08832323.2014.988200
Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings in the
Marketing Classroom
Scott D. Roberts & Kathleen S. Micken
To cite this article: Scott D. Roberts & Kathleen S. Micken (2015) Marketing Digital Offerings Is
Different: Strategies for Teaching About Digital Offerings in the Marketing Classroom, Journal
of Education for Business, 90:2, 96-102, DOI: 10.1080/08832323.2014.988200
To link to this article: http://dx.doi.org/10.1080/08832323.2014.988200
Published online: 22 Dec 2014.
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Date: 11 January 2016, At: 19:09
JOURNAL OF EDUCATION FOR BUSINESS, 90: 96–102, 2015
Copyright Ó Taylor & Francis Group, LLC
ISSN: 0883-2323 print / 1940-3356 online
DOI: 10.1080/08832323.2014.988200
Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings
in the Marketing Classroom
Scott D. Roberts
Downloaded by [Universitas Maritim Raja Ali Haji] at 19:09 11 January 2016
The University of the Incarnate Word, San Antonio, Texas, USA
Kathleen S. Micken
Roger Williams University, Bristol, Rhode Island, USA
Digital offerings represent different challenges for marketers than do traditional goods and
services. After reviewing the literature, the authors suggest ways that the marketing of digital
goods and services might be better presented to and better understood by students. The wellknown four challenges of services marketing model (e.g., intangibility) first proposed by
Zeithaml, Parasuraman, and Barry (1985) is explored and adapted as an organizing
framework for digital offerings. The authors also present specific suggestions for
assignments and class discussions to foster students’ critical thinking about the marketing
implications surrounding digital offerings.
Keywords: digital goods and services, digital marketing, marketing pedagogy, teaching,
teaching strategies
When the U.S. economy shifted away from its manufacturing base, services marketing theory arose to help marketers
deal with the unique nature of the increasingly intangible
offerings (Berry 1980). More recently, the economy has
shifted again, driven by digital technologies. Not only have
products been digitized, but information and communication technologies have also made it possible to distance producers from consumers, both in space and time. Marketing
practice has responded to this environmental change, but
academic marketing thinking has not come as far.
We first became aware of the problem while teaching
MBA students concentrating in digital media management.
For their marketing management course, we used Kotler
and Keller’s (2009) Marketing Management. Kotler’s work
has arguably been one of the central repositories of marketing’s received theories and ideas. We quickly realized,
however, that the discussion of the digital offerings that
these students were so engaged with (film, music, and video
games) was lacking. A search of the marketing literature
revealed the reason why: there was considerable discussion
Correspondence should be addressed to Kathleen S. Micken, Roger
Williams University, Gabelli School of Business, Department of Marketing, 1 Old Ferry Road, Bristol RI 02809, USA. E-mail: [email protected]
of the impact of digital technology on marketing, but there
was much less about marketing strategies for digital goods
and services. This article begins to fill that gap by providing
an organizing framework for thinking about the marketing
of digital offerings as well as some practical suggestions
for how faculty might address digital offerings with their
students.
BACKGROUND: THE DIGITAL ECONOMY
AND THE MARKETING CLASSROOM
The digital sector is an important presence in the U.S. economy. It contributed 4.7% of the U.S. gross domestic product
in 2010 and will continue to grow “more than 10 percent a
year” (Dean et al., 2012, p. 8). Individuals are becoming
more connected, with up to one third of U.S. adults now
being always addressable (connected to the Internet most of
the day) across multiple devices, platforms and locations
(Forrester Research, 2012).
How has the marketing discipline responded? Our purpose here is not to suggest that there has been a dearth of literature about the impact of digital technology but rather
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MARKETING DIGITAL OFFERINGS IS DIFFERENT
that there are significant gaps in the literature about how to
address digital offerings conceptually. Pedagogical scholarship has resulted in proposals for changing the way classes
are taught (e.g., Askim-Lovseth & O’Keefe, 2012; Harrigan
& Hulbert, 2011), as well as suggestions for incorporating
digital marketing practices in the classroom (e.g., Clayton
& Hettche, 2012; McCorkle & McCorkle, 2012). There has
even been a call for “a radical redesign of the marketing
curriculum” (Wymbs, 2011, p. 93). What is missing, however, are pedagogical proposals for teaching about the challenges of marketing digital offerings.
The need to fill this gap comes not only from marketing
practice, but also from accrediting bodies. The 2013 Association to Advance Collegiate Schools of Business
(AACSB) standards mandate that business programs
include learning experiences that help students understand
the integration of information technology in business: “data
creation, data sharing, data analytics, data mining, data
reporting, and storage within and across organizations”
(pp. 30, 31).
Clearly, it is time to equip our students with tools for
understanding and embracing all things digital. And it is
time to equip faculty with the tools to do so. Faculty are
faced with students for whom digital offerings are pervasive, yet who need to learn how to market those offerings
strategically.
