Wednesday, 11 July 2007

Service -vs- Product

I think it's fair to say that in the battle of services and products... services are winning.

Now anyone with a slight fondness of marketing is yelling the words iPod/Phone at their screen right now I'm sure, but I'll deal with that later.

More money than ever is being spent on convenience. Food is the obvious example of this, where 30-40 years ago, going out for dinner was a treat... in many households, it is the norm now.

However the growth of services is not exclusive to food. A recent trend in the city is the hiring of dog walkers. People are so busy they can't take 10 minutes out to walk the dog and will pay a premium to ensure that ruffles is taken care of.

However, food typifies the trend for me though, and here's why:

  1. You're still selling a good, and people still think they're buying a good
  2. Without you providing the service aspect, no one would buy
I think most services being sold now are not exclusively services (like dog walking) but more like food with the augmentation of the core benefit (how's it's served, who serves it, where it's served).

Clothing is one of the biggest players in this right now. Consumers know that the hats/pants/shirts they buy are only worth 5 dollars at most, but they will pay the market price for location, convenience, selection, customer service, and most importantly.... the brand.

How is a brand a service? It's a pretty "rough draft" thought in my mind... but the service you're providing is adjustment/stabilization of state of mind. Your brand can induce a feeling of prestige, comfort, or reliability... and if you've created a brand where individuals are no longer concerned so much about the product, aren't you really selling a service now?

So does the iPod sell, or does the idea of having the best MP3 player out there sell?

Did the iPhone go flying off the shelf? I think it's far more likely that most of the people who purchased the product, had little interest in what the phone can actually do. Instead, these people had a great interest in having the prestige that goes along with having the (perceived) best phone available, or having the latest, overpriced, apple gadget.


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