Service Positioning through Structural Change

Author(s): G. Lynn Shostack

Source: Journal of Marketing, Vol. 51, No. 1 (Jan., 1987), pp. 34-43
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1251142
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 G. Lynn Shostack

Service Positioning Through

Structural Change
The basis of any service positioning strategy is the service itself, but marketing offers little guidance on
how to craft service processes for positioning purposes. A new approach suggests that within service
systems, structural process design can be used to "engineer" services on a more scientific, rational basis.

W HEN a firm or provider establishes and main- uct may be changed in order to change its market po-
tains a distinctive place for itself and its offer- sition, as the Jeep was altered physically from a military
ings in the market, it is said to be successfully posi- vehicle to a vehicle for the family market.
tioned. In the increasingly competitive service sector, Services are not things, however. McLuhan (1964)
effective positioning is one of marketing's most crit- perhaps put it best and most succinctly more than 20
ical tasks. years ago when he declared that the process is the
For some marketers (e.g., Ries and Trout 1981), product. We say "airline" when we mean "air trans-
positioning is strictly a communications issue. The portation." We say "movie," but mean "entertain-
product or service is a given and the objective is to ment services." We say "hotel" when we mean "lodg-
manipulate consumer perceptions of reality. As Love- ing rental." The use of nouns obscures the fundamental
lock (1984) rightly points out, however, positioning nature of services, which are processes, not objects.
is more than just advertising and promotion. Market As processes, services have many intriguing char-
position can be affected by pricing, distribution and, acteristics. Judd (1964), Rathmell (1974), Shostack
of course, the product itself, which is the core around (1977), Bateson (1977), and Sasser, Olsen, and
which all positioning strategies revolve. Wyckoff (1978) were among the first to ponder the
Apart from promotion, pricing, and distribution, implications of service intangibility, service perisha-
the product is indeed a critical, manageable factor in bility, production/consumption simultaneity, and
positioning. Products often are engineered explicitly consumer participation in service processes. They found
to reach certain markets, as the original Mustang was that traditional marketing, with its goods-bound ap-
designed to reach the youth market and light beer was proaches, was not helpful in process design, process
created to tap the calorie-conscious consumer. Some- modification, or process control.
times products are invented first and positioned after- If processes are the service equivalent of a prod-
ward. The Xerox copier and the Polaroid camera are uct's "raw materials," can processes be designed,
examples of products that were first created, then po- managed, and changed for positioning purposes the
sitioned to various markets. Finally, an existing prod- way physical goods are? The purpose of this article is
to take a closer look at processes as structural ele-
ments and suggest some ways in which they can be
"engineered" for strategic service positioning pur-
G. Lynn Shostack is Managing Director, The Coveport Group, Inc.
poses.

Journal of Marketing
34 / Journal of Marketing, January 1987 Vol. 51 (January 1987), 34-43.

