Product vs service: unveiling key differences

Product and service­ are fundamental concepts in busine­ss that play a significant role in shaping global commerce. The­y have distinct characteristics that set the­m apart, although it can be challe­nging to clearly define the­ boundary between the­ two due to their overlapping attribute­s.

In this article, we will delve­ into the key differe­nces betwee­n products and services in the hospitality industry. By the e­nd of this article, you will have a solid understanding of product/service differences and how these­ distinctions manifest themselve­s in various sectors, with a particular focus on the hospitality industry.

Definition of product

Let’s start by e­stablishing a shared understanding of the te­rm ‘product’ in a business context. It refe­rs to any tangible items designe­d for sale, including goods produced by companies and se­rvices offered by se­rvice provider.

Characteristics of a product

Products have particular attributes that make them recognizable to consumers, which are:

1. Tangibility: products are typically physical items experienced through the senses — sight, touch, taste, smell or hearing
2. Consistency: products bear consistency in product features. Buyers repeatedly purchasing the same product (like cola) expect uniformity each time
3. Stockable: this trait implies products can be stored and accumulated for future use, a crucial aspect in marketing strategies
4. Transferable ownership: when a buyer acquires a product, they obtain ownership rights

These factors make even more sense when we examine product versus service.

Definition of service

As above, it’s also important to have a clear unde­rstanding of what defines a service­. A service can be de­scribed as an action or performance one­ party provides to another, which is esse­ntially intangible in nature and does not involve­ ownership. Frequently, se­rvices are create­d and consumed simultaneously.

It’s crucial to note ‘service’ in this context does not re­fer solely to customer support after a purchase­. As we e­xplore the concept of product ve­rsus service further, it’s important to ke­ep this distinction in mind.

Characteristics of a service

Considering the complexity inherent in their definition, services possess certain unique characteristics that set them apart from products, which include:

1. Intangibility: services cannot be touched or physically held. They lack physical substance. For example, you cannot carry education in your hands, even though it’s considered a valuable service
2. Inseparability: the provision of a service is usually simultaneous with its consumption. Also known as concurrent production and consumption, this feature prevents storing services for later use, a key distinction when discussing product versus service
3. Variability: in general, no two services rendered are completely alike. They differ based on who provides them and when they are provided. This factor is often harnessed in the provision of personalized experiences in hospitality services
4. Perishability: services have a time-dependent nature and usually cannot be stored, another distinguishing feature when examining the difference between product and service

Understanding these concepts paves the way for exploring product-service dynamics in different areas, such as within hotel management. We’ll also look at tangibles versus intangible elements, costs and returns.

Difference between guest services and customer service

While guest services and customer service are often used interchangeably, there are subtle differences that separate them. The main distinguishing features are:

• Guest services primarily focuses on welcoming guests and ensuring their comfort. The term ‘guest’ conveys a sense of hospitality, emphasizing the warm and personal approach adopted when catering to their needs
• Customer service is a broader concept that applies when someone purchases goods or services from a business. The term ‘customer’ refers to a more transactional relationship, where the emphasis is on providing efficient and satisfactory service to all patrons, not just guests

Guest services in the hotel industry

Hotel businesses rely on delivering exceptional guest services to maintain loyal customers and attract new guests. This involves several key aspects:

• Check-in and check-out: smooth and efficient check-in and check-out processes are crucial to making guests feel valued and at ease
• Concierge services: hotels frequently offer concierge services to help guests with reservations, travel arrangements and local recommendations
• Room amenities and housekeeping: these services ensure rooms are well-equipped with amenities and impeccably maintained
• Dining services: high-quality dining experiences that can be provided either in-room or at on-site restaurants
• Personalized attention: hotels strive to make guests feel special by offering personalized touches, such as greeting by name and remembering preferences

What kind of guest services should a modern hotel provide?

