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Defining terminology is a useful starting point when reading or writing on the subject of service to prevent any confusion or assumptions that we all understand the terms to mean the same thing. So, what do we mean by goods, products and services? This is a book about service, but what is a ‘service’ and how is it different to ‘goods’ or ‘products’? Whilst most people intuitively know the difference between a product and service, actually defining this difference with clarity and accuracy of text is not straight forward.
M. Macintyre et al. (eds.), Service Design and Delivery, Service Science: Research
and Innovations in the Service Economy, DOI 10.1007/978-1-4419-8321-3_2,
© Springer Science+Business Media, LLC 2011
2.1 Introduction
Defining terminology is a useful starting point when reading or writing on the
subject of service to prevent any confusion or assumptions that we all understand
the terms to mean the same thing. So, what do we mean by goods, products and
services? This is a book about service, but what is a ‘service’ and how is it different
to ‘goods’ or ‘products’? Whilst most people intuitively know the difference
between a product and service, actually defining this difference with clarity and
accuracy of text is not straight forward. The terms ‘goods’ and ‘products’ appear to
be used interchangeably in much of the literature, but even here we can find debate
about meaning (Araujo and Spring 2006; Callon 1991, 2002). However, for the
sake of brevity we will here accept that they both refer to the same thing and focus
on attempts to differentiate goods and services. This quest is far from straightfor-
ward. Since the early eighteenth century academics and scholars from different
domains have attempted to define these terms explicitly (Say 1803; Levitt 1981;
Hill 1999; Gadrey 2000). In this chapter we will attempt to illustrate their findings
in order to provide some background to the debate.
2.2 Goods
In the eighteenth century Adam Smith (1776) stated that goods have exchange-
able value and so a characteristic of a good is that its ownership rights can be
established and exchanged. Goods can be considered as embodying specialised
G. Parry (*)
Bristol Business School, University of the West of England, BS16 1QY
Chapter 2
Goods, Products and Services
Glenn Parry, Linda Newnes, and Xiaoxi Huang
20 G. Parry et al.
knowledge in a way that is highly advantageous for promoting the division of
labour (Smith 1776; Demsetz 1993). Nassau Senior (1863) described goods as
material things, meaning that goods are tangible and have physical dimensions.
These concepts were still accepted over 100 years later when The System of
National Accounts (SNA) (1993) defined goods as physical objects for which a
demand exists, over which ownership rights can be established and whose owner-
ship can be transferred from one institutional unit to another by engaging in
transactions on markets. Hill (1999) summed up the major characteristics of
goods as an entity that exists independently of its owner and preserves its identity
through time; his definition supporting of that of the SNA. Following these defini-
tions we can outline a set of attributes for goods:
Physical objects for which a demand exists•
Their physical attributes are preserved over time•
Ownership rights can be established•
They exist independently of their owner•
They are exchangeable•
Unit ownership rights can be exchanged between institutions•
They can be traded on markets•
They embody specialised knowledge in a way that is highly advantageous for •
promoting the division of labour
These attributes are broadly accepted by academics and reflect 200 years of
ongoing debate.
2.3 Services
Although we have found a long standing agreement over the definition of products/
goods and their characteristics, the definition of services has never reached consen-
sus. Consequently it is hard to obtain full acceptance about the distinction between
goods and services. Here we will present some of the different perspectives on
service from the literature.
2.4 Intangible, Heterogeneous, Inseparable & Perishable
(IHIP) Characteristics
As marketers began to recognise and emphasise the importance of services (Fisk
et al. 1993) they consequently called for services to form a separate part of a com-
panies’ marketing strategy (Lovelock 1983). A major contribution to the services
debate was a classification consisting of four features:
212 Goods, Products and Services
These features of what makes a service, referred to as ‘IHIP’ characteristics, have
formed the basis of a consensus in most of the marketing literature. But what do
they mean in this context and do they provide a strong differentiator? Each charac-
teristic is discussed below.
