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02/25/2008

A New Definition of Services

In thinking about services marketing, I often return to this 2004 paper by Lovelock and Gummesson. It argues that we need a new definition of what a service is.

The old definition, found in most marketing texts, is that a service is an intangible good. It is consumed at the same time it is delivered. It is fleeting--remembered as an experience. It is different every time it is delivered. It is different from a physical product.

The new definition, the authors suggest, is that a service entitles the purchaser to access a particular physical resource for a period of time. So, Hertz hires out a car, Deloitte a partner, Verizon a piece of its network.

Today, manufacturers increasingly use services to differentiate their goods. Services companies launch products. It is often a challenge for a company culture built around building physical things to market intangible things (and vice versa). For this reason alone, perceiving service as "rental" can help to clarify relationships between what previously have been characterized as two ends of a spectrum: from tangible to intangible.

Later this week, I'll take a look at the implications of this way of thinking about services for services marketing and branding

February 25, 2008 in Discipline of marketing | Permalink

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