Some key guest services prized by modern travelers include:

• Digital check-in and check-out: a streamlined check-in and check-out process using mobile apps and digital platforms that creates a fast, more convenient user experience
• Smart room technology: guests can control lighting, temperature and entertainment preferences through their smartphones or tablets
• Contactless payments: ensures a seamless, convenient and hygienic experience for guests
• Virtual concierge: allows guests to access information and request services at their convenience
• Sustainable practices: eco-friendly initiatives, such as energy-efficient systems and waste reduction, aligns with modern travelers’ environmental concerns

Other examples of guest services

​​Restaurant guest services can encompass a range of activities to make patrons feel welcome and at ease, such as:

• Greeting guests with a smile and escorting them to their table
• Offering complimentary appetizers or drinks
• Providing detailed explanations of menu items and accommodating dietary preferences
• Anticipating guests’ needs and promptly refilling drinks or clearing empty plates
• Checking on guests during the meal to ensure satisfaction with the food and service
• Offering dessert or after-dinner drink recommendations based on guests’ preferences
• Presenting the bill promptly and processing payment efficiently

Theme park guest services can include:

• Offering express passes or priority access to popular rides
• Providing assistance and information at information kiosks
• Hosting character meet-and-greets for children and families
• Implementing queue management systems to minimize wait times
• Offering rental services for strollers, wheelchairs and other equipment
• Providing designated rest areas and water stations for guests
• Handling lost and found items and ensuring their safe return to guests

Retail store guest services include:

• Managing returns through the computer system
• Offering gift-wrapping services for purchased items
• Offering loyalty programs to reward repeat customers with exclusive benefits
• Hosting special events or sales for loyal customers

Airline guest services can encompass the following:

• Offering priority boarding and lounge access to premium class passengers
• Providing assistance with baggage check-in and handling
• Accommodating special meal requests or dietary restrictions
• Offering comfort items for long-haul flights
• Assisting passengers with flight connections and transfer information
• Resolving flight-related issues promptly and communicating updates effectively
• Providing in-flight entertainment options and Wi-Fi services.

Types of guest services jobs

In the guest services industry, there are various job roles that focus on catering to the needs of guests, including:

• Customer service agent: interacts with guests, handles inquiries, resolves complaints and ensures a positive experience
• Guest service representative: acts as a front-line ambassador of a business, responsible for providing a warm welcome and addressing guest needs
• Service agent: assists guests with reservations, bookings and other service-related tasks

Demonstration of quality

Demonstrating quality adds another layer to the product versus service discourse. As customers can physically inspect products prior to purchase, they can get an immediate sense of quality assurance. Assessing service quality often happens during or after delivery due to its inherent ephemeral nature, making excellent execution vital for success.

Variety and customization

Variety and customization differ in terms of products versus services too. Primarily identifiable pre-set variety could be your approach when dealing with products such as offering different cuisine options at your hotel restaurant. By contrast, services endorse individual responses and hence thrive on customization, where personalizing guest experiences serve as the unique selling proposition.

Customer relationship

Customer relationships differ notably between products and services. While a product’s occasional failure might not heavily impact sales, delivering poor services can have more personal and long-reaching effects. Maintaining consistent, high-quality experiences is crucial for positive guest relations. Discover the many facets of delivering exceptional service through our hospitality degrees.

Marketing strategies for products and services in hospitality

 

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In the hospitality industry, distinct strategies have emerged for managing products or services. Astute marketers have pioneered inventive tactics that leverage both to maximize success in this area. Embracing innovation in hotels and staying abreast of trends can also inform marketing approaches.

Blending products and services

Rather than separating products and services, a strategic blend can reap exponential benefits. Companies have capitalized on this concept by enhancing product offerings with supplementary services, which lead to enriched customer experience.

For instance, consider vacation packages that include wellness spa services or a multi-course dinner paired with wine. While the core offer may be a physical room or a meal, adding extra elements to create a memorable experience captures attention more effectively.

Testing the offering

Testing is a shared practice for both product and service businesses. Whether dealing with tangible hospitality products or intangible elements, pre-launch testing is key. Testing uncovers potential anomalies that could influence buyer decisions and can guide adjustments before entering the market.