2.4.1 Intangible
Intangible things are not physical objects and only exist in connection to other
things. Examples include a brands image, or goodwill. Harker (1995) humorously,
though usefully described services as ‘something that you cannot drop on your
foot’, which vividly illustrates the intangible characteristics of services. Although
the habit of describing services as intangible goods comes from the economics lit-
erature (Hill 1999; Miller 2000), this view is common in management and market-
ing sectors (Chase and Aquilano 1992; Bowen and Ford 2002).
However intangibility may have failings as a differentiator between service and
product. What is music, a book or a film? A product or a service? Hill (1999) identi-
fied this group of intangible products in the form of entities that are recorded and
stored on media such as paper, film, tape or disk. Intangible products include the
stories generated by authors, music created by composers or software games
designed by software engineers. Although these have no physical dimensions of
their own, Hill (1999) argues that in their saleable form these intangible products
have the salient economic characteristics of goods and little in common with ser-
vices. Therefore he suggests this type of intangible product should be recognised
and marketed as a type of good rather than a service. The intangible nature of ser-
vice is a useful characteristic to employ, but an ambiguity remains.
2.4.2 Heterogeneous
A common service varies according to the context, nature and requirements of each
customer. It may be varied according to different quality standards associated with
different costs; services can be varied across regions or cultural background; services
can also be fluctuated by different characteristics of providers. Therefore heterogeneity,
referring to the multifaceted different experience that may be had from a single type
of service is considered as a factor to distinguish goods from services.
However, numerous exceptions can be invoked to counter this distinction. For
example, some tangible goods can be heterogeneous. For example in the automotive
sector, the Mercedes E Class car is offered with 1024 variations and the claim on the
production line is there has never been two the same (Schaffer and Schleich 2008).
In contrast, services can be standardised. McDonald’s produces food under highly
22 G. Parry et al.
automated and controlled conditions (Levitt 1972) and customers receive the same
taste and quality of a certain type of burger all around the world – a homogeneous
offering. Yet most would consider a car to be a product and fast food a service.
2.4.3 Inseparable
Services may be said to be inextricably linked with customers in terms of
production and consumption and so it is said that service is inseparable. For
instance, a service provider may not provide their services until the customer
engaged. In contrast, a manufacturing company can still manufacture and deliver
goods through channels of distribution without knowing the end customers.
However, this characteristic is also open to challenge and interpretation. Automated
services such as an ATM allow customers access to a predefined set of services,
such as to check bank account balances and withdraw money, without the pre-
knowledge or assistance of banking staff. It could be argued that here the production
and consumption must be separated in order for the service to be mechanised.
2.4.4 Perishable
Using technical criteria to define services, Smith (1776) states a service will
‘perish in the very instant of its performance, and seldom leave any trace or value
behind them for which an equal quantity of services could afterwards be
procured’. Here Smith shows one of the important features of services, which is
perishability. It may be said that services are not a stock of fixed assets and it is
not possible to store services in inventories (Hill 1999; Gadrey 2000). For
example, when operating an airline a seat on a plane may be offered for a Sunday
night flight. If that seat is not sold, it cannot be stored and sold in the future – it
has perished. Likewise, if a traveller buys the seat and flies to their destination,
once the contract ends, the client is no longer entitled to stay in the seat or to
acquire any further services from the airline. Hence, the services provided perish
in the very instant of the contract termination and may be described as leaving no
trace or value behind them.
Jean Gadrey (2000) argued that services were not necessarily perishable, using
the example of the servant to illustrate his point. If it is the servant’s task to clean
and tidy the premises, then the output of their efforts does not vanish when the work
is done. In fact, the visual result is used to evaluate the quality of the work.
Therefore perishability is not a definite feature for all service sectors, but certainly
may be a useful characteristic to recognise in many service domains (Fisk et al.
1993; Hill 1999; Zeithaml et al. 2006; Araujo and Spring 2006).
Whilst IHIP characteristics are useful to the discussion on services, the charac-
teristics of a service offering they propose cannot be used to distinguish all goods
and services because we can find exceptions in each case.