APPLYING A SERVICES MARKETING MODEL
TO DIGITAL OFFERINGS
With typical British humor, The Economist (n.d.) defines
services as “products of economic activity that you can’t
drop on your foot.” Services marketing scholars might
agree, as intangibility has been the primary defining attribute of a service (Shostack, 1977; Zeithaml, Parasuraman,
& Berry, 1985). The same can be said for digital offerings;
their fundamental defining feature is intangibility (e.g., Hui
& Chau, 2002; Lovelock & Gummesson, 2004).
Zeithaml et al. (1985) consolidated the intangibility
characteristic with other differences into the intangibility,
heterogeneity, inseparability, and perishability (IHIP)
framework to provide a conceptual basis for thinking about
the problems and strategies in services marketing. In this
study, we adopt a similar perspective with regard to digital
offerings: that the marketing of such offerings usually
requires different strategic approaches. We suggest that a
modification of the IHIP framework can provide guidelines
for the marketing of digital offerings. We begin with a
review of the IHIP framework. Next, we discuss the ways
in which digital offerings both fit within that structure, yet
are different enough to require adjusted marketing strategies. We also present example assignments that can spark
class discussion about digital offerings and the strategic
marketing implications.
97
With the IHIP framework Zeithaml et al. (1985) summarized four “unique service features and [the] resulting marketing problems” (p. 35). This framework “constitute[s]
today’s received wisdom [about the differences between
goods and services] in the broader academic marketing
community” and continue[s] to be “a unifying theme for
services marketing” (Lovelock & Gummesson, 2004, pp.
22, 25)1. The framework is as follows:
1. Intangibility
a. services cannot be stored,
b. services are difficult to protect with patents,
c. services are difficult to display/communicate
about,
d. services are difficult to price;
2. Heterogeneity
a. standardization and quality control of services
provision are difficult;
3. Inseparability
a. the consumer is involved in service production,
b. other consumers often involved in production,
c. centralized mass production is difficult;
4. Perishability
a. services cannot be inventoried.
This IHIP paradigm, however, did not anticipate digital
offerings. At its core, a digital offering is made up of data
files (recorded ones and zeros) stored on either the drives/
media of consumers or on the servers of marketers/facilitators (e.g., in the cloud). These files come together in the
form of solutions (bundles of benefits) for consumers.
Many traditional offerings have become available digitally
including maps, tax preparation, customer service, reference sources, higher education, and distance medical
consulting.
APPLYING THE IHIP FRAMEWORK TO DIGITAL
OFFERINGS
As economies move into the digital realm, definitions such
as The Economist’s (n.d.) foot-drop test are not so useful.
Digital offerings, while they cannot be weighed, often
either reside on physical media or require physical media to
access them. Unlike traditional broadcast media, such as
television and radio, which also required a physical device
for accessing them, digital offerings often can be more easily captured, stored and shared, for example saving a movie
on a digital video recorder or uploading content to a torrent
site. Thus, when applying the IHIP framework to digital
offerings, some significant differences arise, both in terms
of the features of the offerings as well as the attendant marketing challenges. Table 1 presents Zeithaml et al.’s (1985)
IHIP framework and highlights these distinctions, which
are discussed subsequently.
98
S. D. ROBERTS AND K. S. MICKEN
TABLE 1.
Intangibility, Heterogeneity, Inseparability, and Perishability Applied to Digital Offerings
Characteristic
Intangibility
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Heterogeneity
Traditional services
Cannot be held, stored; difficult to
communicate and price; intellectual
property challenges
Scaling challenges due to human agents
being different at the point of service
delivery
Inseparability
Inseparable from human provider; the
experience requires marketer presence
Perishability
Cannot be stored for later consumption
Digital offerings
Intangible but can be easily measured,
stored, transferred, communicated, and
priced
Because people are not involved in
delivering the core offering, digital
offerings can theoretically be designed to
be perfectly homogeneous.
Inseparable from delivery systems, such as
hardware, software, and peripherals
Because they are kept and delivered via
storage media, they are not perishable
(though file maintenance can be an issue)
Intangibility
In the traditional paradigm, “most services cannot be seen,
touched, held, or put on a shelf” (Fisk, Grove, & John,
2014, p. 9). Among the challenges typically associated with
intangibility is depicting a service in marketing communications (how to tangibilize a service) and the inability of
consumers to examine a service in advance of delivery.
Intangibility—digital. As discussed previously, a digital offering also meets this definition, as, at its core, it is not
tangible. Nevertheless, the issues that are identified as problems for services are not necessarily problems for digital
offerings:
a. A digital offering is electronically stored, thus the
“cannot be stored” challenge of marketing services
becomes a non-issue in the digital realm, assuming
access to sufficient storage resources.
b. Because digital offerings are driven by software (see
also the subsequent inseparability discussion), the
code underlying the service can be protected—by
copyright rather than by patent, typically (see Wen,
Forman, & Graham, 2013).
c. Digital offerings are displayed and communicated
quite well in digital format (apps, company websites,
and blogs).
d. Price setting is no more a challenge in digital offerings than in most marketing exchanges.
