How should a goods/service continuum be defined?

In my dissertation ( Schirr 2008 ) I had in-depth discussions with thirty executives involved in service innovation in their organizations. One of them who had had a varied business career noted:

I’ve worked in a lot of different categories, and I’ve seen, you know, how traditional consumer companies, as well as a lot of B2B [goods] companies, constantly are innovating, testing and rolling out new products… I know what those models look like, and I can assure you the service industry is nothing like any of those.

He went on to note that the differences were clearer the “more pure” the service. There have been numerous articles about the differences between service and goods and several suggested continuums. The four standard differences between goods and service are (Zeithaml):

1. tangible/intangible, 
2. homogeneous/heterogeneous, 
3. inseparability/separability of consumption and production,
4. storability/perishability

Generally continuums of “service-ness” have focused on tangibility. That seemed the dimension most of my interviewees focused on. But for differentiating innovation processes all four dimensions would seem to be meaningful.

Take a concrete example: in the 83% of the US economy that is service, software is counted as a business service; yet computer processors with just as much information content are goods. This makes sense by the tangibility test: you can hold a chip in your hand; software can be downloaded. However if you compare packaged standard software, say MicroSoft Office, to a designer chip made for a specific customer, the chip would be more heterogeneous and arguably more inseparable from the use the customer has in mind. This extra customization and centrality to the customer use would likely lead to some of the differences seen in service innovation, especially more customer involvement in development.

Therefore “service-ness” to differentiate innovation processes may not be a simple one-dimensional continuum, but some sort of complex continuum with four dimensions.

I would value input from readers about which dimensions you view as most important for differentiating innovation in goods/services.

An emerging service-dominant logic of marketing (Vargo and Lusch 2004, 2006) argues that these four dimensions are totally invalid. I will do a followup posting in the next few weeks with my thoughts on how my subjects’ observations on the differences between goods and service innovation fit in this new theoretical framework where all products are service and all marketing is service marketing.