232 Goods, Products and Services
2.5 Experience
The notion of service as experience is provided by Pine and Gilmore (1998), who
suggest: ‘Experiences occur whenever a company intentionally uses services as the
stage and goods as props to engage an individual’. For instance, when a ticket for a
rock concert is bought the buyer is provided a particular seat and is entertained by
musicians. It may be argued that they did not wish to buy a ticket or a seat but in fact
their purchase relates to their desire for a memorable and unique experience. Tangible
goods and intangible services are brought together to create a memorable experience
for customers at a point in time. Following Pine and Gilmore (1998) we can suggest
that the value of experience is a significant intangible characteristic of a service.
2.6 Quality
Customer service and service quality are key issues facing many service operations
managers. For a tangible product, customers can visualise its physical attributes
before purchase (Zeithaml 1981). For example, even though they perform a similar
‘transport’ function one can easily justify why a Rolls Royce is more costly than the
basic Tata Nano motor car from their aesthetic characteristics (Bowen and Ford
2002). However, it is relatively more difficult to compare the banking service pro-
vided by two similar UK based high street banks such as HSBC plc and NatWest plc
objectively. We may, for example, be heavily influenced by our own or our friends
experience. Chase and Dasu (2001) conclude that ultimately a customer’s perception
will be a determining factor on the effectiveness of a service organisation. Therefore
managers of service operations would usefully have a methodology to evaluate cus-
tomer satisfaction and loyalty subjectively (Heskett et al. 1994; Bowen and Shoemaker
1998; Paulin et al. 2000). Lundberg noted that more often than not, the quality and
value for a particular service can depend wholly on the customer’s judgement at that
particular instance (Lundberg 1991). For example, two people sat together can easily
have different views on a music concert and even the same person can have different
opinions of the service experience if asked at different times (Bowen and Ford 2002).
One commonly cited method that has been developed to assess the subjective quality
of a service is named SERVQUAL which is based on the gaps between expectation
and the perception of the service delivered (Parasuraman et al. 1988). SERVQUAL
enables service and retailing companies to evaluate consumer perceptions of service
quality and helps to identify areas requiring managerial action (Parasuraman et al.
1988). The approach divides the notion of a service into five factors that address a
customer’s perception of quality. The factors are:
Tangibles – physical facilities, equipment, staff appearance, etc.•
Reliability – ability to perform service dependably and accurately•
Responsiveness – willingness to help and respond to customer need•
Assurance – ability of staff to inspire confidence and trust•
Empathy – the extent to which caring individualised service is given•
24 G. Parry et al.
Quality is measured for each factor by the gap between the expectation and the
perceived service delivered. Using this method it is possible to gauge how well a
service offered meets the expectation of a customer. Using this model suggests that
manipulation of individual customer expectation through marketing or brand man-
agement can alter perception and hence the quality of the service.
2.7 Tradability
The producer of a certain product is its first owner, but the ownership can be trans-
ferred in terms of money or goods exchange during trading. According to Rathmell
(1966), compared to goods, a service is an act rather than a thing. When a service
is purchased the buyer pays out his money without establishing an ownership right
because there is no actual asset to establish ownership of. In contrast, when a good
is purchased the buyer acquires an asset where he can establish his ownership right.
As such goods and services may be defined with reference to their tradability. The
SNA (1993) definition mentioned earlier defined services as outputs produced to
order and which cannot be traded separately from their production; ownership
rights cannot be established over services and by the time their production is
completed they must have been provided to the consumers. From this definition,
two ways to distinguish goods and services are tradability and ownership rights,
with goods often seeming more tradable than services. This is because goods
such as clothes and electronics have a physical presence and therefore may
prove relatively easier to distribute globally, providing sufficient funds and resources.
In the days of Adam Smith it would have appeared near impossible to produce
services in one country and subsequently export them to another country. However,
as a result of the rapid development of technology, such as the internet and telecom-
munication channels, services can now be provided in a way similar to goods. It is
not unusual, for example, to set up a telephone call centre in India and to provide
services back to the UK (Araujo and Spring 2006). Companies adopting this
approach may take advantage of the cheaper labour of one country whilst gaining
the higher price of providing that service in another. Due to this, Hill (1999) con-
cluded that services can be, and are, exported, but only by resident producers pro-
viding the services directly to non-resident consumers.
