Handbook of Service Business
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Handbook of Service Business

Management, Marketing, Innovation and Internationalisation

Edited by John R. Bryson and Peter W. Daniels

Service business accounts for more than 75 per cent of the wealth and employment created in most developed market economies. The management and economics of service business is based around selling expertise, knowledge and experiences. This Handbook contributes to on-going debates about the nature of service business and the characteristics of service-led economies by exploring disciplinary perspectives on services, services and core business processes and the management of service business. A series of case studies are also provided. The volume pushes back the frontiers of current critical thinking about the role of service business by bringing together eminent scholars from economics, management, sociology, public policy, planning and geography.
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Chapter 7: The three-stage model of service consumption

Rodoula H. Tsiotsou and Jochen Wirtz


In addition to simultaneous production and consumption and the customer’s participation in the service production, process is one of the main characteristics of services (Gronroos 2000a). Services are produced in a process wherein consumers interact with the production resources of the service firm . . . the crucial part of the service process takes place in interaction with customers and their presence. What the customer consumes in a service context is therefore fundamentally different from what traditionally has been the focus of consumption in the context of physical goods. (Gronroos 2000b, p. 15) The consumption of services has been considered as ‘process consumption’ (Gronroos 1994) because production is part of service consumption and is not simply viewed as the outcome of a production process, as is the case in the traditional marketing of physical goods. The service-dominant logic also supports that service should be defined as a process (rather than a unit of output) and refers to the application of competencies (knowledge and skills) for the benefit of the consumer. Here, the primary goal of a business is value co-creation as ‘perceived and determined by the customer on the basis of value-in use’ (Vargo and Lusch 2004, p. 7).

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