Goods Services Continuum

The division of consumables into services is a simplification: these are not discrete categories. Most business theorists see a continuum with pure service at one endpoint and pure tangible commodity goods at the other. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambience, the setting and clearing of the table, etc. Although some utilities, such as electricity and communications service providers, exclusively provide services, other utilities deliver physical goods, such as water utilities. For public sector contracting purposes, electricity supply is defined among goods rather than services in the European Union, whereas under United States federal procurement regulations it is treated as a service.

Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service once delivered cannot. Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.

Marketing theory makes use of the service-goods continuum as an important concept which ‘enables marketers to see the relative goods/services composition of total products’.

In a narrower sense, service refers to quality of customer service: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing.

The goods and services continuum enables marketers to see the relative goods/services composition of total products. A product’s position on the continuum, in turn, enables marketers to spot opportunities. At the pure goods end of the continuum, goods that have no related services are positioned. At the pure services end are services that are not associated with physical products. Products that are a combination of goods and services fall between the two ends. For example, goods such as furnaces, which require accompanying services such as delivery and installation, are situated toward the pure goods end. Products that involve the sale of both goods and services, such as auto repair, are near the center. And products that are primarily services but rely on physical equipment, such as taxis, are located toward the pure services end.

A few observations of the Continuum model can be made:

• The offerings of a firm range from pure goods to pure services.
• Those that are mostly goods are tangible and are very easy to evaluate by the consumer (like fabrics, jewellery, a house etc.). A consumer finds it very difficult to evaluate those offers which are mostly services because of their intangibility (like legal and counselling advice, medical diagnosis etc).
• The range of offers has different qualities in themselves and the customer looks for or seeks these qualities:

Those that are mostly goods show search qualities. Customers know exactly what they want and look for those features in the offer. Thus, an apartment hunter would look for a 2­bedroom-hall-kitchen property in Bandra admeasuring 900 square feet in car.pet area. Or, a lady might look for specific designs in a 23-carat bangle from a Tanishq outlet. Mr. Joseph looks for worsted, blue woollen suit material for himself etc.

Thus a marketer can put the search quality features on prominent display and make it easier for customers to get details or access. If the customers do not find these features in their search they may become anxious and may not buy or they may go for rival products where there is easier access to information.

Those offers that are mostly services evince credence qualities There are no tangible features for the customer to search for. He then looks for credo qualities in the offer Reputation of the offer becomes the decisive factor. He has very few other alternatives to compare. Thus, Mrs. Manjrekar would choose only that lawyer to fight her divorce and custody battle who has a reputation for winning such court cases. A patient would. choose his doctor or surgeon on the basis of his reputation.

We tend to give our computers or for -repair on the basis of the reputation of the repairman. A marketer of such offers has to be doubly careful in highlighting the credibility of the service provider. An actor is never called again for a stage play if his histrionic talent is in question; a doctor or surgeons whose ethical reputation is in question right never have patients. Thus, in the product-service continuum’, services can be classified in three ways, under the range or degree of tangibility highly tangible to highly intangible. They are:

Highly tangible services:

They have high degree of tangibility. This is mainly because the services are rendered over certain goods, e.g., car rentals. It is a service based entirely on cars. If a place had no cars, such a service would cease to exist. For the marketer, it is both a boon and a curse. As mentioned, car rentals exist only because cars exist. It’s easy for the service marketer to be persuasive and “tangibles” the offer. He only has to include the car in his communication; the service concept could be easily comprehended by the consumer. In addition, if the car has a good brand image and is looking spick and, the car rental basks in the reflected glory. If the car rental mentions in its advertisements about the type of cars in its pool, the consumers perceive the quality of the company accordingly. Alternatively, if the car breaks down during a rental service, the consumer will have a poor impression and image of the car rental company. He would not reason that it was the car that broke down and failed and that the car rental company should really not be blamed.

Examples of car rental companies in India are Dial-a-Cab, in Delhi, and -Wheels-Rent-A­-Car (WRAC) of the Bhoruka group, who also own Transport Corporation of India, the giant fleet trucking enterprise. Other car rental companies are Hertz-Rent-A-Car and Avis in the United States.

Service linked to tangible goods: Here the service is linked to goods, either independently, or as part of the marketer’s offer. If it is the latter, the service becomes a part of the total product concept. This takes place when Videocon, the home appliance company, includes repair as part of its marketing mix. Even if it is not included, home appliance repair is a service that is forever linked to goods. If there were no home appliances in the world, such services would be non-existent. A whole range of services exists in the housing sector especially post-construction like repair and maintenance.

Highly intangible services: In this classification under the continuum model, service is highly intangible. The services cannot be touched, felt or seen, e.g., counselling, consultancy, psychotherapy, physiotherapy, a guest lecture, etc.