Service Management and Marketing: Managing the Service Profit Logic, 4th Edition

CHAPTER 2THE NATURE OF SERVICE AND SERVICE CONSUMPTION, AND ITS CUSTOMER MANAGEMENT IMPLICATIONS

“Goods and services merge – but on the conditions of service.”

INTRODUCTION

In this chapter the nature and characteristics of service are discussed. The consequences of the process of how service is consumed and used as well as the difference between process consumption and outcome consumption are also covered. Finally, the implications of process consumption, which characterizes service and the content and scope of marketing, are described. After having read this chapter the reader should understand the nature of service and of service consumption as compared to the consumption or use of physical products, as well as the scope and content of marketing in service contexts compared to goods marketing. The reader should also understand what main sources of competitive advantage exist for service businesses.

WHAT IS A SERVICE? AN ATTEMPT TO DEFINE THE PHENOMENON

A service is a complicated phenomenon. The word has many meanings, ranging from personal service to service as a product or offering. The term can be even broader in scope. A machine, or almost any physical product, can be turned into service to a customer if the seller makes efforts to tailor the solution to meet the most detailed demands of that customer. By adopting a service logic a firm can turn any resource into service for customers. A machine is still a physical good, of course, but the way of treating the customer with ...