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 Process Characteristics Apart from complexity, however, some processes
include a high level of executional latitude and others
Processes have been studied for some time in disci-
do not. The degree of freedom allowed or inherent in
plines other than marketing. Systematic, quantified a process step or sequence can be thought of as its
methods for describing processes have been devel- divergence. A highly divergent service thus would be
oped in industrial engineering (Deming 1982), com- one in which virtually every performance of the pro-
puter programming (Fox 1982), decision theory (Hol- cess is unique. A service of low divergence would be
loway 1979), and operations management (Schroeder one that is largely standardized.
1981), to name a few examples and well known au- Every service can be analyzed according to its
thors in each field. Though their techniques and no-overall complexity and divergence. A physician's ser-
menclatures may differ, process-oriented disciplinesvices, for example, are highly complex. They are also
share certain basic concepts. First, each of them pro-
highly divergent. As the service is being performed,
vides a way of breaking any process down into logical
a doctor constantly alters and shapes it by assimilating
steps and sequences to facilitate its control and anal-
new data, weighing probabilities, reaching conclu-
ysis. Second, each includes ways to accommodate moresions, and then taking action. Every case may be han-
variable processes in which outcomes may differ dledbe- differently, yet all performances may be satis-
cause of the effects of judgment, chance, or choice factory from the consumer point of view. Architecture,
on a sequence. Finally, each system includes the con-
law, consulting, and most other "professional" ser-
cept of deviation or tolerance standards in recognition
vices have similarly high divergence (as well as high
that processes are "real time" phenomena that do complexity),
not because they involve a considerable
conform perfectly to any model or description, amountbut of judgment, discretion, and situational ad-
rather function within a band or "norm" of some sort.
aptation.
Little process description can be found in market-However, a process can be high in complexity and
ing literature. However, several writers on services low in divergence. Hotel services, for example, are a
have drawn upon manufacturing sources in usingcomplex the aggregation of processes, but hotels stan-
words "standardized" and "customized" to define the dardize these processes through documentation and
poles of a process continuum (see Levitt 1976; Lov- establishment of executional rules for every sequence
elock 1984). "Standardized" usually implies a non- from room cleaning to checkout. Telephone services
varying sequential process, similar to the mass pro- are also highly complex, yet telephone companies have
duction of goods, in which each step is laid out in standardized and automated them to ensure uniformity
order and all outcomes are uniform. "Customized" and achieve economies of scale.
usually refers to some level of adaptation or tailoring Services also can be low in complexity but high
of the process to the individual consumer. The con-in divergence. In process terms, a singer renders the
cept of deviation usually is treated as a quality issue,service of entertainment in one step: sing. This service
in reference to services that do not perform as theyis infinitely divergent, however, because each exe-
should. cution is unique and unlike that of any other provider.
A painter "merely" paints, a teacher simply "trans-
mits knowledge," a minister "spreads the gospel."
Complexity and Divergence These services do not consist of orderly, mechanical
Extracting from various approaches, we can suggest procedures, but of unique performances. Services that
two ways to describe processes. One way is according involve interpretative skills, artistic crafting, or highly
to the steps and sequences that constitute the process; individualized execution often appear simple in pro-
the other is according to the executional latitude or cess terms, yet are highly divergent in operation. In
variability of those steps and sequences. Let us call fact, for such services, defining "what" is done in
the first factor the complexity of the process and the process terms is often easier than describing "how" it
is done.
second its divergence. Deviation, a real-time operat-
ing factor, can then be thought of as an inadvertent
departure from whatever process model and standards
have been established for the first two factors.
Blueprinting Complexity and
We can define a service's complexity by analyzing Divergence in Service Systems
the number and intricacy of the steps required to per- Though processes can be reduced to steps and se-
form it. Accounting, for example, is more complex quences, services must be viewed as interdependent,
than bookkeeping because accounting is a more elab- interactive systems, not as disconnected pieces and
orated process, involving more functions and more parts. One approach for visualizing service systems is
steps. Architecture is more complex than plumbing. a mapping technique called "blueprinting" (Shostack
Plumbing is more complex than lawn mowing. 1984a,b). Blueprinting is a holistic method of seeing

Service Positioning Through Structural Change / 35

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 FIGURE 1 in working out position strategies based on process.
Park Avenue Florist Figure 1 shows how one Park Avenue florist's ser-
vice appears in blueprint form. The "fan" is borrowed
from decision theory (see Holloway 1979) in which a
fan attached to a circle is used to show a range of
Line of Visibility
potential events that may occur, whereas a fan at-
tached to a square denotes a range of potential actions
that may be taken. This is a useful symbol for diver-
gence and is used throughout the following illustra-
Tal Sct Select S / DelHver Collct
Order Cont lnr Floer* Pace Flowers Payment
tions. The florist provides a service of low complexity
TI:f~~ f Cotr I~n in Container
that is highly divergent. Though the process steps are
few, the fans indicate broad executional latitude stem-
E Container Invento JfFl1ower Inventor- - -Facillitating Goods & Services ming from the judgment and decisions of the individ-
ual performing the service.
For comparison, Figure 2 illustrates a complex but
in snapshot form what is essentially a dynamic, living standardized service-consumer installment lending
phenomenon. at a large commercial bank. Here, the process has many
For process design purposes, a blueprint should more specific steps, but the steps are executed in a
document all process steps and points of divergence strict and unvarying manner. As Levitt would say, the
in a specific service. This documentation must be car- service has been "industrialized" (1976). There is one
ried to whatever level of detail is needed to distin- and only one permissible manner and order in which
guish between any two competing services. In other the service is provided. Parts of the process have been
words, specific blueprints of real services are more automated for further conformity, and the bank's de-
productive than generic or generalized visualizations sign for this service does not allow employees who

FIGURE 2
Installment Lending: Bank X

Loan application

36 / Journal of Marketing, January 1987

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 FIGURE 3
General Practitioner Services

