European Journal of Marketing

The marketing of services: an approach

K.J. Blois
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K.J. Blois, (1974),"The marketing of services: an approach", European Journal of Marketing, Vol. 8 Iss 2
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 | 137

The Marketing of Services:

An Approach
by K. J. Blois

Definitions
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One of the difficulties of discussing this topic is the lack of an agreed definition of
a "service". Many writers have suggested definitions and the majority have revolved
around the degree of tangibility of a good. Wilson[l] after discussing several of the
better known ones, suggests that the one put forward by the American Marketing
Association[2] (that services are "activities, benefits and satisfactions which are offered
for sale or are provided in connection with the sale of goods") is the most widely
accepted. However, this particular definition could easily be construed to include goods
not normally considered to be services. Surely, for example, a tin of peas offers benefits
and satisfactions to consumers? In an attempt to overcome this objection this paper
amends the AMA's definition as follows: "A service is an activity offered for sale
which yields benefits and satisfactions without leading to a physical change in the form
of a good".
Such a definition seems to include clearly those activities normally considered as
services, e.g.: insurance, banking, consultancy, distribution, transport, etc., without
including items like tins of peas or machine tools. Its weakness lies in the fact that it
excludes such activities, usually considered to be services, as hairdressing or restau-
rants. Furthermore, as with most definitions an infinite number of "hair-splitting"
problems can be considered—for example, an off-licence in a public house would, be
by this definition, a service activity, while the public bar, by opening the bottles and
pouring them out, would not! Nevertheless this definition does seem to discriminate
between services and other activities in a way which more clearly matches the popular
conception of services than most other definitions. For this very pragmatic reason this
will be the definition adopted here.

Services in the UK Economy

Although there is little agreement on a definition of a service, there is little disagree-
ment with the statement that the service sector of the UK economy is large and
growing. Thus Smith[3] (who defines services as comprising the 1958 SIC orders XX to
XXIV—distribution, finance, professional services, miscellaneous services and public
administration) gives the employment data (which is one possible measure of the
services' importance) shown in Table I.
 138 | European Journal of Marketing 8, 2

Table I. Percentage of UK Work-force employed in Service Industries

1951 1961 1966

Services excluding transport 39·6 41·4 43·3

Services including transport 47·3 48·5 50·0

(Source: Reference 3, p. 17)

Many of the service industries have traditionally avoided any really positive
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marketing activity (e.g., stock brokers were not allowed to advertise until recently,
but some did use special reports on particular industries as a form of publicity);
nevertheless the expenditure on marketing in certain services industries has reached
large sums.
Table II shows expenditure on TV and press advertising only in some service
industries, and clearly indicates that overall expenditure on marketing must be high
in some or all of thefirmsin these service industries at least.
In view of this situation in the UK and other economically developed nations it is
surprising tofindso little written about the marketing of services. Thus an examination
of marketing journals such as the European Journal ofMarketing, Journal ofMarketing
and Journal of Marketing Research indicates that few articles on this topic have been
published. As far as textbooks are concerned, relatively few mention the topic at all
and those that do often spare only a few paragraphs to it. For example, Kotler in 1967
[4] does not comment at all, while the second edition of his book[5] has a chapter on
"metamarketing", but only two pages of it are about the marketing of services. Indeed
few writers spare even a complete chapter to the subject (examples of authors who do
are Stanton[6], and Converse et al[7] and Wilson[8] writes one of the few books
concerned solely with the topic, although as his title (The Marketing of Professional
Services) indicates, he is concerned with a particular sub-set of services.

Table II. Expenditure on Press and TV Advertising in 1969

(£'000s)

Finance/H.P. companies 1,425

Foreign banks and travellers' cheques 768
Insurance companies 2,952
Joint stock banks 2,554
Holidays, travel and transport 12,607

(Source: IPC Marketing Manual of the UK, 1970)

 The Marketing of Services | 139

The Current Approach

The paucity of marketing literature on this topic can only be justified if the problems
of marketing services really are basically no different from the problems of marketing
other products. However, examination of the available literature indicates that there
are differences. Indeed, discussions with personnel concerned with the marketing of
services make it apparent that they obtain relatively little help from traditional
marketing literature.
There appear to have been three main approaches to discussing this topic:
—the development of taxonomies, e.g., Wilson[9] and Stanton[10],
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—the listing of types of services, e.g., Kotler[11] and Converse[12], and

