Page 12 - DMGT510_SERVICES_MARKETING

Unit 1: Introduction to Services Marketing

1.3 Product vs. Services Notes

Levitt has suggested, “There are no such things as service industries. There are only service
industries whose service components are greater or less than those of other industries. Everybody
is in service.” The point that Levitt was trying to put across is that with almost every tangible
core physical product, an intangible service component is associated. Therefore, everybody is in
service.

Figure 1.2

It was as early as 1977 when Ms G Lynn Shostack, the Vice- President of Citibank, suggested that
marketing ‘entities’ are combinations of intangible and tangible elements that are distinct and
discrete. If these absolute tangible and intangible elements are taken to the two ends of a
continuum, we can observe that all goods and services don’t fall at one place. There is a range
that varies from absolute tangible goods like salt to an absolute intangible service like education.

Task Prepare a tangibility spectrum and product-service continuum including services
other than those given in this section.

Theodore Levitt proposed the other approach of distinction between various goods. According
to him, goods can be put into two categories, namely, search goods and experienced goods.
Search goods are generally those goods which are packaged goods and the customer can see,
evaluate and try them prior to purchase.

Example: Car, shampoo, etc.
Experience goods, on the other hand, are those which one can see or evaluate after purchase.

Example: Holidays, teaching, etc.
Some persons call search goods as tangible goods and the others as intangibles. There is a range
between the two extremes and there could be certain products falling in this range, as explained
in Figure 1.3.

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