The Marketing Book 5th Edition

Wholesale Urgent A meal in Car Management

timber medical a restaurant repairs Consultancy

supplies

Goods

orientation

Service

orientation

592 The Marketing Book

Levitt (1972) argued that services contain many
important elements common to goods, thereby
making services marketing as a separate dis-
cipline obsolete:

... there is no such thing as service industries.
There are only industries where service compo-
nents are greater or less than those of other
industries.

On the other hand, many have pointed to the
distinctiveness of services, which makes the
application of traditional marketing principles
inappropriate. Examples of early work which
sought to define the nature of services are
provided by Gronroos (1978), Lovelock (1981),
and Shostack (1977).
It can be very difficult to distinguish
services from goods, for most products which
we buy are a combination of goods and
services. In this way, cars have traditionally
been considered examples of pure goods. How-
ever, today, most cars are sold with consider-
able service benefits, such as an extended
warranty, a maintenance contract or a financing
facility. In fact, many car manufacturers now
see themselves as service providers in which
lease contracts provide all the services neces-
sary to keep a car maintained, insured, financed
and replaced. The idea of a manufacturer
selling a tangible item (the car) and then not

having any dealings with the customer until

they are ready to replace the car is a rapidly

disappearing goods approach to the marketing

of cars.

Just as many pure goods may in reality be

quite service-like, so many apparently pure

services contain substantial goods elements. A

package holiday may seem like a pure service,

but it includes tangible elements in the form of

the airplane, the hotel room and transfer coach,

for example.

Pure goods and pure services are hypo-

thetical extremes, but which are nevertheless

important to note because they help to define

the distinctive characteristics of goods and

services marketing. In between the extremes is

a wide range of products which are a combina-

tion of tangible goods elements and intangible

service elements. It is therefore common to talk

about a goods–service continuum, along which

all products can be placed by reference to their

service or goods dominance. Rather than talk-

ing about the service sector as a homogeneous

group of activities, it would be more appro-

priate to talk about degrees of service orienta-

tion. In Figure 23.1, an attempt has been made

to place a sample of products on a scale

somewhere between being a pure service (no

tangible output) and a pure good (no intangible

service added to the tangible good).

Figure 23.1 An illustration of the goods–services continuum