—the listing of differences between product marketing and the marketing of
services, e.g., Wilson[13] and Branton[14].
Each of these approaches is helpful and can usefully be taken further than they have
been to date. Thus Wilson, when using the taxonomic approach, suggests that services
can be considered under the following three headings:
(a) Degree of durability. This classification is based upon the concept that services
purchased now provide benefits over differing period of time. Thus attendance
at a cinema show affords, in most cases, a fairly immediate satisfaction, while
education provides benefits over a much longer period of time.
(b) Degree of tangibility. Wilson suggests that this classification can be broken
down further into:
services providing pure intangibles, e.g.: museums, security; services provid-
ing added value to a tangible, e.g.: car insurance, contract maintenance:
services that make available a tangible, e.g.: hire purchase, wholesaling.
(c) Degree of commitment. This classification is closely linked with the fact that
many services are purchased on a basis which implies or contractually binds the
purchaser to a commitment through time. For example, mortgages and life
insurance (although they can be terminated at a cost) usually imply a com-
mitment over a long period. However, other services typically involve very
short-term commitments in that they can be postponed or eliminated at very
short notice. This latter category would include private education, direct
payment private medicine.
However, other headings, not suggested by Wilson or Stanton, are useful. For
example:
(a) Degree of essentiality. Thus if you own a car then third party insurance cover is
legally essential while full cover is considerably less essential in that it is not
legally obligatory.
(b) Degree to which one can postpone. This is partially covered by Wilson's des-
cription of his classification "degree of commitment", but there would seem to
be two separate factors. Thus taking out a life insurance can be delayed but
 140 | European Journal of Marketing 8, 2

once taken out implies a degree of commitment (in Wilson's sense). In some
cases a service would be impossible to postpone because of its degree of
essentiality, but some services can be postponed although essential. An example
of this is regular attendance at the dentist—certainly essential if good teeth are
to be maintained but easily able to be postponed while no pain occurs!
(c) Degree of cost. Clearly services range widely in cost. In many cases where the
cost is high interesting conflicts may arise for potential consumers (and thus
opportunities for creative marketing). For example, if a service is essential but
costly, the need to raise the necessary finance might cause the purchase to be
delayed in spite of that service's essentiality, unless some form of financing
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arrangements are created.

Converse, one of the authors who produces lists of types of services, seems to be
dating quickly as new product development (which tends to occur frequently in
service industries) makes each of his type of services merely a group heading. For
example, Converse lists insurance services and investment services as separate, but
recent developments in the United Kingdom have led to the development of new forms
of insurance—linked unit trusts which provide insurance cover, with tax benefits and
investment opportunities.
The third approach, that of considering the differences between marketing services
and marketing other products, is typified by Branton. It is suggested that critical
differences occur with regard to quality assessment, promotional methods, the
heterogeneity arising from the personality of the seller or producer and the lack of
distribution problems. All these factors can be illustrated by the situation of an
osteopath. The service offered here is difficult to judge with regard to quality, and this
makes for difficulties of promotion. The consumer's assessment of the quality of the
service in most cases will, be closely linked with their liking for or dislike of the
practitioner, and the distribution problem is one of finding a mutually acceptable
meeting place. However, there are services to which some of these differences are not
applicable or non-service goods to which some of these factors do apply. An example
of the former situation is life insurance, which is most frequently arranged by letter
and form-filling with no personal contact; an example of the latter situation is any
technologically complex product, such as a hi-fi system, where quality assessment is
beyond the capabilities of the average purchaser.
In spite of these criticisms, the approaches outlined above have their uses—for
example, classification enables facts and objects to be arranged in an orderly fashion
so that their unifying principles can be discovered. Nevertheless, none of them really
comes to terms with the problem of indicating possible marketing strategies.
 The Marketing of Services | 141

The Importance of Theories of Buyer Behaviour in Marketing

It is generally accepted that one of the purposes of theories is to provide a framework
to enable problems to be analysed and solutions suggested. In the case of theories of
buyer behaviour, it is apparent, from the following quotations, that their originators
see this as one of their objectives:
"The company policy maker at the marketing management level needs theory . . .
the need for theory is to help the marketing executive in making the decision that
alters product and promotion, in collecting the data on which to base the decisions
in the first place, and in interpreting the data once he has collected them[15]".
"Individuals responsible for managing business enterprises (and other types of
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organisations) have a special interest in understanding consumer behaviour[16].