Line of Visibility ,

Facilitating Goods & Services

rlab Services rPrescriptionI r Pharmacy I r Specialst 1 r Hospital
La _ Sev L cDrugs Services J L Services Services

are part of the service system to modifyvice

or concepts.
change As Schneider and Bowen (1984) pointed
the
service in any way. Such a service may not
out, function
regardless of whether consumers are privy to or
perfectly at all times. However, as noted evenbefore,
aware of all parts of the process, their awareness
such
quality failures represent deviation from of a its resultsstan-
design and evidence makes them potentially
dard, whereas true divergence is an integral part of in the design of the entire sys-
valuable participants
the process. tem, not just those parts they see.
Figure 3 shows yet another structure-the highly
complex and highly divergent service of a general Changing the Process
medical practitioner. Here, not only is the process
Complexity and divergence are not fixed and immut-
complex, but virtually every step involves variable
execution. able. They are factors that can be changed. Once a
service has been documented accurately, it can be
Blueprints as a Tool in Consumer Research analyzed for opportunities either to increase or de-
crease one or both variables.
It may be noted that this analytical approach is a use-
ful and natural companion to market research. Love- Alternative Directions for Structural Change
lock (1984) noted the difficulty of researching service
A change in overall complexity or divergence gen-
"attributes" for positioning purposes, which is caused
erally indicates one of four overall strategic direc-
at least partly by the inherent ambiguity and subjec-
tions. Each one has management consequences as well
tivity of verbal descriptions. Blueprints provide visi-
as certain market risks.
ble portraits to which consumers can react, and which
can facilitate exploration of more parts of the service Reduced divergence. Reducing divergence leads
system than just its processes. Blueprints can be used to uniformity which tends to reduce costs, improve
to educate consumers, focus their evaluative input on productivity, and make distribution easier. It usually
various aspects of the service system, elicit compar- indicates a shift to a volume-oriented positioning
ative or competitive assessments, and generate spe- strategy based on economies of scale. The positive
cific responses to contemplated changes or new ser- market effects of such a move can include perceived

Service Positioning Through Structural Change / 37

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increases in reliability-more uniform service quality borrowed from women's beauty salons, such as tint-
and greater service availability. However, reducing ing, body perms, and backcombing, redefined their
divergence also can have negative market effects. It mission, and transformed "hair cutting" into "hair
dictates conformity as well as inflexibility in operat- styling"-a more complex, divergent service struc-
ing procedures. Customers may perceive the shift as ture. Hair styling tapped or created a new market seg-
one that lowers customization and limits their options, ment of men willing to pay substantially higher prices
and may reject a highly standardized service even if for a more elaborated process and carved a niche in
it costs less. the market through structural differentiation.
Increased divergence. Raising divergence is the In retailing, there are many examples of adding to
service equivalent of creating a "job shop." Greater the complexity of service systems. Supermarkets be-
customization and flexibility tend to command higher gan as specialty food stores and have added banking
prices. Increased divergence usually indicates a niche services, pharmacist services, flowers, books and
positioning strategy, dependent less on volume and magazines, and even food preparation to their basic
more on margins. The market can respond positively food retailing structure. In the fast-food industry, what
to such a shift if the service taps a desire for prestige, were once simple hamburger outlets have become
customization, or personalization. Here, too, how- providers of breakfast, dining room services, and even
ever, care is needed in making such a shift. A diver- entertainment. Retailing also affords many examples
gent service is more difficult to manage, control, and of reducing complexity, as evidenced by the emer-
distribute. Moreover, customers may not be willing gence of businesses specializing only in pasta, only
to pay the price that customization demands. in cookies, and only in ice cream.
For examples of lowered divergence, we need only
Reduced complexity. Reduced complexity usually
to look at professional services. Legal services, for
indicates a specialization strategy. As steps or func-
instance, have historically had both high complexity
tions are dropped from the system, resources can be
and high divergence. A consumer needing legal as-
focused on a narrower service offering (radiology, for
sistance first had to seek out and select an attorney,
example, versus general medical services). Narrowing
and was then dependent upon the variable perfor-
the service offering usually makes distribution and
mance of that individual. Over the past few years,
control easier. Such a service can be perceived posi-
however, this service has been repositioned through
tively by the market if the provider stands out as an
the actions of business-minded entrepreneurs who
expert. However, reduced complexity also can cause
perceived a market need for less complex, less diver-
a service to be perceived as "stripped down" or so
gent alternatives. The result has been the creation of
limited that its specialized quality is not enough to
legal "clinics" and chains that offer a limited menu
overcome the inconvenience or price of obtaining it.
of services executed uniformly at published rates. This
Reducing complexity can be competitively risky if other
repositioning not only has opened a new market for
providers continue to offer a broader, more extensive
full-service alternative.
legal services, but also has had and will continue to
have a profound effect on the positioning strategies of
Increased complexity. Higher complexity usually traditional law firms.
indicates a strategy to gain greater penetration in a A similar downshifting and repositioning of tra-
market by adding more services or enhancing current ditional personal accountant services was effected by
ones. Supermarkets, banks, and retailers have ex- the innovations of H & R Block, which tapped a vast
panded their service lines with this strategic goal in market of consumers who did not require the variable
mind. Increasing complexity can increase efficiency and costly services of a personal accountant, but who
by maximizing the revenue generated from each cus- were willing to pay someone else to prepare their tax
tomer. In contrast, too much complexity can be con- returns.
fusing to customers and can cause overall service quality
Most of these examples are based on entrepreneu-
to fall. Thus, a highly complex service system may rial response to the perception of an unmet market need.
be vulnerable to inroads by competitors who special- What is perhaps less clearly recognized is that such
ize.
changes need not be intuitive or accidental. They can
be made deliberately to support explicit positioning or
Marketing Strategy and Structural competitive strategies.
Change
Service industries offer numerous examples of changes
Implications of Service System
in complexity and divergence and how they affect
market position. Barbering, for example, is a rela-
Changes
tively simple service, but beginning in the 1970s some Let us assume that Figure 1 is an accurate represen-
providers began to reposition it. They added processes tation of a specific florist's service. Assume further

