Microsoft Word Volume 2 Service and Service Quality Final docx

Figure 4: Nature of the service act (adapted from Lovelock, 1983) 
 
 
Who or what is the direct recipient of the service? 
 
People Things 
What is the nature 
of the service 
act? 
Tangible 
actions 
Services directed at people’s 
bodies: 

Health care 

Passenger transportation 

Beauty salons 

Exercise clinics 

Restaurants 

Haircutting 
Services directed at goods and 
other physical possessions: 

Freight transportation 

Industrial equipment repair 
and maintenance

Laundry and dry cleaning 

Land scaping/lawn care 

Veterinary care 
Intangible 
actions 
Services directed at people’s 
minds: 

Education 

Broadcasting 

Information Services 

Theatres 

Museums 
Services directed at intangible 
assets:

Banking 

Legal Services 

Accounting 

Securities 

Insurances 

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Business Service Management White Paper - Volume 2 
Page 16 of 46 
Figure 5: Type of customer relationship (adapted from Lovelock, 1983)
 
 
Type of relationship between the service organisation
and its customers? 
 
‘Membership’ 
No formal relationship 
Nature of service 
delivery? 
Continuous 
delivery of 
service 

Insurance 

Telephone subscription 

College enrolment 

Banking 

American Automobile 
Association 

Radio station 

Police protection 

Lighthouse 

Public highway 
Discrete 
transactions 

Long-distance phone calls 

Theatre series subscriptions 

Commuter ticket or transit 
pass 

Car rental

Mail service 

Toll highway 

Pat phone 

Movie theatre 

Public transportation 

Restaurant 
Shostack (1987) considered that ‘every service could be analysed according to its overall complexity 
and divergence’ (Figure ). A service’s complexity is determined by analysing the number and intricacy 
of the steps required to perform it. Divergence relates to the latitude for variability - a highly divergent 
service would be one in which virtually every performance of the process is unique while a service of 
low divergence would be one that is largely standardized. By viewing processes as the service 
equivalent of a product's "raw materials" services can be designed, managed, and changed for 
positioning purposes the way physical goods are.