Services vs Products

How often do you come across these categorizations? Oh Amazon is a service based company!Google is really focused on developing functional products!Ask anyone in the IT industry and they will go into a detailed discussion about these categories of companies.

What is a service?A service is provided to you when you go and ask for it.It is tailored to your needs and delivered to you based on your requirements.The service you requested may not be available to another customer.The Huffington Post is an incredible service company. They solve the problem of political commentary on the web

So what is a product?A product is software which has already been developed and is delivered to a wide number of customers.So here the software is built even before the customer approaches the company.Microsoft Office is a product.

So how are these companies different from each other?

• Service based companies rely on their skills to provide a service to the customer which brings in investment.Services may differ from customer to customer and hence customer relationship is primary.Product based companies rely on their products.They sells the same product to different customers and can be assured that customer experience is predictable.
• Product based companies can have a global target.Service based companies target a more specific domain.
• Product companies invest on marketing to build on their brand and create awarenesss and demand for their products.Service based companies are more focuses on delivering to a specific target and hence market to a defined set of potential clients.
•  Product companies tend to focus on building their brand reputation, improving their market position and making sales, while service companies tend to place their focus on increasing revenue, rather than market shares.

Where does your interest lie?

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