We will not go into the economic mumbo-jumbo, but let’s define the terms:
- Goods are material objects for sale that can be owned, held in hands before use, etc.
- Product is a tangible (merchandise, box, package) or intangible (website, program, service) object that meets the needs of the client. It can be both for sale and “free” for the end user.
- Service – mass services to the public or performing some work tasks for someone.
In order not to get confused, it is necessary to determine exactly what kind of “product” we are creating. A tangible product, like goods, requires physical delivery, and a virtual service is very similar to a one-time intangible service. But these are all different types of products. They significantly differ from each other in production, and in consumption, and most importantly in making money!
If the tangible material (composition, components, consumables) is present in your product, it means, in addition to manufacturing in sufficient quantities, you also need logistics (delivery, return, warehouses). Most likely, the weak link of your business will be in a compromise: expensive delivery or produce many times more than needed to fill stores and warehouses.
Intangible product is easy to deliver around the world, but each country has its own language, rules and laws. That means that at the very least there will be a need for localization (translation of the interface, documentation) of the product under the most common languages. The same applies to support services.
A service is different from a one-time service, in that the performance of the service must be guaranteed at least during the working hours of your client. Different laws and cultural characteristics require major changes in business processes depending on the territory. A simple translation into the client’s language may not be enough; some parts of the service will have to be redone completely. And it may even be necessary to make a separate product in order to be competitive on the local market.
What is it all about? So that you can determine exactly what part of the created “product” is really its core and what you need to focus on. You can also determine which parts of the product, business processes, related services can be given “on the side”.
In business, it is possible (and sometimes necessary) to outsource any process other than actual money making.