- Trending Categories
Data Structure
Networking
RDBMS
Operating System
Java
MS Excel
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
Physics
Chemistry
Biology
Mathematics
English
Economics
Psychology
Social Studies
Fashion Studies
Legal Studies
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
Difference Between Product-Based and Service-Based Companies
Companies are of many types but the two main types are product-based and service-based. Product-based companies sell different types of products while service-based companies sell different types of services. There are companies that sell both products and services. In this article, we will see the difference between product-based and service-based companies.
What are Product Based Companies?
Product-based companies are the ones that are responsible for manufacturing and selling different types of physical products which can be groceries, electronic items, fashionable items, and many more. Companies have to meet the requirements of their customers on the basis of their feedback. These companies also have to manage a storage space to keep their inventories. They have to check continuously about the popularity of products and manage the inventories accordingly. Here is the list of some of the product-based companies −
- Amazon
- HP
- Adobe
- Intel
- CISCO
What are Service-Based Companies?
Service-based companies are responsible for providing different kinds of services to their customers. These companies provide their services to other organizations or deal with client-based products. The service providers need to have the knowledge of the service that they have to provide. They may have to repair an air conditioner or gas stove or they may have to paint a house and many more such jobs. These companies need to have trained and skilled workers who can provide the service.
Difference between Product Based and Services Based Companies
There are many differences between product-based and service-based companies and these differences can be found in the table below −
| Product Based Company | Service Based Company |
|---|---|
| Product-based companies deal in selling physical products. | Service-based companies deal in providing different types of services. |
| The companies have to manage inventory which consists of stock of different products. | Inventory management is not required in service-based companies. |
| Sales of products are the way which companies use to earn income. | Service provision is the basis which companies use to earn revenue. |
| Product manufacturing processes are required. | No such process is required. |
| Product-based companies need to have a godown or a storage space where they can store their inventories. | No physical space is required to store anything. |
| Companies have to find ways to deliver the physical products to the customers. | Service-based companies deliver the services through their site or remotely. |
| Products delivered by these companies can be touched physically and customers can check their quality and quantity. | Services can only be experienced but they cannot be touched physically. |
| Aftersales support may be required if any problem occurs in the product. | No aftersales service is required as services are intangible. |
| Product-based companies have to hire a limited number of employees who belong to IT. Such candidates just have to complete their graduation. | These companies arrange campus interviews to select the best candidates to provide the services. |
| Individuals who join these companies get high salaries and the increment is also very high. | The salaries and increments provided to individuals in service-based companies are less than product-based companies. |
| Individuals have to crack the interviews which is very difficult. | The recruitment process is easy in service-based companies. |
| Individuals in product-based companies get a chance to learn many things. They also get the opportunities to work on the latest technologies. | The learning experience of the individuals working in service-based companies is less. Usually, inexperienced people are employed who do not get a chance to choose their career. |
| Employees have to complete their work in the given time. | Office timings are strict and employees have to work for 7 to 9 hours. |
| Individuals work in product-based companies because of high job security. | Job security is low and there are chances of losing a job easily. |
| Product-based companies have to make investments in advertising and marketing. | The service-based companies are in direct touch with their customers so investment in marketing and advertising is very low. |
Conclusion
There are many companies in the market that sell different types of products and services. That is the reason they are divided into product-based and service-based companies. The product-based companies sell different types of physical products. Customers have to come to the store or they can order the products online. Product-based companies have to manage the inventory so that stock of all the products is available. Service-based companies provide different types of services. They are in touch with other companies and clients to provide service.
FAQ on Product-Based Companies Vs. Service Based Companies
1. Which type of companies have to manage inventories?
Product-based companies have to manage inventories as they have to sell different types of products. Inventory management is needed so that none of the products go out of stock. These companies always want to have in stock the products that are popular among the customers.
2. Which type of companies need advertising and marketing?
Product-based companies need advertising and marketing as they have to tell the customers about new launches, discounts, exchange offers, etc. Service-based companies are in direct contact with the clients so there is no need for marketing and advertising.
3. Which type of companies have to provide after-sales service?
Product-based companies have to provide after-sales service so that if a client complains about a product, the problem can be remedied immediately or as soon as possible.
4. Which type of companies give high salaries to their employees?
Product-based companies provide high salaries to their employees. The increment is also high and the job is secure. Salary is comparatively less in service-based companies and there is no job security.
5. In which type of companies, the recruitment process is difficult?
The recruitment process is difficult in product-based companies while it is easy in the serviced based counterparts.
Views