"We hope . . . that research of this kind eventually will be of direct utility to the
marketing decision maker[17].
In part, these claims are made on the basis of the fact that they are seen as general
theories. For example, Howard and Sheth have suggested that their theory of buyer
behaviour operates at what they call a "second-order level of abstraction", in that their
theory "encompasses description, explanation, and prediction of all types of buying
behaviours and is not limited to either a given product class or even a type of product
group such as consumer durables or industrial products[18]. The aim of most origina-
tors of theories of buyer behaviour is to operate at this level of abstraction. (Thus the
risk-taking approach to buyer behaviour is frequently referred to in the literature of
industrial marketing, even though the original work was developed around consumer
purchasing patterns[19, 20, 21]).
Thus, on these two grounds—their generality and their intended utility—one would
expect these theories to be of interest to any marketing manager, but particularly to a
marketing manager moving from one productfieldto another. For the person moving
into the field of marketing services, it might be expected that these theories could be
extremely valuable as there is so little in the way of established techniques and
methods of approach compared with otherfieldsof marketing—especially the market-
ing of consumer nondurables. Furthermore, the differences such as those considered
by Branton[22] and Wilson[23] between the marketing of services and the marketing of
other products are sufficient to indicate that in general to seek to transfer the methods
of marketing consumer products directly to the marketing of services could be
dangerous. Indeed, the situation appears to be analogous to the relationship between
industrial marketing and consumer marketing, where many of the techniques and
approaches of consumer marketing have been found to be inapplicable in industrial
marketing. The diagram shown in Figure 1 seeks to illustrate this. The dotted lines
indicate the relatively weak links between, for example, the techniques and methods
of marketing industrial products and consumer products (e.g., some cross-relationship
does exist, but the differences are not so insignificant that they can be ignored) with the
full lines indicating the strong links through the general theories.
 142 | European Journal of Marketing 8, 2
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Buyer Behaviour Theories and the Marketing of Services

In an attempt to illustrate the claim made above, namely that theories of buyer
behaviour can help in formulating marketing strategies, this section will outline one
such theory and suggest its implication for the marketing of service.
The theory of consumer behaviour as risk taking deals with perceived risks which,
it is suggested, can arise as a result of one or more of the following factors[24]:
Types of Perceived Risk
(1) uncertainty about buying goals,
(2) uncertainty about products' ability to satisfy goals,
(3) perception of adverse consequences if a purchase is made.
The theory suggests that consumers use various strategies to reduce perceived risks
to an acceptable level, and typically these may include one or more of the following
[25]:
Risk Reducing Strategies
(1) reliance on one's own personal experience,
(2) reliance on the personal experiences of others,
(3) taking precautionary measures,
(4) choice avoidance,
(5) reliance on buying maxims,
(6) delegation of buying responsibility.
How then might such a theory assist a marketing manager in a service industry who
is seeking to formulate a marketing plan? Firstly, the theory suggests that individuals
may perceive risks in connection with products he is considering purchasing. Secondly,
 The Marketing of Services | 143

it suggests that one or more of a variety of strategies might be used to reduce the risks
perceived. It follows that the marketing manager should seek to identify any such risks
and then devise strategies which will help the consumer to reduce these perceived risks.
Consider, for example, the case of a person responsible for running adult evening
classes of a non-vocational nature. Such a person, on the basis of either his own
experience or of marketing research, may establish that the following risks are often
perceived by potential "consumers" under the three headings suggested by the theory:
(a) Uncertainty about buying goals: "What do I want to achieve with my recrea-
tional activities? Social contact, increased skills or knowledge, fitness?"
(b) Uncertainty about product's ability to satisfy goals: "Will attending an evening
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class on modern French novelists satisfy my need for social contact and
increased knowledge?"
(c) Perception of adverse consequences if a purchase is made: "Will the class be
boring and badly presented—just like school?" "Will the class close through
lack of numbers after a few weeks, by which time I will have bought books and
equipment?"
The methods which the theory suggests consumers might use to handle these risks
may well guide the organiser in his marketing plans. For example, it may be believed
(or established by market research) that many people consider adult education to be
"like school". If this is the case then the following adverse consequences might be
perceived in attending adult education activities:
"It will be boring";
"I'll be talked down to by the teacher";
"It will be badly presented".
Any attempt by an individual to reduce such perceived risks by reference to his own
experience (risk reducing strategy (1)), whether or not school was an enjoyable experi-
ence for that individual, is unlikely to provide attractive associations to an adult
because of schools' and schooling's lack of adult connotations. Thus a marketing
strategy which would suggest itself is to avoid the use of terms such as "classes" and
"teacher" in publicity and the running of these activities, and to seek to use terms with
neutral associations such as "sessions" and "centres".
This type of risk together with uncertainty about goals may also be reduced by
enabling consumers to take precautionary measures (strategy (3)). For example,
attendance at the first, say, three classes could be free of charge, thus enabling people
to sample the product with no financial commitment and the format and content of
these 'sample' classes could be designed to emphasise the difference between them and
formal education and to suggest satisfactions which might be achieved by attending
the whole session.
Consideration of the other forms of the three types of perceived risks might lead
to other types of strategy being suggested. However, this approach to developing plans
through use of a theory is only really useful if it leads to the development of practical
 144 | European Journal of Marketing 8, 2

