Service products and productization

Abstract

Many services are difficult to understand and communicate, and as a result, difficult to position, differentiate, and sell. While important, understanding services as well-defined products has hardly received research attention although doing so offers a host of potential benefits. This conceptual article makes the following contributions. First, it synthesizes the literature to develop a better understanding of service productization as a process that transforms variable, ad-hoc services and service products into well-defined service products (i.e., ‘productized services’). Second, it advances that well-defined service products are (1) specified (i.e., have a formalized value proposition and are configured, standardized, systemized, and often also modularized and bundled), (2) branded (i.e., have a name, symbol, or design, and are identifiable by these linguistic, visual, and tangible cues), (3) and priced (i.e., have clearly stated, communicated, and committed prices that can include rate fences and tiering). Third, this article advances managerial practice by exploring the concepts and tools available to productize services and outlining managerial benefits and potential drawbacks of highly productized services.