Let us consider the examples of mobile phones, laptops, and other electronic gadgets for a second that are currently a huge part of our existence. These items come under a specific category of products known as electronic goods.
These electronic products are sold by gadget manufacturing companies such as Vivo, Samsung, Apple or Oppo amongst others.
Now, imagine you have recently made a purchase from Samsung and you found that your brand new gadget has a flaw. In this case, who would you consult to fix the problem?
Samsung right? So there you go, the same electronic product based company is offering you gadgets as well as services for repairing and maintenance of the gadget.
This is the major difference between product and service based companies. One offers products while the other offers services for those products.
Find a more detailed discussion on this topic further in the blog!
What is a Product Based Company?
Suggestively by the name, the product based companies are ones that focus on production of goods for their customers and targeted audiences.
For instance, consider a smartphone brand that launches a new product annually. It takes the analysis from customer reviews and curates the smartphones based on the features their customers and loyal buyers would like to use in the future.
This is what distinguishes a product based company from a service based company. A product based company is only focused on producing high-end products and managing the sales of their brand.
Some examples of high-end product based companies that are performing really well in the current global scenario are:
Adobe
HP
Microsoft
Amazon
Infosys
What is a Service Based Company?
Service is a more modified version of the term help. Hence, a service based company offers help in exchange for monetary transactions for tasks that their customers cannot perform on their own.
If we further iterate on the example of a smartphone brand, we can look at the flip side of the coin where they provide customer based services for the products that they release in the market.
From repairing to maintenance, a smartphone brand can also afford to provide services, hence making it a service based company as well.
Here are a few examples of service based companies that are currently operating in the global scenario:
Wipro
TCS
Accenture
Vodafone
Airtel
What are the differences between a product and a service based company?
From the time taken for turnaround to salary of their employees, product based companies and service based companies do share a significant amount of differences.
With that said, let's have a look at a few of them.
On the basis of definition
The main focus of a product based company is to meet the needs of their customers and to make sure that they are satisfied with the type of products they are putting out in the market.
A service based company on the other hand is not quite literally the opposite of a product based company but, you can certainly say that the products produced by a service based company are more apparitional in nature meaning that they do not have a physical shape.
On the basis of priorities
For the product based companies, their main focus and priority is the quality of their products. The better the products, the more customers will be eager to invest in the company.
In the context of the service based companies, their main priority lies in the marketing of their services and their clients who trust them for the quality of services that they provide.
On the basis of tangibility of goods/services
The products sold by the product based companies can be acquired by the customers and these commodities are tangible in nature, meaning they have a physical shape and form.
Since the service based companies only provide services, we cannot physically touch their services but, we can certainly benefit from them in other forms.
On the basis of the hiring process
Product based companies only focus on hiring the top employees across the world so that they can efficientl put their minds into designing better products for their brands.
The service sector is oversaturated with employees since there is always space for customer care providers. Hence, in the context of these companies, they follow the rule of “the more the merrier”.
On the basis of the learning curve
If you work for a product based company, you will not be performing the same task time and again. Meaning that you will certainly learn by experience within the course of your job.
The main task of a customer care service provider is to consult the clients and resolve their issues based on the products offered by the company that they are currently working for. This basically means that there is an average learning curve for the employees of these companies.
On the basis of working hours
For the product based companies, the employees often do not work in shifts especially people who work in higher positions within the company. On that note, for a person working in a product based company, they can enjoy flexible working hours during the process of manufacturing.
Service sector employees on the other hand have a fixed schedule since they have to follow a strict time schedule. This is because, a service sector company often recruits a large number of employees hence it becomes extremely important to allocate them a specific time schedule for working.
On the basis of marketing
Since the whole USP of a product based company is their products, it is important for such companies to invest in marketing and advertising as much as possible.
On the other hand, since the service based companies contact their clients and customers on a regular basis, they do not require marketing their services as often as their correspondents.
Final Thoughts
Growth is always a learning curve, regardless of whether you are working for a product based company or a service sector company!
For people who desire to enjoy the benefits of working for both, you can join tech based companies since they effectively provide both products as well as services for the products.
And finally, for the aspirants of tech corporations, find aptitude topics for placements in our other blogs and start preparing today!
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