Intangibility, however, does not give rise to the kinds of
issues Zeithaml et al. (1985) identified for services. Instead,
the intangibility is often an advantage that can be exploited
in the ways addressed previously, as the following assignments illustrate.
Digital intangibilty in the classroom. Faculty can
assign students to evaluate both a traditional service
Examples
Files stored on a hard drive or in the cloud
Zillow delivers the same information to all
viewers, but search allows for
customized presentation of results
Pandora (streaming radio) cannot be
experienced without hardware and
software
Automatic backup systems
offering (e.g., a meal in a restaurant or an oil change)2 and
a digital offering (purchasing an app for one’s phone or
new software—even a computer game). What factors made
the offerings either easy or difficult to evaluate in advance
of purchase? Was one easier to assess than another? If so,
why? How did the tangible elements and visual cues of
each contribute to evaluating the intangible elements? How
do the strategic implications for marketers of each offering
differ? This last question allows a faculty member to
address the issues of storing the offering, of protecting it
from being copied by competitors, of communicating with
customers, and of pricing.
If students meet in a computer classroom, an additional
assignment could ask them to review websites with a focus
on user interface design strategies. (In a traditional classroom the assignment would require screen shots.) In this
instance, the discussion would revolve around how the digital presentation facilitates the display of and communication about the offering and how that display might be
customized, using cookies, for returning versus new visitors
(part of the heterogeneity issue considered next).
Heterogeneity
Also called variability, this challenge refers to the difficulty
of standardizing service delivery quality (Fisk et al., 2014).
One of the problems this characteristic creates for services
marketers is a difficulty of scaling up, due to the difficulty
of creating a consistently great service across time, locations, situations, and employees.
Heterogeneity—digital. Digital offerings are often
delivered through the web or through mobile applications.
They are based on repeated execution of computer code
and thus do not exhibit the problem of inconsistency associated with human-based services delivery. For example, Zillow, a free online real estate database service, requires
minimal to no interaction between the company and the
MARKETING DIGITAL OFFERINGS IS DIFFERENT
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end users. To the extent that the digital offering is delivered
without the intervention of human beings, marketers
increasingly have the ability to decrease or eliminate heterogeneity in the offering:
a. Standardization is only challenged by the need of
consumers for a customized offering and lack of hardware and operating system standardization. Standardization and quality control can be built into the
creation and delivery of digital offerings because the
delivery of digital offerings is closely tied to software
code, which does not vary (the very definition of
homogeneity). If standardization is well thought
through in advance, quality control need not be an
issue. This is particularly true of digital consumption
that does not require human marketer involvement,
such as streaming a movie on a tablet.
Consistency in software execution can produce a consistent outcome at the consuming end of the process.
Strategic thinking and thorough beta testing of consumer
applications are the keys to homogeneity in the provision
of digital offerings. There is, however, a significant heterogeneity/variability challenge associated with the delivery of digital offerings that is inextricably tied to the
devices needed to access those offerings. Browsers,
screen resolution, and operating systems have always
been a challenge for the consistency of web-based delivery. With the advent of smart phones and tablets, however, the potential heterogeneity of user experience has
expanded and the term responsive design has entered the
digital design lexicon.3
Digital homogeneity in the classroom. Faculty could
ask students to compare the experience of using cell phones
(or tablets) with different operating systems. The discussion
should expand beyond the user experience to address strategic issues. What is required of a developer to ensure that the
user experience is the same across all the different phones?
Does the limited human interaction suggest an even stronger requirement for planning and testing of the user interface—and of the efficiency of the coding to reduce
transmission costs? Is it important that the user experience
be similar across all platforms? Consider asking students to
compare working with Microsoft Office products on a Mac
versus on a PC. Is the transition seamless? If not, what are
the consumer implications? The assignment can be taken
further to address the responsive design issue: How important is it for companies to ensure that the content is experienced in the most optimal way, regardless of the device a
customer uses: desktop, laptop, tablet, smartphone, television, or video gaming console?
An extension of the assignment would be to ask students to share the ways in which they have customized
their phones. In traditional services marketing literature,
99
service providers strive for standardization to ensure
quality control. In what ways does the provision of digital offerings require both standardization and
customization?
Inseparability
In the traditional marketing services literature, inseparability means that “for most services, the production and consumption of the service occur simultaneously” (Fisk, Grove
& John 2014, p. 10). Fisk, et al. also note that the consumer
is sometimes a co-producer of the experience—in the way
an audience is important to the production of live theatre.
