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A product is a tangible good that a customer can see, touch, feel, try on, taste or otherwise use. It can be measured and counted where as a service is intangible -- something a customer experiences but doesn't hold or retain. It is less concrete and is the result of the application of skills and expertise towards an identified need. At either extreme of the business world, you have companies that are entirely product sellers and companies that market only services.
The characteristics that differentiate the two are as follows:
1) Tangibility
As already mentioned, a product is tangible. Items such as packaging and presentation may compel a customer to purchase a product. Services, on the other hand, are not tangible, which can make them more difficult to promote and sell than a product.
2) Relationship and Value
Products tend to fill a customer's need or want, so companies can use this to sell a product. A service is more about selling a relationship and the value of the relationship between the buyer and seller of the service. For example, a car is something a buyer can touch and see as well as use. A service, such as lifestyle coaching, for example, is not tangible. Therefore, the client needs to perceive the value of the service, which can be harder to get across.
3) One Versus Many
Marketing products tends to involve multiple products that make up the line. For example, cleaning product manufacturers tend to market not just one cleaning product. Instead, they have a line of cleaning products to serve the various needs of their customers. Services, on the other hand, typically have a single option. It can be harder to promote and sell the reputation of one single service over the benefits of many different products.
4) Comparing Quality
Measuring the quality of a product is easier than measuring that of a service. If a customer buys a cleaning product to clean the kitchen sink and it doesn’t do the job, the customer knows the value of the product is zero. On the other hand, it is harder to measure the quality of a service.
5) Return Factor - If a customer purchases a product and it doesn’t work as it is supposed to, the customer can return the product for her money back or at least to receive a store credit. A service is consumed as it is offered, so it lacks the return factor that a product has. Some service providers overcome this by offering money-back guarantees.
I am sure you are aware of the marketing mix for product marketing - the4Ps. Product, Price, Promotion and Place. When it comes to service, there are7Ps to market a service. The first four are the same as the traditional marketing mix and the three additional Ps are People, Process and Physical evidence.
People
People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. Consequently, customer service training for staff has become a top priority for many organizations today.
Process
The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blueprint which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.
Physical Evidence
Since services are intangible in nature, most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. For eg. Many restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests
The primary difference is that a product is a tangible offering.
The main characteristics of service that differentiate from product is that the product packaging and presentaion attractions to and from advertistments and products logistic availability.
