only be felt not seen.
  2. Need vs.Relationship: A product is specifically designed to satisfy the needs and wants of the customers and can be carried away. However, with a service, satisfaction is obtained but nothing is carried away. Essentially, marketing of a service is primarily concerned with creation of customer relationship.
  3. Perishability: Services cannot be stored for later use or sale since they can only be used during that particular time when they are offered. On the other hand, it can be seen that products are perishable. For example, fresh farm and other food products are perishable and these can also be stored for later use or sale.   
  4. Quantity:Products can be numerically quantified and they come in different forms, shapes and sizes. However, services cannot be numerically quantified. Whilst you can choose different service providers, the concept remains the same.
  5. Inseparability: Services cannot be separated from their providers since they can be consumed at the same time they are offered. On the other hand, a product can be separated from the owner once the purchase has been completed. 
  6. Quality:Quality of products can be compared since these are physical features that can be held. However, it may be difficult to compare the quality of the services rendered by different service providers.
  7. Returnability: It is easier to return a product to the seller if the customer is not satisfied about it. In turn, the customer will get a replacement of the returned product. However, a service cannot be returned to the service provider since it is something that is intangible.
  8. Value perspective: The value of a service is offered by the service provider while the value of the product is derived from using it by the customer. Value of a service cannot be separated from the provider while the value of a product can be taken or created by the final user of the product offered on the market.
  9. Shelf line: A service has a shorter shelf line compared to a product. A product can be sold at a later date if it fails to sell on a given period. This is different with regard to a service that has a short shelve line and should be sold earlier.


Basis Goods Services
Meaning Goods are the material items that can be seen, touched or felt and are ready for sale to the customers. Services are amenities, facilities, benefits or help provided by other people.
Nature Tangible Intangible
Transfer of ownership Yes No
Evaluation Very simple and easy Complicated
Return Goods can be returned. Services cannot be returned back once they are provided.
Separable Yes, goods can be separated from the seller. No, services cannot be separated from the service provider.
Variability Identical Diversified
Storage Goods can be stored for use in future or multiple use. Services cannot be stored.
Production and Consumption There is a time lag between production and consumption of goods. Production and Consumption of services occurs simultaneously.

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