This characteristic has also been termed simultaneity.
Inseparability—digital. With digital offerings, the
inseparability comes not from the inability to separate the
offering from the (human) provider, but rather from the
inability to separate the digital offering from some sort of
tangible delivery device. A core digital offering cannot simply be consumed on its own. Consumer usage requires aiding devices (hardware), operating systems (firmware) and
applications (software). For example, in order to watch a
previously-recorded television show (ones and zeros on a
hard drive), the consumer must at a minimum have a viewing screen, hardware (the box, laptop, tablet), software, the
underlying operating system, the computer code that
accesses the recording, Internet access, if applicable, the
ability to interface with the machine and choose the programming (touchscreen, mouse, remote), a sound system
(speakers, headphones, earbuds), and a power source. Thus,
digital offerings still have the inseparability characteristic;
it is just that the characteristic is expressed in a different
fashion and gives rise to different marketing challenges:
a. There is no need for consumers to be involved in the
production of digital offerings. The provider and the
technology allow the offering to be produced (the
coding) and later consumed without a synchronous
marketing presence. For example, LegalZoom provides a variety of documents and services that do not
require interactions with an attorney.
b. Consuming digital offerings does not require the presence of other consumers. Neither does the presence of
other consumers interfere with an individual’s consumption of the offering. Watching a movie downloaded from Netflix means that he or she does not
have to put up with other people talking during the
show. It is possible to shop online without interference from other customers.
c. One of the major differences that digital offerings
demonstrate is that they are highly scalable, as the
only limiting factor is the bandwidth of the producer
(server size or capacity and transmission speed, in
particular). So the need to centralize mass production
100
S. D. ROBERTS AND K. S. MICKEN
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around employees is eliminated unless it is a live service delivered digitally, such as online customer service, for example, via Twitter or chat. When scaling
up is unrelated to human resources, the need for
strong employee training is not an issue. The ability
for marketers to scale up is theoretically unlimited.
Consumption of core digital offerings is tied to devices—televisions, radios, PCs, laptops, tablets, phones, and
video game consoles. It is acknowledged that in precomputer times, analog offerings (radio and television broadcasts, recorded music) were also tied to devices, but not to
the degree that digital offerings are. As discussed under heterogeneity, this inseparability issue goes beyond the question of Mac or PC. Operating system issues now include
Android, IOS, and Windows Phone, as well as questions of
screen-view optimization (Stokes, 2011).
Digital inseparability in the classroom. Faculty can
begin by asking students to identify the companion products that one needs to access digital content. In what ways
do the size, ease of use, speed, battery life, and durability of
these devices enhance or detract from the consumption of
the offering? What about the fragmentation of devices to
access the same digital content? What new digital offerings
have arisen to help ameliorate that issue—such as cloudbased storage services (e.g., Google Drive, iCloud, DropBox, OneDrive) that facilitate access to one’s content?
How important is it that such offerings be platform agnostic? From a strategic perspective, what are the implications
of the always addressable consumers, who use multiple
devices throughout the day? How do marketing communications need to adapt? A related consideration is the three
(or four) screen issue, of consumers accessing digital content via television, via computers, and via mobile devices,
sometimes using two (or more) of these simultaneously.
Perishability
“Most services. . . exist only at the time of their production”
(Fisk et al., 2014, p. 11). This characteristic challenges
marketers to keep a supply of the service ready for when
demand becomes effective. Since a car transmission flush
cannot be kept in inventory until it is needed (because it
requires the right mix of personnel and equipment just at
the moment of demand), consumer need at the wrong time
or consumption delayed may mean a lost sale. Communications scholars call this characteristic ephemerality when
referring to broadcast media (Pavlik & McIntosh, 2011).
Perishability—digital. Digitally delivered offerings
need not be completely perishable, as they can be re-experienced, assuming effort has been taken to record the event
(e.g., time-delayed viewing of a webinar). An example
would be the use of a digital tax service, such as TurboTax,
which allows the consumer to save versions of a tax return
on local or distant drives:
a. The traditional services marketing challenge of perishability is summarized by the cannot-be-inventoried
description. Yet digital offerings can clearly be inventoried, and technology even allows for infinite copies
to be made rather instantaneously, such that that holding large inventories is not an issue or expense
(Anderson, 2006). It also nullifies many problems
associated with having sufficient human resources
available at key times of demand.
The primary limitation to keeping old digital offerings is
maintenance of the files (both storage and access). Sometimes organizations choose to delete older files for economic
or legal reasons. Individuals also may choose to delete files
to simplify their lives or because they no longer feel the
need to save old files. The price of storage media is so low
that the cost of storing older files is theoretically approaching zero (Anderson, 2009). Thus, the cost of maintaining
and keeping the files useful, as well as the ability to access
files written in a programming language no longer much in
use, such as COBOL, are the only true challenges associated
with the long-term inventorying of digital records, at least
from the producer/marketer perspective. For consumers, the
extra cost of an external hard drive or cloud-based service,
of course, can be an important consideration, but may be a
lesser cost than that associated with losing data.
