Microsoft Word Volume 2 Service and Service Quality Final docx

Figure 3: Customer contact (Mersha, 1990)
 
Passive contact 
 
A
c
ti
ve
 c
o
nt
ac
t 
low high 
high 

Health care centres

Psychiatric services 

Dental services

Hospital inpatient care 

Restaurants

Schools 
low 

Data processing 

Catalogue merchandising 

Home offices of banks & 
insurance companies 

Hotels/Motels 

Public transportation 

Resort 

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Business Service Management White Paper - Volume 2 
Page 15 of 46 
Lovelock (1983) believed that if classification schemes ‘are to have managerial value they must offer 
strategic insights’ (p.10). He classified services in order to aid their marketing efforts. His 
classifications were aimed at assisting managers to ‘
obtain a better understanding of the nature of the 
service act, of the types of relationships their service organizations have with customers, of the room 
for customisation and judgement, of the factors underlying any sharp variations in demand and 
supply, and of the characteristics of their service delivery systems. This understanding should help 
them identify how these factors shape marketing problems and opportunities and thereby affect the 
nature of the marketing task. Second, by recognizing which characteristics their own service shares 
with other services, often in seemingly unrelated industries, managers will learn to look beyond their 
immediate competitors for new ideas as to how to resolve marketing problems that they share in 
common with firms in other service industries
’ (p. 19). 
We next consider two of Lovelock’s classification schemes in more detail: the nature of the service 
act, and the type of customer relationship. For the nature of the service act, Lovelock identifies two 
fundamental dimensions: (a) at whom (or what) is the service act directed and (b) is the act tangible or 
intangible in nature? This results in a four-way classification scheme (Figure ) involving services 
directed at (1) people’s bodies, (2) people’s minds, (3) tangible assets and (4) intangible assets. This 
classification helps address questions like does the customer need to be physically present, does the 
customer need to be mentally present, and in what way is the target of the service act modified. 
For the type of customer relationship, Lovelock identifies two fundamental issues: (a) how is the 
service delivered (discrete or continuous) and b) does this require a membership? This results in a 
four-way classification scheme (Figure). One of the major advantages of membership is that the 
service provider knows who its current customers are and, mostly, how they use the service. A major 
difference between continuous and discrete services is often in their pricing.