38 / Journal of Marketing, January 1987

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that in an analysis of competitors, very similar struc- in Figure 1-a highly artistic, high-priced structure.
tures were found. One strategic option to reposition Alternatively, a marketer might choose to increase
and differentiate the service would be to re-engineer complexity alone, through retailing a selection of plants
it as a less divergent system. Figure 4 illustrates a and supplies, or to increase both complexity and di-
redesigned blueprint that accomplishes this objective. vergence by offering flower arranging classes.
The number of container choices has been limited to
two; there are only two groups of flowers and only Identifying and Evaluating Strategic Choices
two choices of arrangement for each group. Thus, onlyServices can be structurally evaluated on a stand-alone
eight combinations are possible. basis and also as members of service families. Within
Obviously, the new design has implications for in-
a service family, a marketer can consider positioning
ventory management as well as productivity. Inven- strategies based on structural complementarity, struc-
tory can be ordered in larger, more economic quan- tural diversity, and overall developmental direction.
tities. More arrangements can be produced by the florist In Figure 2, a bank's consumer installment lend-
because the process is more standardized. These two ing service is diagrammed. This service, of course, is
only one of a constellation of services that constitute
effects will lower prices and potentially allow the ser-
vice to be repositioned to a broader market. The new consumer banking. Though consumer banking, in its
structure also will allow wider service distribution,totality, is an extraordinarily complex service system,
because simpler blueprints are easier to replicate. FTD
most blueprints of its component services would show
(Florists' Transworld Delivery) arrived at a similar low divergence stemming from 20 years of effort to
conclusion and expanded florist services from a localstandardize and automate the service system.
craft into a national service industry. One strategy for a bank with this structure is to
continue increasing complexity by adding more sub-
However, if all the florists in a particular market
services while continuing to minimize divergence
had structures similar to Figure 4, a logical position-
ing strategy might be to move toward the design shownthrough standardization and automation. For a com-

FIGURE 4
Florist Services: Alternative Design

Flowers

m m m m m m m m mm m m m m m m m
Line of Visibility
m m m m m m m m m m m m m m m m m m m m m m m m

