Improving ServicMarket Imperfections and the Targets-Instrument Approach to Financial Services Regulation

Abstract

Services are generally thought to be less tangible to consumers than physical goods, a trait which may create communication diffculties for sellers of service products. To accommodate the special nature of service products and the generally greaterper ceived risk associated with them, many scholars argue that services marketers need to stress factual information in their adver tisements. While this perspective has been advanced for years, little empirical research has been conducted to examine its adoption by practitioners. In this article we investigate the extent to which the advertisers of services emphasise specifically suggested factual information cues in their messages. Over 17,000 newspaper ads and 9,800 television ads were scrutinized to reveal that services advertisements do indeed provide various proposed factual cues and that their incidence increases as ser vice products become more intangible in nature.