Product Based Company Vs Service Based Company

Product Based Company Vs Service Based Company

The most arduous choices are to the questions which tend to bring major life changing decisions. For a fresher, it can be about choosing just the right firm to work for, as a job or as an entrepreneur. No one will ever bear the brunt of your failure and hence, making right choice plays a very pivotal role in garnering the relevant work experience in one’s desired career. There are basically two types of companies that is product based and service based. In order to make an informed decision, you should have a complete and clear understanding of the type of work that both the companies do. You should also have a clear picture of what they look for in the candidates while hiring, what the job security is in the field, what the market scope is and of course, the pay packages in product based companies and service based companies. To clear all your confusion, we have written down this article for you wherein we have stated the major differences In both. In this article, we will also clearly tell you the perks and downsides of working in product based companies or service based companies. But first, let us know what exactly they are.


Product based companies are companies that create products such as Oracle and Adobe Photoshop. They usually sell their product to as many clients as possible all over the world. More often than not, the product based companies sell a thing that is tangible.


The products or services that are offered by a service based company are usually exclusive as well as customized to suit the specific needs and requirements of their clients. Those are services that would not be shared with other clients. Basically, service based companies offer services that are not usually tangible.


In a service based company, client is considered as the King because such companies want their customers to be happy and completely satisfied with the product or service offered. On the other hand, in a product based company, quality is king as they want the product to be of top quality so that more people will start consuming it which will lead to an increase in sales.

For example, a soft skill training class offers training to students and professionals and helps them pick up new skills. The service offered in this particular case is not tangible. Service based companies such as TCS and Wipro usually use products like Oracle, Photoshop and Premier Pro that is made by product based companies to serve various purposes.


Below mentioned are points on the basis of which we have highlighted major differences between both the companies as well as examples that can better help you understand which one you should choose.

Hiring Candidates

Product based companies usually hire candidates that have really strong domain knowledge. They look for candidates who are familiar with the latest tools and technologies. Communication skills do not really matter much when it comes to recruitment process and this only means that you need not have to number one in selling the product. However, you should be fluent enough to convey your thoughts and ideas effectively.

When it comes to service based company, your communication skills will be as imperative as your technical knowledge is. Sometimes you will also be expected to have extremely good marketing as well as interpersonal skills to be hired for a role in a service based company. The way you dress up and they way you present yourself will decide if you will get the job or not. For a service based company, you will be providing services to customers and hence, all these things really matter in delivering excellent service to customers.

Economic Growth

If we analyse the data from the last few years, it is apparent that there has been a gradual shift from manufacturing to service economy. This just means that product based companies are undoubtedly important but service based company are dominating in today's time. A company that sells average products with excellent support can outshine a company that sells excellent product with average service.

Job Security and Work Pressure

If we consider data from various surveys, job security is usually higher in the product based companies when compared to that of in service based companies. However, an employee in a service based company feels much more pressurized because of the tight deadlines as well as targets. Nowadays, service companies tend to hire in large numbers and after the training period, most of the hired candidates are benched for several months and this is why job security is less in service based companies.

Target Market

When it comes to target market in marketing strategy, both Product based companies and service based companies target different markets. Product based companies can market and sell their products to the global market easily. On the other hand, service based companies usually cater to the local market. For instance, an electronics store can deliver its products to any place in the world but a electrician cannot travel far from company everyday. There could be a few exceptions to this but this is how it is generally.


We hope that this article gave you the answer to all your questions and now you are pretty much clear about the differences in both. For any more doubts, feel free to get in touch with our software development company.

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