The marketing of services 587
became the norm, relationships emerged as a
source of competitive advantage. Many car
companies introduced relationship-based pro-
grammes, which provided customers with
ongoing finance, maintenance and renewal
facilities.
More recently, some commentators have
pointed to experiencesas a post-service form of
differentiation. Pine and Gilmore (1999) used
the example of a birthday cake to illustrate how
this product has progressed from a tangible
collection of ingredients, through ready mixed
ingredients, cakes made to order and delivered
to the home (service-based differentiation), and
ultimately to an outsourced party which pro-
vides an experience (e.g. celebration) of which
the cake and delivery service have shifted from
dominant elements to merely a supporting
role.
Services and consumer value
While marketing remained focused on tangible
products, value could be assessed with respect
to readily observable benchmarks; for example,
the value of pure commodity materials such as
heating oil, natural gas and coal could be
measured by reference to the units of calorific
value obtained by the buyer per unit of
expenditure. Value could be objectively
assessed in the sense that an external observer
of a transaction would be able to deduce the
existence of a similar level of value.
The introduction of a significant service
element to a product offer reduces the power of
tangible benchmarks to explain value. There is
now a widespread literature which recognizes
that services can only be defined in the minds
of consumers (e.g. Holbrook, 1995; Oliver,
1999). Considerable research has therefore
sought to establish the nature of expectations
which consumers develop prior to consump-
tion of a service, and which act as a reference
against which service delivery is assessed
(Parasuramanet al., 1985).
With the augmentation of services, a link
between quality and value becomes more diffi-
cult to establish. Quality has been defined as
‘conforming to requirements’ (Crosby, 1984).
This implies that organizations must establish
customers’ requirements and specifications.
Once established, the quality goal of the vari-
ous functions of an organization is to comply
with these specifications. However, the ques-
tions remain: whose requirements and whose
specifications? A second series of definitions
therefore state that quality is all about fitness
for use (Juran, 1982), a definition based prima-
rily on satisfying customers’ needs. If quality is
defined as the extent to which a service meets
customers’ requirements, the problem remains
of identifying just what those requirements are.
Service quality is a highly abstract construct.
Many analyses of service quality have attemp-
ted to distinguish between objective measures
of quality and other measures which are based
on the more subjective perceptions of custom-
ers. Gronroos (1984), for example, identified
‘technical’ and ‘functional’ quality respectively
as being the two principle components of
quality. While tangible products allow con-
sumers to ‘see and believe’, services require
them to ‘imagine and believe’. In the buying
process for services, quality is much more
difficult to assess prior to purchase than is the
case for goods.
It was noted earlier that there has been
recent comment that ‘experience’ has sup-
planted tangible product qualities, service and
intangible relationship benefits as a means of
adding differential value to a product offer. The
centrality of experience to defining value was
noted by Holbrook (1999, p. 5), who defined
consumer value as an ‘interactive, relativistic
preference experience’. There has been excited
speculation that we are moving to an experi-
ence-based economy (Pine and Gilmore, 1999),
in which we place increasing value in satisfying
higher order needs through experiences. The
proliferation of stylish coffee shops and themed
restaurants provides some evidence to support
this argument. However, evidence of a general