Considering that services are often packaged as ‘products’ for reliability, consistency and scalability, and that effective product marketing involves personalised customer experiences— is there really a difference between marketing services and products, and should there be?

Before the 20th century, products were predominantly marketed based on features, benefits, quality and price to highlight their unique attributes, demonstrate their value, assure consumers of their reliability and position them competitively in the market. However, buying behaviour has since evolved to consider additional factors such as brand identity, sustainability, corporate social responsibility and customer experience —adding greater personalisation and variability, much like in service businesses. According to Vargo and Lusch, “all businesses are essentially service businesses.”¹

Balancing ‘standard and reliable’ with ‘personalised and customised’—for both services and products—enhances the overall customer experience and value delivery. Furthermore, looking beyond features to outcomes is where unique value is found.

The nuances of marketing services and products: the balance between personalisation and standardisation. 

Marketing products and services tends to involve different strategies due to their inherent characteristics.

Product marketing typically highlights attributes such as durability, functionality, quality, and design. Service marketing, however, tends to address aspects like trust, customer experience, and personalisation – often involving testimonials, service guarantees and the credentials of professionals delivering the offering to build confidence and manage customer expectations. 

While their characteristics differ, and marketers often follow different principles in their go-to-market strategies, the opportunities in their overlap should not be ignored. Balancing standardisation with customisation and personalisation – in both products and services marketing – enhances overall customer experience and value delivery.

At Hume Marketing Co., we also believe that regardless of the characteristics of the product or service, the real focus should be on why a target market would find value from the purchase – steering away from features and benefits to instead outcomes. When marketers ask, ‘why should someone choose this product or service over a competitor, and what value will they receive?’ the answer often reveals the unique value proposition. That is, what sets a brand apart from competitors.

‘All businesses are services businesses’ – the turning point for product delivery and marketing. 

Prior to the 20th century, marketing strategies were heavily focused on the functional aspects of products, such as their features, quality, and price. During this early period, brands were not as central to marketing efforts, and competition was primarily based on tangible product attributes.

As markets became increasingly competitive, the concept of branding emerged. Companies began to recognise that building a strong brand identity could offer a significant competitive advantage. This shift marked the emergence of brand management as a strategic discipline. Brands were seen not just as labels but as entities that could foster emotional connections with consumers, creating a sense of differentiation beyond mere product features.

In “From Product to Brand: The Evolution of Brand Management,” David Aaker introduced the concept of brand equity, which represents the value a brand adds to a product.² Strong brand equity allows companies to command premium prices, enhance customer loyalty, and secure a competitive edge in the market.

By the late 20th century, branding extended beyond individual products to encompass entire organisations (and their services). Companies recognised the need to create a consistent and compelling brand presence across all touch points.

Product marketing’s shift toward personalisation and a focus on customer experience remains pertinent today, even as traditional brick-and-mortar stores face decline due to the rise of online shopping and digitisation. For instance, Apple Stores exemplify this by maintaining physical locations where customers can interact with products and receive personalised assistance, even though much of their purchasing can be done online. This approach demonstrates the continued importance of brand affinity and experience.

Interestingly, despite the exponential growth of digital experiences, this emphasis on personalised experiences is also evident in the metaverse, where people seek immersive and tailored interactions with brands even in virtual environments.

Service businesses also offer ‘products’ to demonstrate standardisation and reliability – what are the implications?

Many service businesses opt to package their services as ‘products’ to emphasise the standard, reliable nature of the service and to more easily serve their target market.

For example, funds management firms often package their investment options as products, even though the core offering is the service provided by the portfolio manager. This approach positions the investment funds as delivering consistent returns in what can be an unpredictable, volatile stock market, for example. Though even in this instance, prospective investors often evaluate the credentials of the portfolio managers such as tenure, testimonials and their historical performance, before opting to invest. This demonstrates that in both cases – products and services – effective marketing involves a balance of standardisation and personalisation.

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Balancing the personalised with the standardised involves going beyond simply features, benefits, quality, and price to instead understanding how a product or service is delivered in a way that will delight buyers.

This “delivery” could encompass providing an exceptional customer experience and exceeding expectations, building trust and reliability, cultivating a brand that buyers have an affinity with or a business that contributes positively to its operational environment. Above all, focusing on the ‘why’ and outcomes—specifically, how value will be delivered— instead of solely product or service characteristics is key. Especially as markets become increasingly oversaturated and offerings easily replicated. In such environments, distinguishing offerings through meaningful value and authentic engagement becomes essential for growth and cultivating sustainable brand loyalty and advocacy.

References:

1. Vargo, S. L., & Lusch, R. F. (2008). Are Services Marketing and the Marketing of Products Different?
2. Aaker, D. A. (n.d.). From Product to Brand: The Evolution of Brand Management. David Aaker explores how brand management evolved throughout the 20th century, highlighting the increasing importance of brand identity.