Service and Product Management

Before I dive into service management topic, I want to dedicate a part of this article to the age old subject of commodity, goods or service and their differentiation and product management. I am sure you have all heard about the coffee bean analogy, but it is worth reading and hearing again. 

Commodity is the raw material that a company uses for making goods. So the coffee is harvested and then sold based on price per pound. At this point coffee is considered to be a commodity.

Goods are tangible material that companies keep an inventory of. So now the commodity - coffee in this case - is grounded, packaged and shipped to the store to be sold at a higher price. At this point, the commodity has become a “good”.

 

Services are specific activities someone performs because the consumer does not want to do it themselves. Services are not tangible so to speak, and they are customized based on consumer needs.  So then going back to the coffee, the same ground up coffee that was shipped to the store, now can be brewed in a coffee shop, street corner or a gas station and will be priced as service.

So depending on where you stand a single coffee bean can be a commodity, a good, or a service. Product management is about being aware that it is the distinctive experience that increases the value of the product.  Product marketers understand that it is all about consumer experience, hence all the fuss that goes into packaging and advertisement.

 

Having said that, product management and service management share a common objective. The only subtle difference is that service management was designed only around service. Service management is also about client or consumer experience and must understand what attributes to target for excellence and keep the needs of client in mind quite heavily.

 

The path to operational excellence - not far from our everyday lives - is understanding. We need to analyze and target our resources in designing and applying improvements where there is maximum effect. Last but not least, let's not forget the 4 E’s: Expectation, Encounter, Experience, and Emotions.

 

All the Best.