Finally, most consumers have experienced an additional
perishability problem: having important data trapped in old
devices. Storage media have changed from magnetic tapes
to magnetic discs to magnetic hard drives to optical drives
to flash or solid state drives, and from there to offsite cloud
storage. Similarly, over time, upgrades and newer versions
of productivity and other software have created an ongoing
need to move important data (say, family photographs) to
newer systems so that the information can still be retrieved
and used. This obsolescence problem is closely related to
perishability, in that irretrievable data are effectively lost
data.
Digital perishability in the classroom. Faculty can
facilitate productive discussions around the perishability of
the aiding devices that digital offerings require. Most students will have stories of lost contact lists, photographs and
class assignments because a hard drive crashed, a cell
phone was dropped in water, or an operating system update
resulted in loss of an app that they liked.
Discussion can extend to considering whether the perishability challenge of digital offerings has shifted from providers to consumers. Does this aspect of the perishability
challenge provide an opportunity for marketers to ameliorate the problem by selling additional digital offerings,
such as cloud storage, for example, services such as
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MARKETING DIGITAL OFFERINGS IS DIFFERENT
Carbonite? What about insurance for lost data files? Consumers can sometimes pay an additional fee that allows
them to redownload purchased software should something
happen to the original downloaded version. Or, should this
challenge be dealt with in alternative ways, such as UltraViolet or Disney Movies Anywhere? Both services provide
free cloud-based storage for movies that consumers have
purchased on DVDs and Blu-rays so that they can be
streamed to different devices at any time. Another form of
perishability is the obsolescence of operating systems. How
long do marketers need to support products that do not run
on the newer operating system?
Finally, this perishability discussion can be a teachable
moment for talking about citing digital sources. The
dynamic nature of webpages, databases, and other digital
collections explains why the APA and other citation styles
usually require that the date of access be included.
DISCUSSION
Digital technologies have become ubiquitous in marketing.
In adjusting pedagogy to acknowledge these changes, marketing faculty have begun to incorporate more technology
in the classroom, have begun to address the new options
available to marketers for engaging with customers, and in
some cases have created not only new courses but also new
majors/concentrations. External forces also propel this
movement forward: accrediting agencies and organizations
seeking interns and employees who understand the technology as well as how to use it strategically.
The production of unifying marketing frameworks has not
always kept pace with the speed of digital business evolution, and thus marketing texts are not providing timely structures for conceptualizing these changes. This paper suggests
ways faculty can effectively use the existing services marketing IHIP framework, but also presents the deviations from it
necessitated by digital offerings. Additionally, we offer suggestions for assignments and discussion probes to augment
faculty presentations. Faculty may find the suggestions here
helpful in organizing their own thinking about these issues,
which in turn will help move the discipline forward.
ACKNOWLEDGMENTS
The authors would like to thank Rajiv P. Dant, Irvine
Clarke III, and the reviewers for their comments on versions of this article.
NOTES
1. We are cognizant that the IHIP framework has been
criticized as being neither empirically derived nor
101
tested (e.g., Keh & Pang, 2010). Other scholars have
questioned whether services offerings are indeed as
different from product offerings as the literature
would suggest (e.g., Greenfield, 2002).
2. Though these two examples come from the traditional services marketing literature (Shoshtak, 1977),
both include significant physical elements.
3. Responsive design refers to creating websites so that
they can be easily read and navigated regardless of
the device one is using to view the site. In the words
of the term’s creator, Ethan Marcotte (2010), responsive design allows a site to be viewed “along a gradient of different experiences.”
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ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings in the
Marketing Classroom
Scott D. Roberts & Kathleen S. Micken
To cite this article: Scott D. Roberts & Kathleen S. Micken (2015) Marketing Digital Offerings Is
Different: Strategies for Teaching About Digital Offerings in the Marketing Classroom, Journal
of Education for Business, 90:2, 96-102, DOI: 10.1080/08832323.2014.988200
To link to this article: http://dx.doi.org/10.1080/08832323.2014.988200
Published online: 22 Dec 2014.
Submit your article to this journal
Article views: 250
View related articles
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Date: 11 January 2016, At: 19:09
JOURNAL OF EDUCATION FOR BUSINESS, 90: 96–102, 2015
Copyright Ó Taylor & Francis Group, LLC
ISSN: 0883-2323 print / 1940-3356 online
DOI: 10.1080/08832323.2014.988200
Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings
in the Marketing Classroom
Scott D. Roberts
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The University of the Incarnate Word, San Antonio, Texas, USA
Kathleen S. Micken
Roger Williams University, Bristol, Rhode Island, USA
Digital offerings represent different challenges for marketers than do traditional goods and
services. After reviewing the literature, the authors suggest ways that the marketing of digital
goods and services might be better presented to and better understood by students. The wellknown four challenges of services marketing model (e.g., intangibility) first proposed by
Zeithaml, Parasuraman, and Barry (1985) is explored and adapted as an organizing
framework for digital offerings. The authors also present specific suggestions for
assignments and class discussions to foster students’ critical thinking about the marketing
implications surrounding digital offerings.
