Book service marketing
Chapter 1
Lovelock’s classification of services
Classifies services into four broad categories from a process perspective relating to whether
the service performance was enacted on a person or their possessions and the extent to
which performance was more or less tangible. Although the categories share similar process-
related characteristics, they also have distinctive implications for marketing, operations and
HRM.
Tangible actions à People as recipients
- Service directed at people’s bodies
- Passenger Transportation
- Healthcare
- Spa treatment
Tangible actions à Possessions as recipients
- Services directed at people
- Tangible possessions
- Courier services
- Car repair
- Laundry and Dry cleaning
Intangible actions à People as recipients
- Services directed at people’s minds
- Education
- Entertainment
- Psychotherapy
Intangible actions à Possessions as recipients
- Services directed at intangible
- Assets/possessions
- Accounting
- Banking
- Legal services
A definition of services
All economic activities whose output is not a physical product or construction, is generally
consumed at the time it is produced, and provides added value in forms (such as
convenience, amusement, timeliness, comfort or health) that are essentially intangible
concerns of its first purchaser.
Services directed at people’s bodies
Services in this category require the recipient to be physically present within the service
system. You need to sit on the train visit the dentist, lie on the massage table in order to
receive the service.
It is possible that the service provider will come to you. For example, a haircut at home.
,Services directed at people’s tangible possessions
Services that do not require the customer to be present when the service is being delivered,
although they may need to be present at the start and end of the service. For example,
when dropping off and collecting a car from a repair centre.
Services directed at people’s minds
Services such as education, the arts, professional advice and news. Although customers may
go to physical premises such as universities and theatres, these premises may not be needed
as technology such as the internet and other broadcasting technologies can deliver the
service at a distance without the customer being present in the place where the service is
produced.
Services directed at people’s intangible possessions
Services such as banking, insurance and accounting can be delivered with very little direct
interaction between the customer and the organization. The processing of transactions on
your bank account may be fully automated and may be undertaken in a location that is
distant from the customer.
Tangibility spectrum
The broad definition of services implies that intangibility is a key determinant of whether an
offering is a service. Although this is true, it is also true that very few products are purely
intangible or totally tangible. Instead, services tend to be more intangible than
manufactured products, and manufactured products tend to be more tangible than services.
The tangibility spectrum shows de difference between tangible dominant products and
services and intangible dominant products and services
Service dominant logic
Is another way to look at what service means. All products and physical goods are valued for
the service they provide. This statement suggest that the value derived from physical goods
is really the service provided by the good, not the good itself. For example, a pharmaceutical
product provides medical services, a razor provides shaving services and computers provide
information and data services,
The thinking behind service dominant logic is that value is not something that is simply
created and delivered to the customer; the value is co-created in a process that requires the
active participation of the producer, its customers and possibly other stakeholders (of the
producer and the customer).
To fully understand service dominant logic, it is also important to consider the role of
interaction in creating value.
Service dominant logic moves thinking away from the fallacy that products are different
from services because they only create value in a linear, sequential creation, exchange and
consumption set of stages. Instead it puts forward a much more complex and dynamic
system of stakeholders, communications and technology that creates value and the context
in which it is obtained.
,Service industries, services as products, service as experiences and customer service.
However broad or narrow we define a service, it is important at this point to draw
distinctions between service industries and companies, service as products, services as
experiences and customer services. Sometimes when people think of a service, they think
only of customer service, but service can be divided into four distinct categories.
1. Services industries and companies
Include those industries and companies typically classified within the service sector whose
core product is a service.
2. Service as a product
Represent a wide range of intangible product offerings that customers value and pay for in
the marketplace.
3. Services as experiences
The term ‘experience economy’ was first described in an article in 1998. The article argued
that service companies would evolve from simply providing a service to creating memorable
events for their customers, with the memory of the experience becoming the product.
4. Customer service
A critical aspect of what we mean by ‘service’. Customer service is the service provided in
support of a company’s core products. Companies typically do not charge for customer
service.
Service and technology
Technology and especially information technology is currently shaping the field and
profoundly influencing the practice of service marketing.
New ways to deliver service
Companies have moved from face-to-face service to telephone-based service to widespread
use of interactive voice response systems to internet-based customer service and now to
mobile service. Many companies are coming full circle now and offer human contact as the
ultimate form of customer service.
Enabling both customers and employees
Technology enables both customers and employees to be more effective in getting and
providing service. Through self-service technologies, customers can serve themselves more
effectively.
Example: Via online banking, customers can access their accounts, check balances, apply for
loans, all without the assistance of the bank’s employee.
Internet is a service
Customers want what they have always wanted: dependable outcomes, easy access,
responsive systems, flexibility, apologies and compensations when thing go wrong. But now
, they expect these same outcomes from technology-based businesses and from e-commerce
solutions.
Characteristics of service impacting on marketing activities
The table summarizes the traditional view of the differences between goods and services
and the implications of these characteristics. It has been suggested that these distinctive
characteristics should not be viewed as unique to services but that they are also relevant to
goods, as all products are simply tools or objects used to provide a service to the customer
and that economic exchange is fundamentally about service provision.
Goods Services Result implication
Tangible Intangible - Services cannot be inventoried
- Services cannot be easily patented
- Services cannot be readily displayed or
communicated
- Pricing is difficult
Standardized Heterogeneous - Service delivery and customer
satisfaction depend on employee and
customer actions
- Service quality depends on many
uncontrollable factors
- There is no sure knowledge that the
service delivered matches what was
planned and promoted.
Production Inseparability – - Customers participate in and affect
separate simultaneous production transaction
from and consumption - Customers affect each other
consumption - Employees affect the service outcome
- Decentralization may be essential
- Mass production is difficult
Non- Perishable - It is difficult to synchronize supply and
perishable demand with services
- Services cannot be returned or resold
The importance of understanding these differences can be explained as follows.
1. The identification of these characteristics provided the impetus and legitimacy
necessary to launch the new field of services marketing and the related academic
research.
2. The characteristics identified enabled service researchers to recognize that achieving
quality in manufacturing requires a different approach to that required for a service
quality improvement.
3. Each of the characteristics taken separately or in combination continues to inform
research and management in specific service industries, categories and situations.
