Services versus Products

Read this chapter, which describes how intangibility differentiates a service from a product. While reading this passage think about what intangible purchases you may have made and how you determined the value of the product was high enough given the price.

Intangibility

A defining characteristic of a service is that it is intangible – it is not something physical that you can see, touch, or taste.

Learning Objectives

  • Describe how intangibility differentiates a service from a product.

Key Takeaways

Key Points

  • The intangibility of services is what primarily differentiates a service from a product.
  • Intangibility poses a challenge to those marketing a service, as they often need to give tangible proof for the quality of service.
  • Buying services are risky for the customer; hence, providing adequate tangible proof of good service ensures repeat customers.

Key Terms

  • intangible: Incapable of being perceived by the senses; not having a physical presence.

Intangibility

Intangibility is used in marketing to describe the inability to assess the value gained from engaging in an activity using any tangible evidence. It is often used to describe services where there isn't a tangible product that the customer can purchase, that can be seen, tasted, or touched. This is the most defining characteristic of a service that differentiates it from a product.

When a customer is buying a service, he perceives a risk related to the purchase. It is difficult for a customer to know in advance what they will be getting. To reassure the buyer and build his confidence, marketing strategists need to give tangible proof for the quality of service. Service providers can inspire confidence in the service by having a clean facility that customers can see, an easy-to-navigate website that shows service offerings, and a reliable and courteous staff to help customers. Because of service intangibility, consumers are less likely to switch brands or try new ones.

Given the intangibility of services, marketing them becomes a particularly challenging and yet extremely important task. Due to the increasing homogeneity in product offerings, the attendant services provided are emerging as a key differentiator in the mind of the consumers. For example, in the case of two fast food chains serving a similar product (Pizza Hut and Domino's), it is the service quality, not the actual product, that distinguishes the two brands from each other. Hence, marketers can leverage the service offering to differentiate themselves from the competition and attract consumers. These services, such as having a polite and friendly staff, can really distinguish one fast food place from another, both of which offer the same kind of food.


Intangible Service: Teachers provide a service that is intangible.

Source: Lumen Learning, https://courses.lumenlearning.com/boundless-marketing/chapter/services-versus-products/
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