Select Select P. Flowers... Deliver Collect

Container Flowers i Continer Payment
in Container Payment

[nen
_ _ l A
toy]
0 .:_
[nventor
s~~~~~~~
raciiiiaiinyg uuuo a IerVlces

Service Positio

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petitor, an equally valid strategy would be to adopt closer to the position held by diagnosticians, who per-
the counterposition, which would call for increasing form no treatment themselves. At the extreme posi-
the customization of services. The latter strategy is tion, complexity and divergence could be lowered to
evident in banks offering "private" banking, an in- the point where only the simple service, such as X-
tegrated package of services for the upscale market rays, is provided in a completely standardized way.
that includes such divergent services as customized Consumer research can be instrumental in facilitating
lending, portfolio management, and financial plan- this strategic process, and blueprints are a useful tool
ning. for focusing consumer input and response to new
The general practitioner previously described also structural concepts.
has numerous strategic choices. Figure 5 illustrates the In simplified terms, Figure 7 shows some changes
relative structural positions held by a number of med- that a midpriced family restaurant might consider to
ical service providers, including the general practi- alter complexity and divergence for competitive pur-
tioner analyzed in Figure 3. From the present posi- poses. Any prospective change or mix of changes can
tion, he/she can move in any direction on the scale be compared with competitors' offerings to determine
by adding or deleting service functions to create a new which mix is most likely to provide the maximum
family. Depending on the complexity and divergence competitive differentiation.
of these functions, the overall service system's com- Positioning charts are a useful tool for market an-
plexity and divergence will change, thus altering its alysts wishing to compare the perceived performance
relative position. of competing services on two or three attributes si-
For example (Figure 6), retailing orthopedic sup- multaneously. Examples of such charts (also known
plies would add complexity to the doctor's overall ser- as perceptual maps) are given by Tybout and Hauser
vice system, but little divergence. Adding counseling, (1981) and Lovelock (1984). Blueprinting works well
in contrast, would add considerable divergence, but in tandem with this technique by serving as a focal
little operational complexity. Conversely, if minor point for determining which parts of the service sys-
surgical procedures that have been performed in the tem or process components are important to the mar-
office were eliminated, the service system would be ket, and in evaluating change across many elements
reduced in both complexity and divergence and move of the system.

FIGURE 5
Relative Positions Based on Structural Analysis

HIGH COMPLEXITY

* Hospital Services
General Practitioner:
Forensic-Testing Lab Diagnosis & Treatment
* Specialist:
Treatment only

* Diagnostic
Services Only
LOW DIVERGENCE HIGH DIVERGENCE
* Outp tient Clinic: Limited
Treat nent; eg. Broken
Bone / Minor Burns only
* Retailer of
Orthopedic Supplies
Medical
Counseling
X-Ray Lab
LOW COMPLEXITY

40 / Journal of Marketing, January 1987

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 FIGURE 6 Role of Service Employees and Custom
Positional Shifts Through Structural Change
Considerable attention has been paid to peo
COMPLEXITY service system. Whether they are provide
sumers, the management and control of h
* Hospital
Services
* Adds retailing havior is a critical factor in process design
of supplies
and operating quality. Mills (1985) suggests
If *_j
_t - Adds Counseling agement controls over service employees s
I _
pend on the structure of the service system
Deletes /o&- General Practitioner
Office ( Figure 3) contact, standardized services, behavior ca
Treatment *
* Specialist:
trolled through mechanistic means, such as
Treatment Only regulations. However, for high-contact, dive
vices, Mills suggests that employee self-ma
* Diagnostic
Services Only and peer-reference techniques are more effect
and Houston (1983), in contrast, propose tha
based approach to managing customer and
DIVERGENCE
behavior can help to control expectations
process compliance. Bowen and Schneider (1
of "boundary spanners," that is, employees
customer interaction, as a valuable source
information and as change agents whose a
Implementing Change and commitment are critical to success in al
process. Schneider and Bowen (1984) as wel
Though processes are intangible, the means by which ers (Berry 1983; Heskett 1986) stress that
involvement and "internal" marketing to
services are rendered are very real. There are only two,
people (both providers and consumers) and facilitat-are important factors in ensuring successf
ing goods. Any shift in overall complexity or diver-operations. Deming (1982), however, argues
gence, or the introduction of any new process design,
behavior and motivation are controlled by
must be implemented with a clear understanding of of
the process itself and that if the process is
the potential impact on these "producers" of thedesigned,
pro- high motivation and effectivene
cess. the natural results.

FIGURE 7
Structural Alternatives

LOWER COMPLEXITY / DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCE

No Reservations - TAKE RESERVATION - Specific Table Selection

Self-seating. Menu on Blackboard 4 SEAT GUESTS, GIVE MENUS * Recite Menu: Describe Entr
Eliminate 4 SERVE WATER AND BREAD * Assortment of Hot Breads and Hors d'oeuvres
Customer Fills Out Form - TAKE ORDERS - At table. Taken Personally by Maitre d'
PREPARE ORDERS

Pre-prepared: No Choice 4 * Salad (4 Choices) - Individually Prepared at Table

Limit to Four Choices - * Entree ( 15 Choices) _ Expand to 20 Choices: Add Flaming Dishes;
Bone Fish at Table; Prepare Sauces at Table

