Journal Article Proposes New Way of Looking at Services
For
25 years, the academic field of services has been based on the paradigm
that all services share four unique characteristics—intangibility,
heterogeneity (or variability), inseparability of production and consumption
(or simultaneity), and perishability—that make them distinctively
different from goods. In an article entitled “Whither Services Marketing?
In Search of New Paradigm and Fresh Perspectives” in the August
2004 issue of the Journal of Service Research, Insert Cover of JSR (journal
No caption ) Professor Lovelock and his co-author, Professor Evert Gummesson
of Stockholm University, challenge received wisdom and demonstrate that
there are far too many exceptions to justify the continued existence of
this paradigm. The distinguishing characteristic of services, they argue,
is that no transfer of ownership takes place, but value is created through
rental and access. The old paradigm has been undermined by such factors
as:
- advancements in automation (such as increasingly sophisticated ATMs and Web-enabled self-service)
- new developments in electronic technology (especially the Internet and digital storage of intellectual property that allows unlimited and easily accessible replication of original performances in fields ranging from education to entertainment and the performing arts);
- a strategy of outsourcing of tasks by both corporations and time-poor but affluent consumers who prefer to pay a specialist provider to perform services without their own active participation;
- a shift from the use of human labor to the use of machines; and a resulting trend toward standardization of the service “product” that owes much to the study and refinement of service quality procedures.
Instead of talking about services vs. goods, argue Lovelock and Gummesson, we should be talking about the distinction between ownership and non-ownership. This is not a new idea, they point out, two early service researchers suggested it in 1964 and 1974, but their ideas went ignored. In the case of physical products, customers can obtain desired benefits either by buying the item themselves or renting it. We call the latter a service, know it well in such instances as using taxis (where we rent a driver, too) and rental cars. (Leasing with option to buy, time sharing, or fractional ownership of a substitutable product constitute a gray area that merits further study debate.) The Yellow Pages is full of listings for such diverse rental options as construction equipment, formal wear, party tents, and power tools. Most service industries are built around a combination of renting access to physical facilities (e.g., museums) or discrete items (e,g, beds) and access to needed labor or expertise, usually in combination and often in complex permutations.
Describing various ways of categorizing this non-ownership perspective,
Lovelock and Gummesson offer a new lens to examine service phenomena,
a perspective they hope will become accepted as the “Rental/Access
Paradigm.” Their article suggests important managerial insights.
Enthusiastically received by many academics, their article has already
caused quite a stir.
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Last Updated 2005-03-29