Services vs. Non-Services

Services vs. Non-Services

Traditional Definitions

• Service: A process or activity that takes place in one spot.
• Non-Service: A physical commodity.

Key Differences

• Tangibility:

  • Services: Intangible; they cannot be touched and have no physical presence.
  • Non-Services: Tangible; there is a physical item to be held.

• Variability:

  • Services: Variable; they change each time they are delivered, making each instance different.
  • Non-Services: Standardized, making them easier to sell. (Example: Smith's chips are always Smith's chips regardless of the store.)

• Timing of Processes:

  • Services: Production, distribution, and consumption happen simultaneously and cannot be separated.
  • Non-Services: Production and distribution can be separated from consumption, allowing control over when production occurs.

• Storage:

  • Services: Cannot be stored; they happen at the moment of delivery.
  • Non-Services: Can be stored, allowing for the creation of a surplus.

• Transfer of Ownership:

  • Services: Cannot be resold or transferred to another owner.
  • Non-Services: Change of ownership is possible (e.g., selling a car).

Case Study: Bruce Willis vs. Apple (iTunes)

• Bruce Willis considered legal action against Apple over his iTunes collection.

• He wanted to pass his digital music collection to his daughters after his death.

• Users don't actually "own" the songs but rather buy a license to use them indefinitely.

• You are buying a license to use it indefinitely for $1.29$. You don't actually hold it like a CD.

• Apple allows account registration on up to five devices, but it remains your account.

• Upon the owner's death any music library amassed would be worthless.

• Chris Walton explains that people are surprised to learn that tracks and books bought over the years don't belong to them.

• Walton further expands by saying It’s only natural you would want to pass them on to a loved one.

• Willis is exploring setting up a family trust as the legal holder of his iTunes collection.

• Legal action could potentially change policies for users of iTunes and similar platforms like Amazon (which licenses Kindle book purchases).

Retailing and the Service Continuum

• Retailing itself is a service, providing access to various goods in one location.
• Products and services exist on a spectrum, rather than being entirely distinct.
  • Example: An airline is neither entirely product nor entirely service but falls somewhere in between.
  • Example: Fast food is partly a service because the "fast" aspect is part of the value.
• Most offerings exist on a continuum, blending elements of both products and services.