2.8 A Change of Condition
Hill (1977) defined service as a change in the condition of a unit or a person, or of
goods belonging to some economic unit, which is brought about as a result of the
activity of some other economic unit, with the prior agreement of the former person
or economic unit. Hill emphasises that the institutional structure of production is
essential for the definition of services. Gadrey (2000) then built the service triangle
252 Goods, Products and Services
involving producer-user interaction. The concept of the triangular relationship is
illustrated by Gadrey’s garage example. Someone (A) owns a car (B) and the owner
(A) requests a garage (C) to repair the car. Ownership rights are not exchanged, but
value is created for both the owner in terms of having the car fixed and the garage
in terms of financial reward. Gadrey (2000) points out services always involve a
triangular relationship between A, B and C. This main contribution clarifies the
nature of services and places producer-user interaction at the centre of attempts to
distinguish between goods and services.
2.9 Goods and Services, or Is It All Service?
From the analysis so far, it is found that there is no perfect definition for separating
goods from services, though scholars have been trying for a very long time. In their
attempts to identify the differences between goods and services the similarities
between them are often neglected. Firstly, both goods and services can be tradable
which means both entities must at least have one provider and one customer. The
customer often pays an agreed fee to the provider in order to acquire the ownership
of a certain good or gain services for a certain period of time. In addition, there is
always a reason and motivation behind the act of providing certain goods and ser-
vices. It could be the provider who wants to make profit or improve their reputation.
Secondly, the characteristics of goods and services often overlap each other.
It is believed that there are actually very few pure goods and pure services. Instead
they may form a spectrum from pure goods on one side to pure services at the other,
with tangibility as the differentiator, joint entities in between having variations of
joint characteristics (Shostack 1977, 2001). Commodity items which are traded
globally based solely on price may be thought of as a pure form of tangible good
e.g. wheat, gold, crude oil. A purely intangible service may be teaching as each
person in the class will gain something different from the experience. John Rathmell
(1966) took a sculpture as an example of a pure good as ‘no act is performed’
though as a sculpture has aesthetic value, which could be seen as intangible, this
may be questioned. He also suggested that the benefit or utility arising from legal
counsel represented a pure service. With these forming the extreme, most goods,
whether consumer or industrial, require supporting services in order to be useful;
most services require supporting goods in order to be useful. Hence they will sit at
a point along this spectrum. It may be more appropriate to take a goods-services
continuum view point rather than defining goods and services explicitly.
Vargo and Lusch (2004, 2006, 2008) develop this line of thinking further and
contend that all products and services only realise their value through their use. All
products and services exist to provide ‘service’ to a customer, hence everything is
a service. They have developed this into a concept they describe as ‘Service
Dominant Logic’ or SD-logic. SD-logic focuses upon the concept of value creation
rather than ‘production’ and places value creation as an interactive process where
the firm and their customer must be considered within their relational context.
26 G. Parry et al.
Firms work in value creation networks, in dialogue with their partners co-creating
value. They state that ‘innovation is not defined by what firms produce as output
but how firms can better serve’. They make a clear distinction between competing
with offerings called services, which reflects a product/service distinction and com-
peting through service to provide value and positive experience for all parties.
We can see the rise of ‘service’ within industry as manufacturing firms provide
more complex product service combinations so that they do not need to compete on
the basis of cost along (Neely 2010). Servitization is the term becoming more
commonly used to describe this process, where companies increase revenue by
offering service options in addition to their products, such as guaranteeing
availability or providing service for the products life (Vandermerwe and Rada 1988;
Oliva and Kallenberg 2003). This integration of products and services has been
labelled a ‘product and service system’ [PSS]. PSS are described as offering ‘value
in use’ (Baines et al. 2007), which means their value is only realised through their
utility – which takes us back towards the concept of service as experience (Pine and
Gilmore 1998).
2.10 What Are Products/Goods and Services?
Despite many years of research clear definitions of product and service has eluded
researchers. Figure 2.1 shows the timeline for some of the debate in the literature,
covering more than 200 years.