Sundae Bar: Self-service 4 * Dessert (6 Choices) - Expand to 12 Choices

Coffee, Tea, Milk only 4 * Beverage (6 Choices) * Add Exotic Coffees; Wine List; L
Serve Salad & Entree Together: - SERVE ORDERS - Separate Course Service: Sherbet Between
Bill and Beverage Together Courses; Hand Grind Pepper
Cash Only: Pay When Leaving 4 COLLECT PAYMENT * Choice of Payment
Serve Mints

Service Positioning Through Structural Change / 41

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 In terms of consumer participation, Lovelock and Unlike a product, a service cannot be engineered and
Young (1979), Chase (1978), Bateson (1985), and then made in a factory. "Producing" a service is a
others have discussed whether and how to involve dynamic, continuous event.
consumers in the service process, and the manage-
ment of their involvement. Chase argues that con- Conclusion
sumer participation should be kept to a minimum inThough our discussion focuses on process design, othe
the interests of greater process efficiency. However,elements of the service system can and do affect mar
as we have seen, process design offers many routes ket position. Advertising and promotion are, of course,
to market success. A service (self-service gasolinepowerful forces in the positioning process. American
stations, for example) can be designed for maximumExpress, for example, has repositioned its credit ser-
consumer participation and still be profitable. In fact,vices to women solely through advertising.
Bateson's (1985) work suggests that consumers can Distribution channels also affect market position.
be segmented on the basis of control needs, resultingMarketing stock brokerage through Sears stores is on
in services that are designed to capitalize profitablyexample of positioning a service to a new, broade
on the consumer's own desire for participation. consumer base through a change in distribution chan
These brief descriptions illustrate the richness andnels. Moreover, as Shostack (1985), Blackman (1985),
diversity of current thought about the human side ofand others have noted, various forms of physical ser-
service systems. Our purpose here is not to choose vice evidence, from the environment in which a ser-
one approach over another, but to underscore the factvice is rendered to the correspondence, brochures,
that people are just as important as structural design.signage, and even people to which a customer is ex-
If people issues are not addressed effectively, even the posed, can affect position. Facilitating goods also can
best design will fail. affect position, even without process change. A pro-
vider who substitutes limousines for taxicabs, for ex
Role of Facilitating Goods ample, may succeed in charging higher prices and tap
Facilitating goods are also important in structuralping a different market for exactly the sam
planning. Educational services, for example, can be transportation service.
rendered by a human being who lectures in a tradi- In short, the issues involved in service positioning
tional classroom setting. Education also can be ren- are numerous, and this discussion by no means en-
dered via videotape, television, computer, and book,compasses all of the subjects relevant to the position
to name just a few alternative facilitating goods. Foring process. In a structural sense, however, processes
the designer of a new or different educational service, themselves appear to have characteristics that not only
any of these choices will yield a different serviceaffect market position, but also can be deliberately and
structure. These structures will differ in complexitystrategically managed for positioning purposes. By
and divergence, as well as in cost dynamics, distri- manipulating complexity and divergence, a service
bution constraints, and market position. marketer can approximate some of the product anal-
Sometimes facilitating goods are used as a re-ysis and design functions that are traditional in prod
placement for human performance to reduce diver-uct marketing. Moreover, the use of blueprints pro-
gence. Computers are the prime example of a good vides a mechanism through which services can b
that has been used in this way to standardize service "engineered" at the drawing board, as well as a tool
systems. However, simplification is not the only usefor identifying gaps, analyzing competitors, aiding i
for technology. Technology also can be used to in- market research, and controlling implementation.
crease complexity and divergence. When bank auto- The marketplace affords evidence that both com-
mated teller machines first were introduced, for ex-plexity and divergence are concepts that are under
ample, they could deliver only simple cash dispensingstood and employed in service industries. Though th
and deposit services. Now, technology has allowedpractice is not formalized, it works. How much mor
the addition of funds transfer and investment services powerful the result might be if marketers brought
to the system, increasing its overall complexity. To- professional discipline, capable of crafting servic
morrow, what are called "smart" cards will make pos-systems on a rational basis, to bear on the service po
sible the delivery of a wide range of credit, payment,sitioning task!
and information services. Ultimately, technology may For managers in service industries, taking a struc
even make possible a degree of customization (i.e.,tural approach can help increase their control over som
divergence) that only human providers can now de-of the most critical elements of service system man
liver. agement. For marketers, process design may be a too
For all these reasons, the consideration of changesthat can substantially increase their impact and role in
to any service structure demands an appreciation ofthe service sector and help service marketing come o
the interrelatedness and intricacy of service systems.age.

42 / Journal of Marketing, January 1987

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Service Positioning Through Structural Change / 43

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