Literature Review
The second chapter of my project proposal aims at examining both theoretical and empirical studies in two fields: the specific nature of services and branding in the service sphere. The basis for the research proposed is provided by a large body of literature.
The first part of this chapter will be devoted to the nature of services. This subject has been analyzed and discussed by the leading scholars, experts and intellectuals. Therefore there are numerous books and articles devoted to the researched issue.
The current history of development of marketing in the service sector goes back to the second half of 20th century when Rathmell (1974) introduced one of the first models of services marketing. The model offered by Rathmell was the first attempt to point at the differences between marketing in the service sphere and in the goods market. It should be noted, this model was not quite so neat. Later, in 1976 two French theorists, Eiglier and Langeard, presented their model – “Servuction” (1976). As opposed to Rathmell’s model, which was focused on simultaneity of production and consumption of services, the “Servuction” was focused on intangibility of services.
“Servuction” has gained a number of followers. One of them was Gronroos – the most famous representative of the marketing Nordic School. Gronroos and his colleagues introduced such terms as: “internal marketing”, “service quality” and “interactive marketing” (2000). According to K. Grenrusa, the purpose of interactive marketing is creation and maintenance of the quality service standards. It is impossible to overestimate the extraordinary importance of the introduction the concept of interactive marketing. Gronroos shed a new light on the issue of the specific nature of services. It should be noted, that at the same time similar concept was developing by Philip Kotler.
It is necessary to emphasise how much has been done by Parasuraman, Zeithaml, Berry. They developed the Gaps Model of service quality (Parasuraman, Zeithaml, Berry, 1985). In 2004 this model was supplemented by Zeithaml and Bitner.
Finally, it is exceedingly important to acknowledge the contribution of the renowned scholar, Christopher H. Lovelock (2005). This scholar has had an enormous effect over theoretical thinking about the general field and facilitates understanding the features of marketing in the service sphere. “8P” model (Lovelock and Wirtz, 2007, pp. 23), which was created by Lovelock, became the standard in the field of services marketing. 8P model most fully reflects the specific nature of services.
The 8Ps of services marketing are defined as follows:
Product elements
Place and Time
Price and Other User Outlays
Promotion and Education Process
Physical Environment People and
Productivity and Quality
The second part of this chapter is deal with branding in the service sphere. At present there are numerous articles, books and researches which are devoted to brand and brand management. The term “brand management” emerged in 1931. Since that time the problem of brand management has been at the heart of numerous discussions among theorists and experts for a considerable period, so that is why there exist quite different approaches and ideas connected with brand management. However, the problem of branding in the service sphere tends to be little discussed in the literature. Our knowledge of this issue is far from being comprehensive. Nevertheless, this problem is presented in a few papers and books of experts and renowned scholars.
It should be noted, that there are no books and articles devoted only to the branding in the service sphere. Therefore it is rather difficult to make the critical evaluation of the theories. The author of this paper could only present some books in which there are several chapters devoted to creation a strong brand in the service sector.
The book, written by Christian Gronroos will be evaluated. In “Service management and marketing” (2007) are presented some technologies which could help to create a strong brand. However, the problem needs a lot of further investigation, because Cristian Gronroos is focused on the specific nature of services but not on the creation the strong brand in the service sphere. Gronroos considers brand only as on of the tools of brand management in the service sphere. It should be noted, that Lovelock’s book “Services marketing” (2004) and Beckwith’s book “Selling the Invisible: A Field Guide to Modern Marketing” facing with the same problems.
There are only several researches devoted to the branding in the service sector. The author of this work wants to present the most popular of them. In 2000 Kim and Mauborgne (hereafter K&M (2000)) have suggested that there are just six drivers5 of 'utility' or consumer benefit that services are capable of providing: productivity; simplicity; convenience; risk reduction; fun and enhanced image; environmental friendliness. Then in 2006 as the result of the research of Burton, J. and Easingwood, C. the six-lever K&M (2000) typology was found to be broadly supported, although the definitions of two of the levers were re-defined. The 'risk' lever was expanded to include elements of functional and social and psychological risk. The sixth lever 'fun and image' was re-named 'hedonic benefit' and expanded to encompass emotional benefits derived from consumers' sensory interpretation of data, including sub-components of image, emotional benefit and sensual or sensuous benefit. Another research which deserves attention is connected with the identification of “Internal brand factors driving successful financial service brands” (De Chernatony, L and Cottam,S, 2006). The main shortcoming of this research is limitation by one (specific) market.
It is evident that there are numerous books, articles and researches devoted to the specific nature of services, at the same time the issue of branding in the service sphere needs a lot of further investigation.