These tests also yield insights into customer preferences, shaping future campaigns and strategy. Dedication to quality assurance demonstrated during testing builds consumer trust, enhancing a company’s reputation.

Creating urgency

In marketing, it’s acknowledged urgency drives conversions. This psychological trigger benefits both product and service companies. Time-sensitive offers, rooted in the scarcity principle, can prompt swift purchases. Exclusive advantages available within specific time frames spur immediate actions.

Advantages and disadvantages of products and services

It’s critical to understand the key benefits and drawbacks that are relevant to both products and services to establish a successful business. In this section, we explore these aspects.

Advantages of products

With the physical nature of products, there are various advantages, such as:

1. Tangibility: tangibility of products allows for ease in demonstration, which is beneficial from a marketing perspective. It enables potential buyers to touch, see or even smell before making a purchase decision
2. Storable value: unlike services, most products can be stored and made available for consumption when required
3. Non-dependency: the product company has less dependency on human input once the manufacturing process is complete

Disadvantages of products

There are also valid downsides to dealing with physical goods, such as:

1. Inventory management: maintaining an inventory carries certain costs such as storage, spoilage or even the risk of becoming obsolete
2. Quality assurance: ensuring all manufactured items adhere to consistently high quality standards can be a challenging task when scaling up product distribution
3. Return and warranty claims: faults or perishability can significantly raise the odds of customers returning defective goods or claiming on their warranty

Advantages of services

As opposed to physical merchandise, the service sector offers unique benefits such as:

1. Flexibility: selling services often allows more room for customization tailored towards an individual client’s needs or preferences
2. Relations building: continual interaction during service provision fosters a stronger customer relationship than when selling tangible goods
3. No inventory hassles: services don’t require storage space or expire prematurely

Disadvantages of services

Equally important, there are a few caveats associated with offering services:

1. Perceived value differences: determining price may become complicated due to diverse perceived values among consumers for the same service
2. The inseparability of provision and consumption: most services have a simultaneous provision and consumption process, which calls for hassle-free coordination between service provision and customer consumption
3. Customer dependency: success depends heavily on how well service providers interact with their clients

Understanding these distinctions, and the advantages and disadvantages that are part of products and services respectively, can inform better strategies for delivering sales or services in every field.

Examples of products and services

Let’s consider some tangible instances that illustrate the basic difference between product and service.

Product examples

Many physical goods or products are offered globally. Examples of products include:

1. Consumer electronics: an iPhone from Apple is a typical example of an electronic product. You can touch, feel and use this product physically
2. Automobiles: a Mercedes-Benz S-Class car signifies prestige as much as its utility, showing sometimes a product embodies more than mere functionality
3. Food products: a packet of cookies purchased from your local convenience store is an example of a consumable product example
4. Apparel: a designer dress from Prada is another case where you buy a distinctive product based on personal preferences such as style and fit.

These examples emphasize core aspects of products, such as tangibility and acquisition through purchase.

Service examples

Services generally represent intangible activities delivering value without leading to the possession of anything concrete. Here are a few illustrations:

1. Professional counseling: hiring a counselor when you’re in emotional distress denotes receiving value without obtaining physical goods
2. Cleaning services: if you hire a company to clean your house, you’re seeking services that can’t be owned
3. Online streaming platform subscription: paying Netflix for a monthly streaming service falls into the category of buying and selling goods and services, where viewing content is the service bought by users

Conclusion

Comprehending your business offering, whether centered around products or dedicated to guest-centric convenience, is pivotal in today’s competitive hospitality world. A clear grasp of products and services can lay the groundwork for successful marketing strategies. These strategies cater to the diverse needs of discerning consumers while aligning with organizational objectives. Understanding the product-service definition is key and ultimately contributes to how a business flourishes amid ever-evolving customer expectations while optimizing profitability.

Photo Credit

Main Image: sanjeri/E+ via Getty Images