Here`s a caveat: when online video provider Akimbo decided to combine a set-top box with a movie download service in 2004, it seemed like the perfect deal. Product and service were inextricably linked – one was worthless without the other. Sales of the DVR would generate a steady stream of revenue from subscription fees, and customers who want the convenience of downloading videos would have to invest in the hardware. But the company stumbled when it evaluated the lowest-rated component of the package, the set-top box, at $199, without understanding that the real profit potential lay in the download service. Things went wrong when the company charged users for its movie service. The shows weren`t of the highest quality, and customers were annoyed at having to pay for them on top of what they had already paid for the high-priced box. The bid failed and the company ceased operations in 2008. Today, many companies try to mix products with services to increase sales and balance cash flow. Hybrid solutions – products and services combined with innovative offerings – can help companies attract new customers and increase demand from existing customers by delivering superior value. Such offers are common – think Apple (the iPod product combined with the iTunes service) and Xerox (copiers and printers that come with maintenance or after-sales services). For these companies and many others, hybrid solutions have boosted growth or helped reverse declining market share or profits.
However, is there a distinction between perishable and imperishable in services? Services may be described as perishable, but not imperishable. A perishable service simply means that it is short-lived. Ideally, such a service is consumed as soon as it is produced. Unlike products, the service cannot be registered for further use. While your product may be technical, don`t get caught up in complicated industry jargon. Explain and describe what you offer in layman`s language so that someone who doesn`t know your business understands it and is enthusiastic. It may be necessary to provide basic background information if it is an area or industry that people are not familiar with. Proprietary technology is a system, software, application or tool protected by intellectual property laws that has been developed solely in-house within a company or acquired by another company or person that grants the company the rights to that technology. Proprietary technologies may be licensed to other companies or used as a competitive advantage for the company that owns the technology. Although services are not perishable in the same way as products, they can become obsolete. For example, an auto mechanic who maintains a car that is no longer manufactured would offer a service that would become obsolete.
Software and other digital media are also becoming obsolete as the industry evolves and consumer needs change. Most services fall into one of these key categories: Understanding the differences between products and services can change the way you market and promote them to your target audience. While the two categories share some similarities, they also differ in some important ways. These differences affect who might be interested in buying certain products versus services. In this article, we will discuss the differences between products and services, as well as the marketing tools to use for each category. Competitive intelligence involves researching and understanding a company`s industry and its main competitors, while business intelligence includes software and applications that help in a company`s strategic planning. Why do you need to define your product or service so thoroughly? It`s important to have clarity to have a definite vision of what you`re doing or selling. To be successful, a company needs to know exactly what it is selling to its customers. This allows for focus, which helps companies know how the product or service is selling best and where the corresponding market is.
Products are tangible items offered to consumers through a specific marketplace for consumption, acquisition or attention. When someone wants to buy a product, they may want to feel it or physically interact with it to determine if it`s the right option for them. An example is the clothes that many people try on before buying. To allow consumers to physically interact with products, an online retailer may offer free return shipping for exchange.