From this work the ambiguity of any single definition of service and how any
perspective taken may influence process or value should be recognised. What we
have seen is that the thinking has shifted from a pure service or pure product focus
to a combination or product-service system (PSS). This recognises the offering of
a combination of product and service for which greater revenue may be generated.
Taking a pragmatic view, we should work with the customer to understand how
goods and services best create a service value proposition, meet market require-
ments and generating sustainable profit for the firm and the customer.
• Identifythreedifferentservicesthatyouhaveusedandarefamiliarwith.
° Why are the three cases you chose services and not products?
° How is the service delivered?
° What contribution do you as a client have to make to access value from the
▪ E.g. fill in forms, make decisions etc.
° Could you improve on the design of one of these services to deliver a better
experience for the client and greater profit for the provider?
272 Goods, Products and Services
Fig. 2.1 Defining goods and service: over 230 years and counting
28 G. Parry et al.
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... Literature revealed that in today's market, there are 1,024 possible configurations for a car model based on different engine, chassis, electronic configurations, etc. (Parry et al., 2011). This has created the service tasks more demanding. ...
... The garage mechanic now must deal with a wide range of vehicles that also come up with new technologies introduced every year. Parry et al. (2011) observed that maintenance technicians must manage complex items which could emphatically fluctuate with the design. This infuses a lot of confusion among workers in terms of procedures and operations (Borsci et al., 2015). ...
Purpose The increase in automobile usage across the world has fortified the opportunities of maintenance service garages. However, there are significant numbers of challenges in front of maintenance service providers at all stages of the business. This paper identifies, analyzes and prioritizes various challenges associated with the establishment and survival of garages specific to Indian context. Design/methodology/approach In this paper, challenges for automotive service garage are identified through expert opinion, garage survey and literature. A structural hierarchical framework of the identified challenges is established through structural models, including interpretive structural modeling and analytic hierarchy process. Findings This paper has identified nine challenges, namely proliferation of new models and variants; technological advancements in automobile systems; demand of better service quality; space and ambience requirements; labor requirements; requirement of modern support equipments, tools and spares; safety requirements and prevention of occupational hazards; environmental norms and concerns; proper documentation requirements. The drivers and dependent variables have been identified. A hierarchical framework of challenges has been established. Practical implications This paper provides a comprehensive list of challenges and their priority in establishing an automobile maintenance garage business in Indian context. This will help the budding entrepreneurs and existing maintenance organizations to focus on the challenges that necessitate immediate attention and corrective actions. Originality/value This paper provides a significant contribution in the literature of garage maintenance services, which is established on the viewpoint of different collaborators associated with this business. This study will be a foundation to investigate further in this domain.
... Heterogeneity is defined as a performance that often varies from customer to customer, producer to producer [30] , and other studies define it as not having a standardization [16], [17], [21]. These multifaceted different experiences that may result from a single type of service are considered as a factor to distinguish goods from services [19] where there is also define as customer value [18]. Specifically in tourism context, heterogeneity is defined as a variation in the service delivery from customer to customer that is difficult to standardize the interaction of employee-customer [26]. ...
... The general definition of perishability is the inability to inventory service, so there is no cost of inventory, storage, and transportation of goods compared to physical goods [16], [17], [20]. Thus, it can be said that service is produced and consumed in instant and leaving with no value behind, but the experience is stored [18], [19]. Additionally, for the tourism industry, the meaning of perishability is when the service product is not sold, then the value will be lost forever [26]. ...
... Although the product-oriented development is de-facto in the industrial production, the case is different in the IT field. The thinking has shifted from the pure product focus to a combination of service and product [16], and the pure product concept is prone to disappear behind service, especially in the banking sector. Unlike the context of the industry, in the software field, the development process is complex and dynamic and it deserves an interest at least as much as the result itself. ...