Keywords: digital goods and services, digital marketing, marketing pedagogy, teaching,
teaching strategies
When the U.S. economy shifted away from its manufacturing base, services marketing theory arose to help marketers
deal with the unique nature of the increasingly intangible
offerings (Berry 1980). More recently, the economy has
shifted again, driven by digital technologies. Not only have
products been digitized, but information and communication technologies have also made it possible to distance producers from consumers, both in space and time. Marketing
practice has responded to this environmental change, but
academic marketing thinking has not come as far.
We first became aware of the problem while teaching
MBA students concentrating in digital media management.
For their marketing management course, we used Kotler
and Keller’s (2009) Marketing Management. Kotler’s work
has arguably been one of the central repositories of marketing’s received theories and ideas. We quickly realized,
however, that the discussion of the digital offerings that
these students were so engaged with (film, music, and video
games) was lacking. A search of the marketing literature
revealed the reason why: there was considerable discussion
Correspondence should be addressed to Kathleen S. Micken, Roger
Williams University, Gabelli School of Business, Department of Marketing, 1 Old Ferry Road, Bristol RI 02809, USA. E-mail: [email protected]
of the impact of digital technology on marketing, but there
was much less about marketing strategies for digital goods
and services. This article begins to fill that gap by providing
an organizing framework for thinking about the marketing
of digital offerings as well as some practical suggestions
for how faculty might address digital offerings with their
students.
BACKGROUND: THE DIGITAL ECONOMY
AND THE MARKETING CLASSROOM
The digital sector is an important presence in the U.S. economy. It contributed 4.7% of the U.S. gross domestic product
in 2010 and will continue to grow “more than 10 percent a
year” (Dean et al., 2012, p. 8). Individuals are becoming
more connected, with up to one third of U.S. adults now
being always addressable (connected to the Internet most of
the day) across multiple devices, platforms and locations
(Forrester Research, 2012).
How has the marketing discipline responded? Our purpose here is not to suggest that there has been a dearth of literature about the impact of digital technology but rather
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MARKETING DIGITAL OFFERINGS IS DIFFERENT
that there are significant gaps in the literature about how to
address digital offerings conceptually. Pedagogical scholarship has resulted in proposals for changing the way classes
are taught (e.g., Askim-Lovseth & O’Keefe, 2012; Harrigan
& Hulbert, 2011), as well as suggestions for incorporating
digital marketing practices in the classroom (e.g., Clayton
& Hettche, 2012; McCorkle & McCorkle, 2012). There has
even been a call for “a radical redesign of the marketing
curriculum” (Wymbs, 2011, p. 93). What is missing, however, are pedagogical proposals for teaching about the challenges of marketing digital offerings.
The need to fill this gap comes not only from marketing
practice, but also from accrediting bodies. The 2013 Association to Advance Collegiate Schools of Business
(AACSB) standards mandate that business programs
include learning experiences that help students understand
the integration of information technology in business: “data
creation, data sharing, data analytics, data mining, data
reporting, and storage within and across organizations”
(pp. 30, 31).
Clearly, it is time to equip our students with tools for
understanding and embracing all things digital. And it is
time to equip faculty with the tools to do so. Faculty are
faced with students for whom digital offerings are pervasive, yet who need to learn how to market those offerings
strategically.
APPLYING A SERVICES MARKETING MODEL
TO DIGITAL OFFERINGS
With typical British humor, The Economist (n.d.) defines
services as “products of economic activity that you can’t
drop on your foot.” Services marketing scholars might
agree, as intangibility has been the primary defining attribute of a service (Shostack, 1977; Zeithaml, Parasuraman,
& Berry, 1985). The same can be said for digital offerings;
their fundamental defining feature is intangibility (e.g., Hui
& Chau, 2002; Lovelock & Gummesson, 2004).
Zeithaml et al. (1985) consolidated the intangibility
characteristic with other differences into the intangibility,
heterogeneity, inseparability, and perishability (IHIP)
framework to provide a conceptual basis for thinking about
the problems and strategies in services marketing. In this
study, we adopt a similar perspective with regard to digital
offerings: that the marketing of such offerings usually
requires different strategic approaches. We suggest that a
modification of the IHIP framework can provide guidelines
for the marketing of digital offerings. We begin with a
review of the IHIP framework. Next, we discuss the ways
in which digital offerings both fit within that structure, yet
are different enough to require adjusted marketing strategies. We also present example assignments that can spark
class discussion about digital offerings and the strategic
marketing implications.
