Determining advertising budgets for service enterprises

Abstract

While numerous classifications have been proposed to differentiate goods from services, equivalent research on classification systems that could be used both for goods and services has not been explored. Today, in many instances, consumers can select either a physical good or a service to fulfill their needs. Consequently, marketers of services may gain strategic insights by investigating the similarities between goods and services as well as differences. Presents a unified taxonomy that classifies services into convenience, preference, shopping and specialty categories according to customer perceptions of perceived risk, purchase effort and involvement. For this study, 168 subjects evaluated eight services that represented the four categories. Results indicate that this classification system may be as useful in categorizing services as it has been for categorizing goods. Findings suggest that examining services from a consumer point of view offers alternative strategies for the service provider. The level of risk, purchase effort and involvement varies among types of services, not just between services and goods. Therefore, service managers are advised to examine their service from a consumer perspective to identify potential competitors and design effective marketing strategy.

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