Microsoft Word Volume 2 Service and Service Quality Final docx

Service Definitions 
In this section we discuss the definition of ‘service’, drawing mainly from the services marketing and 
operations literature, wherein service conceptualisation has received much attention (see Table 1 for 
representative samples). While service is also the object of research in many other disciplines, such as 
economics, management, engineering, information systems, and software engineering, to name a few, 
our review focus on these two disciplines as they have had a longer history in establishing general 
conceptualisations of service that are often technology-agnostics, a key defining characteristic of 
business services within the business service management research agenda of this work package.
Service Marketing research has a long tradition. A ground-breaking article by Shostack (1977) argues 
that Service Marketing is an uncharted frontier, requiring new concepts to succeed. In particular she 
argues that “it is wrong to imply that services are just like products ‘except’ for intangibility” 
(Shostack, 1977, p.73). Shostack introduces a ‘molecular model’ to postulate that total market entities 

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Business Service Management White Paper - Volume 2 
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(or offerings) consist of ‘combinations of discrete elements which are linked together in molecule-like 
wholes.’ This enables the definition of a market entity that can be partly tangible and partly intangible 
and does not neglect either aspect. It makes it possible to describe an array of market entities along a 
continuum from tangible to intangible being dominant. ‘The greater the weight of intangible elements 
in a market entity, the greater will be the divergence from product marketing in priorities and 
approach.’
Service as “Not-product” market offering 
In the early days there was a strong need to differentiate services from products; to argue the need for 
Service Marketing as a separate discipline with its own body of knowledge. Early attempts to define 
the nature of the service act, seem to be either definitions by exclusion or by illustrative lists (Judd, 
1964). Judd defined ‘marketed services’ saying: ‘Pending the development of a positive definition, 
some progress can be made by returning to the principle of definition by exclusion. Such a definition, 
limited to marketed services, is: “A market transaction by an enterprise or entrepreneur where the 
object of the market transaction is other than the transfer of ownership (and title, if any) of a tangible 
commodity.”’(Judd, 1964: 59) This resulted in a relentless pursuit of the characteristics that 
differentiate services from products. The most cited such service characteristics are Intangibility, 
Heterogeneity (or non-standardisation), Inseparability (of production and consumption), and 
Perishability (or exclusion from inventory) (Zeithaml, Parasuraman, & Berry, 1985), often referred to 
as IHIP. Of these characteristics, intangibility is often considered the most prominent, denoting that 
services are activities and not physical objects. However, Lovelock and Gummesson (2004) argue that 
intangibility is an ambiguous and limited concept, and that many services are directed at achieving 
tangible changes in customers themselves or their possessions. 
The IHIP characteristics are often criticised because they are based upon what a service is not. The 
IHIP characteristics are often seen as a contra-view of service (e.g. as non-goods), overly emphasizing 
the view of the provider (Vargo & Lusch, 2004), and does not capture the essence of services; in 
particular their process and interactive nature (Edvardsson, Gustafsson, & Roos, 2005). Vargo and 
Lusch warn that such a perspective may point service management in the wrong direction, i.e. to make 
service provision more good-like. Moreover, Vargo and Lusch argue that many of these characteristics 
apply equally to goods as they do to services (e.g. the intangible benefits of goods can be more 
important than their tangible attributes) and can be used to make goods production more service-like. 
Edvardsson et al. (2005) suggest the need to differentiate those services for which each of the IHIP 
characteristics are relevant and situations where they are useful and fruitful. Broadly, instead of 
drawing a distinction between goods and services, it makes more sense to see the goods and services 
as the extremes of a goods-services continuum, as already suggested by Shostack (1977).