97
With the IHIP framework Zeithaml et al. (1985) summarized four “unique service features and [the] resulting marketing problems” (p. 35). This framework “constitute[s]
today’s received wisdom [about the differences between
goods and services] in the broader academic marketing
community” and continue[s] to be “a unifying theme for
services marketing” (Lovelock & Gummesson, 2004, pp.
22, 25)1. The framework is as follows:
1. Intangibility
a. services cannot be stored,
b. services are difficult to protect with patents,
c. services are difficult to display/communicate
about,
d. services are difficult to price;
2. Heterogeneity
a. standardization and quality control of services
provision are difficult;
3. Inseparability
a. the consumer is involved in service production,
b. other consumers often involved in production,
c. centralized mass production is difficult;
4. Perishability
a. services cannot be inventoried.
This IHIP paradigm, however, did not anticipate digital
offerings. At its core, a digital offering is made up of data
files (recorded ones and zeros) stored on either the drives/
media of consumers or on the servers of marketers/facilitators (e.g., in the cloud). These files come together in the
form of solutions (bundles of benefits) for consumers.
Many traditional offerings have become available digitally
including maps, tax preparation, customer service, reference sources, higher education, and distance medical
consulting.
APPLYING THE IHIP FRAMEWORK TO DIGITAL
OFFERINGS
As economies move into the digital realm, definitions such
as The Economist’s (n.d.) foot-drop test are not so useful.
Digital offerings, while they cannot be weighed, often
either reside on physical media or require physical media to
access them. Unlike traditional broadcast media, such as
television and radio, which also required a physical device
for accessing them, digital offerings often can be more easily captured, stored and shared, for example saving a movie
on a digital video recorder or uploading content to a torrent
site. Thus, when applying the IHIP framework to digital
offerings, some significant differences arise, both in terms
of the features of the offerings as well as the attendant marketing challenges. Table 1 presents Zeithaml et al.’s (1985)
IHIP framework and highlights these distinctions, which
are discussed subsequently.
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S. D. ROBERTS AND K. S. MICKEN
TABLE 1.
Intangibility, Heterogeneity, Inseparability, and Perishability Applied to Digital Offerings
Characteristic
Intangibility
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Heterogeneity
Traditional services
Cannot be held, stored; difficult to
communicate and price; intellectual
property challenges
Scaling challenges due to human agents
being different at the point of service
delivery
Inseparability
Inseparable from human provider; the
experience requires marketer presence
Perishability
Cannot be stored for later consumption
Digital offerings
Intangible but can be easily measured,
stored, transferred, communicated, and
priced
Because people are not involved in
delivering the core offering, digital
offerings can theoretically be designed to
be perfectly homogeneous.
Inseparable from delivery systems, such as
hardware, software, and peripherals
Because they are kept and delivered via
storage media, they are not perishable
(though file maintenance can be an issue)
Intangibility
In the traditional paradigm, “most services cannot be seen,
touched, held, or put on a shelf” (Fisk, Grove, & John,
2014, p. 9). Among the challenges typically associated with
intangibility is depicting a service in marketing communications (how to tangibilize a service) and the inability of
consumers to examine a service in advance of delivery.
Intangibility—digital. As discussed previously, a digital offering also meets this definition, as, at its core, it is not
tangible. Nevertheless, the issues that are identified as problems for services are not necessarily problems for digital
offerings:
a. A digital offering is electronically stored, thus the
“cannot be stored” challenge of marketing services
becomes a non-issue in the digital realm, assuming
access to sufficient storage resources.
b. Because digital offerings are driven by software (see
also the subsequent inseparability discussion), the
code underlying the service can be protected—by
copyright rather than by patent, typically (see Wen,
Forman, & Graham, 2013).
c. Digital offerings are displayed and communicated
quite well in digital format (apps, company websites,
and blogs).
d. Price setting is no more a challenge in digital offerings than in most marketing exchanges.
Intangibility, however, does not give rise to the kinds of
issues Zeithaml et al. (1985) identified for services. Instead,
the intangibility is often an advantage that can be exploited
in the ways addressed previously, as the following assignments illustrate.
Digital intangibilty in the classroom. Faculty can
assign students to evaluate both a traditional service
Examples
Files stored on a hard drive or in the cloud
Zillow delivers the same information to all
viewers, but search allows for
customized presentation of results
Pandora (streaming radio) cannot be
experienced without hardware and
software
Automatic backup systems
offering (e.g., a meal in a restaurant or an oil change)2 and
a digital offering (purchasing an app for one’s phone or
new software—even a computer game). What factors made
the offerings either easy or difficult to evaluate in advance
of purchase? Was one easier to assess than another? If so,
why? How did the tangible elements and visual cues of
each contribute to evaluating the intangible elements? How
do the strategic implications for marketers of each offering
differ? This last question allows a faculty member to
address the issues of storing the offering, of protecting it
from being copied by competitors, of communicating with
customers, and of pricing.