Conference Paper
Full-text available
Information Technology (IT) is a complex domain. In order to properly manage IT related processes, several frameworks including ITIL (Information Technologies Infrastructure Library), COBIT (Control OBjectives for Information and related Technologies), IT Service CMMI (IT Service Capability Maturity Model) and many others have emerged in recent decades. Meanwhile, the prevalence of agile methods has increased, posing the coexistence of agile approach with different IT frameworks already adopted in organizations. More specifically, the pursuit of being agile in the area of digitalization pushes organizations to go for agile transformation while preserving full compliance to IT frameworks for the sake of their survival. The necessity for this coexistence, however, brings its own challenges and solutions for harmonizing the requirements of both parties. In this paper, we focus on harmonizing the requirements of COBIT and Scrum in a same organization, which is especially challenging when a full compliance to COBIT is expected. Therefore, this study aims to identifying the challenges of and possible solutions for the coexistence of Scrum and COBIT (version 4.1 in this case) in an organization, by considering two case studies: one from the literature and the other one delivered in this study. Thus, it extends the corresponding previous work from two points: adds one more case study, to enrich the results from previous case study and provides more opportunity to make generalization by considering two independent cases.
... 6 While selling a 360-degree VR music video as a download may have worked for Björkbecause she was such an early adopter of these technologies in 2015-platform economics, a relatively new term, provides an economic model for intangible trade (Towse 2019). For Parry et al. (2011): 'Intangible things are not physical objects and only exist in connection to other things. Examples include a brand image, or goodwill' (p. ...
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This chapter concludes the book and addresses XR design. It features a case study of Icelandic musician and visual artist Björk’s release of her full VR album Vulnicura (Björk 2019c). A case study of Florida-based company Magic Leap’s work with Icelandic band Sigur Rós is also provided. Sigur Rós (2020) and Magic Leap collaborated to develop an interactive music and mixed reality experience called Tónandi. This chapter then traces the declining cost of XR production and the role companies such as Facebook, and platform economics generally, have to play in this. Design culture has agency here for changing practice norms for the visual creators/designers and artists interviewed for this book, particularly in relation to intellectual property policies, and therefore design culture has an instrumental role to play in changing the deal making around visual representative media in this business; the music business can be changed through a new kind of design culture.
In the literature on the firm-industry debate to explain organizational performance the firm effect has been more supported than the industry effect by empirical studies, mainly focused on manufacturing firms and long time periods. Unfortunately, little attention has been paid to the service sector. In this paper we study separately manufacturing and services in a broad sample of Spanish companies. We observe that in manufacturing the firm effect outweighs the industry effect while in services the opposite is the case in a ten-year period. However, when we split the time horizon into two five-year sub-periods, this behavior only remains in the second one, of moderate economic growth. In the first one, of strong economic growth, the firm effect prevails for both manufacturing and services. These findings underline the importance of the industry effect for services, suggesting that such effect may have been underestimated in the literature, as well as that of the level of economic growth specially for the decision-making of practitioners.
Extant literature on corporate social responsibility (CSR) and marketing shows that CSR plays an important role when a service fails; thus, application of recovery strategy becomes crucial for sustainable development. CSR creates greater performance expectations amongst stakeholders as well as helps to legitimise organisational activities when a service fails. This study maintains that CSR is crucially important not only in legitimising organisational actions, but in ensuring that stakeholders' loyalty, trust, and justice are assured. This CSR, service failure, and recovery nexus is more needed in the controversial extractive industry in Nigeria, which has a history of illegitimacy, irresponsible corporate responsibility, lack of accountability, and failure of justice, which have triggered and sustained corporate-stakeholder conflict. This landscape has negative impact on sustainable development, peace, and justice in the Niger Delta region of Nigeria, where oil is extracted.