and more effective marketing policies than other approaches. At this stage of the
development of the topic only a subjective judgement can be given and this, in the
author's opinion, is that it is very difficult to directly translate the ideas and approaches
of consumer or industrial marketing to the marketing of services. The only way in
which it seems possible to do so is to appeal to theory which has been built on the
experiences of others or to seek to generalise on the basis of one's own limited experi-
ence.

Conclusions
This paper has sought to suggest an approach to the marketing of services which has
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not been discussed in the literature. Without doubt experienced marketing managers
in these areas have worked instinctively in the manner suggested here. However, there
seems to be a need to seek to explore a more general approach to this problem and it
seems possible that such an approach might speed up the development of a body of
knowledge and experience in the field of the marketing of services.
Corey[26] pointed out: "modern techniques of merchandising (product planning),
advertising, and market research, for example, were widely applied in consumer goods
marketing before being used to any great extent in the industrial goods area", and it
would seem likely that the failure to apply these techniques in industrial marketing
was partially because of their obvious inapplicability in many cases. At the time that
industrial marketing was developing as a separate subject, general theories of buyer
behaviour were hardly developed, and because of this the techniques of industrial
marketing had to be built up from slow and sometimes costly experience of individual
situations. It is hoped that by approaching the marketing of services through the
available general theories the time and cost of developing a body of effective techniques
may be reduced.

ACKNOWLEDGEMENT
The author is indebted to D. W. Cowell for constructive comments on early drafts of
this paper.

References
1. Wilson, A., The Marketing of Professional Services, New York: McGraw-Hill, 1972, p. 159.
2. Committee on Definitions, Marketing Definitions: A Glossary of Marketing Terms, American
Marketing Association, 1960, p. 21.
3. Smith, Anthony D., The Measurement and Interpretation of Service Output Changes, London:
National Economic Development Office, 1972, p. 10.
4. Kotler, Philip, Marketing Management, Englewood Cliffs, New Jersey: Prentice-Hall, 1st edition,
1967.
5. Kotler, Philip, Marketing Management, Englewood Cliffs, New Jersey: Prentice-Hall, 2nd
edition, 1972.
6. Stanton, William J., Fundamentals of Marketing, New York: McGraw-Hill, 2nd edition, 1967.
7. Converse, Paul D., Huegy, Harvey W., and Mitchell, Robert V., Elements of Marketing, London:
Pitman, 6th edition, 1958.
8. Wilson, op. cit.
 The Marketing of Services | 145

9. Wilson, op. cit., pp. 6-9.

10. Stanton, op. cit., pp. 572-574.
11. Kotler, op. cit., 2nd edition, pp. 870-2.
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P.M.
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Holt, Rinehart & Winston, 1968, p. 11.
17. Cox, Donald F., (editor), Risk-Taking and Information Handling in Consumer Behavior, Boston
Division of Research, Graduate School of Business Administration, Harvard University, 1967,
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18. Howard, et al, op. cit., p. 17.

19. Robinson, Patrick J., Faris, Charles W., and Wind, Yoram, Industrial Buying and Creative
Marketing, Boston: Allyn & Bacon, 1967, p. 156.
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Marketing", British Journal of Marketing, Vol. 4 No. 1, Spring 1970, p. 19.
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23. Wilson, op. cit., p. 23.
24. Cox, op. cit., pp. 5-6.
25. Cox, op. cit., pp. 54-65.
26. Corey, Raymond E., Industrial Marketing: Cases and Concepts, Englewood Cliffs, New Jersey:
Prentice-Hall, 1962, p.v.
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