- Intangibility: you cannot touch a service like you can a product.
- Inseparability: Services are consumed at the time of purchase so you cannot separate production and consumption of services.
- Heterogeneity: not all services will provide the same experience for each customer.
- Perishability: services cannot be stored.
- Product strategy: services tend to need added value to be competitive (e.g., free wi-fi).
- Price strategy: services’ prices tend to be based on effort levels or time.
- Promotional strategy: Services cannot be displayed like products can be, so you need to help the customer envision it.
- Place strategy: location needs to be important for services especially because it entices customers.
Frequently Asked Questions: Goods Marketing vs. Service Marketing
What is the difference between Goods Marketing and Service Marketing?
The fundamental difference between goods marketing and service marketing lies in the nature of the offering itself. Goods are tangible products that can be seen, touched, and stored. Services are intangible activities, benefits, or satisfactions provided by one party to another, which do not result in the ownership of anything physical.
This difference leads to key distinctions in marketing strategies and challenges.
What are the key differences in marketing goods vs. services?
Key differences often revolve around four core characteristics of services:
- Intangibility: Services cannot be touched, seen, or felt before purchase. Marketing must focus on providing tangible cues, building trust, and showcasing the benefits and experience.
- Inseparability: Services are often produced and consumed simultaneously. The provider and customer are often present, and the quality of the interaction is crucial. Marketing needs to manage the customer experience and provider quality.
- Variability: Services are highly variable, depending on who provides them, when, where, and to whom. Marketing must focus on standardization, quality control, and training to reduce inconsistency.
- Perishability: Services cannot be stored for later sale or use. Unused capacity is lost revenue. Marketing may use pricing or promotion to manage demand to match capacity.
Goods, being tangible, can be inspected before purchase, separated from the producer, are more standardized, and can be stored.
How does marketing strategy differ for goods compared to services?
Marketing strategies adapt to the nature of the offering:
- Goods Marketing: Often emphasizes product features, quality, packaging, branding, and physical distribution. Marketing focuses on the traditional "4 Ps" (Product, Price, Place, Promotion).
- Service Marketing: Expands on the 4 Ps, adding "3 additional Ps" to address the unique characteristics of services: **People** (the staff who deliver the service), **Process** (how the service is delivered), and **Physical Evidence** (the environment and tangible cues associated with the service). Marketing focuses on managing the customer experience, building relationships, and ensuring consistent quality.
What is the market for factors of production vs. the market for goods and services?
These refer to two different types of markets in economics:
- Market for Factors of Production (or Factor Market): Where resources needed to produce goods and services are bought and sold. These factors include labor (wage market), capital (financial markets), land (real estate market), and entrepreneurship.
- Market for Goods and Services (or Product Market): Where finished goods and services are bought and sold by consumers and businesses. This is the market that goods marketing and service marketing are primarily concerned with, focusing on the exchange of final products or services for money.