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Background Based on the previous literature it is confirmed that Performance-based service quality and patient satisfaction are major antecedents of behavioral intentions in the healthcare sector. Here, the study deals with the same variables under the framework of Ayurveda healthcare. Objectives The study is an attempt to understand the perceptional differences of healthcare consumers in Ayurveda, by analyzing the relationship between the service quality, satisfaction, and behavioral intentions in Ayurveda. Materials and Methods Using the convenient sampling technique, 404 samples were collected through direct interview, with a structured questionnaire from the in-patients of 20 accredited Ayurveda hospitals from the northern part of Kerala, a southern state of India. Respondents of the study consist of mostly women who were aged above 40. ANOVA and t-test were used to evaluate the differences in the perception of healthcare consumers, and multiple regression analysis and structural equation modeling were applied to propose two relationship models from the study. Results The perception of healthcare consumers are found to vary for service quality and patient satisfaction according to socio-economic variables except for the education factor. Later the test on the impact of performance-based service quality on patient satisfaction and the mediation model showed a significant influence between the variables. Conclusion The results of the study could empirically prove the relationships of these variables significantly and it can assure some quality contributions to the healthcare managers to modify their business policies in the future.
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The transition towards Servitization in the IT Business is extremely challenging because IT Enterprises must transform partly or entirely from hardware manufacturers into service providers. Moreover, Servitization does not occur all at once; it is a long and continuous process. Thus, in order to succeed, a company must determine which phase of this process it is in within a short time period, due to the dynamic competition in the modern IT Business. An examination of such a transition is crucial for accurate enterprise resource planning and for business success in general. Accordingly, to gain a better understanding of this process/transition in the IT industry, five major players were analyzed. We provide a foundation of the definitions and concepts regarding Servitization. Based on this foundation, every major player is analyzed by business segment. Then, those business segments are broken down into the offerings delivered to the customers. Depending on the offering, an analysis of the revenue is performed. In addition, we discuss the challenges and their effects on every company, and then we examine the similarities and differences in the process. We conclude with a brief statement of our primary achievements, and possible future investigation directions/topics are suggested.
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The authors offer their personal interpretations as participant-observers together with a data-based analysis of the evolution of the services marketing literature. Bibliographic analysis of more than 1000 English-language, general services marketing publications spanning four decades provides the empirical base for the paper. Using an evolutionary metaphor as the framework, the authors trace the literature through three stages: Crawling Out (1953–79); Scurrying About (1980–85); and Walking Erect (1986-present). The discussion of the three stages shows how the literature has evolved from the early services-marketing-is-different debate to the maturation of specific topics (e.g., service quality, service encounters) and the legitimization of the services marketing literature by major marketing journals. A classification and summary of the publishing outlets where the literature has appeared is presented. The article closes with discussion and speculation on the future of the services marketing literature.
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Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output. The dominant logic focused on tangible resources, embedded value, and transactions. Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships. The authors believe that the new per- spectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange. The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators.
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Since the introductory article for what has become known as the “service-dominant (S-D) logic of marketing,” “Evolving to a New Dominant Logic for Marketing,” was published in the Journal of Marketing (Vargo, S. L., & Lusch, R. F. (2004a)), there has been considerable discussion and elaboration of its specifics. This article highlights and clarifies the salient issues associated with S-D logic and updates the original foundational premises (FPs) and adds an FP. Directions for future work are also discussed. KeywordsService-dominant logic-New-dominant logic-Service
The authors conducted an extensive review of literature to see if there was evidence indicating there are differences in the management of services and manufacturing organizations. The literature identified differences that related to measurements used to assess effectiveness and efficiency, differences in production strategies and differences in production processes between organizations producing tangible goods and those producing intangible services. The results of the review indicate that there are a number of important and defendable differences between managing a manufacturing firm and a service. The authors also provide tables summarizing the differences and provide research implication for each difference. The review serves as a foundation for future academic efforts to better understand the unique challenges of managing organizations in the services sector.
Complexity cost management refers to costs in industrial production processes that are directly or indirectly related to the handling, management or creation of different variants of a product. The current understanding and state of awareness of the influence of complexity on cost structures is reflected in the results of a survey carried out by the authors. The methodology used to analyse the complexity costs of existing processes is described and a case study from the automotive industry, which is highly affected by variant-driven complexity costs, is introduced. Furthermore, a model to calculate potential complexity costs, when changing product variety based on the number of variants, variant drivers and the characteristics of variant drivers, is shown. Finally, an easy-to-handle tool, which allows more detailed determination of complexity costs based on changing product variety parameters, is presented.