If students meet in a computer classroom, an additional
assignment could ask them to review websites with a focus
on user interface design strategies. (In a traditional classroom the assignment would require screen shots.) In this
instance, the discussion would revolve around how the digital presentation facilitates the display of and communication about the offering and how that display might be
customized, using cookies, for returning versus new visitors
(part of the heterogeneity issue considered next).
Heterogeneity
Also called variability, this challenge refers to the difficulty
of standardizing service delivery quality (Fisk et al., 2014).
One of the problems this characteristic creates for services
marketers is a difficulty of scaling up, due to the difficulty
of creating a consistently great service across time, locations, situations, and employees.
Heterogeneity—digital. Digital offerings are often
delivered through the web or through mobile applications.
They are based on repeated execution of computer code
and thus do not exhibit the problem of inconsistency associated with human-based services delivery. For example, Zillow, a free online real estate database service, requires
minimal to no interaction between the company and the
MARKETING DIGITAL OFFERINGS IS DIFFERENT
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end users. To the extent that the digital offering is delivered
without the intervention of human beings, marketers
increasingly have the ability to decrease or eliminate heterogeneity in the offering:
a. Standardization is only challenged by the need of
consumers for a customized offering and lack of hardware and operating system standardization. Standardization and quality control can be built into the
creation and delivery of digital offerings because the
delivery of digital offerings is closely tied to software
code, which does not vary (the very definition of
homogeneity). If standardization is well thought
through in advance, quality control need not be an
issue. This is particularly true of digital consumption
that does not require human marketer involvement,
such as streaming a movie on a tablet.
Consistency in software execution can produce a consistent outcome at the consuming end of the process.
Strategic thinking and thorough beta testing of consumer
applications are the keys to homogeneity in the provision
of digital offerings. There is, however, a significant heterogeneity/variability challenge associated with the delivery of digital offerings that is inextricably tied to the
devices needed to access those offerings. Browsers,
screen resolution, and operating systems have always
been a challenge for the consistency of web-based delivery. With the advent of smart phones and tablets, however, the potential heterogeneity of user experience has
expanded and the term responsive design has entered the
digital design lexicon.3
Digital homogeneity in the classroom. Faculty could
ask students to compare the experience of using cell phones
(or tablets) with different operating systems. The discussion
should expand beyond the user experience to address strategic issues. What is required of a developer to ensure that the
user experience is the same across all the different phones?
Does the limited human interaction suggest an even stronger requirement for planning and testing of the user interface—and of the efficiency of the coding to reduce
transmission costs? Is it important that the user experience
be similar across all platforms? Consider asking students to
compare working with Microsoft Office products on a Mac
versus on a PC. Is the transition seamless? If not, what are
the consumer implications? The assignment can be taken
further to address the responsive design issue: How important is it for companies to ensure that the content is experienced in the most optimal way, regardless of the device a
customer uses: desktop, laptop, tablet, smartphone, television, or video gaming console?
An extension of the assignment would be to ask students to share the ways in which they have customized
their phones. In traditional services marketing literature,
99
service providers strive for standardization to ensure
quality control. In what ways does the provision of digital offerings require both standardization and
customization?
Inseparability
In the traditional marketing services literature, inseparability means that “for most services, the production and consumption of the service occur simultaneously” (Fisk, Grove
& John 2014, p. 10). Fisk, et al. also note that the consumer
is sometimes a co-producer of the experience—in the way
an audience is important to the production of live theatre.
This characteristic has also been termed simultaneity.
Inseparability—digital. With digital offerings, the
inseparability comes not from the inability to separate the
offering from the (human) provider, but rather from the
inability to separate the digital offering from some sort of
tangible delivery device. A core digital offering cannot simply be consumed on its own. Consumer usage requires aiding devices (hardware), operating systems (firmware) and
applications (software). For example, in order to watch a
previously-recorded television show (ones and zeros on a
hard drive), the consumer must at a minimum have a viewing screen, hardware (the box, laptop, tablet), software, the
underlying operating system, the computer code that
accesses the recording, Internet access, if applicable, the
ability to interface with the machine and choose the programming (touchscreen, mouse, remote), a sound system
(speakers, headphones, earbuds), and a power source. Thus,
digital offerings still have the inseparability characteristic;
it is just that the characteristic is expressed in a different
fashion and gives rise to different marketing challenges:
a. There is no need for consumers to be involved in the
production of digital offerings. The provider and the
technology allow the offering to be produced (the
coding) and later consumed without a synchronous
marketing presence. For example, LegalZoom provides a variety of documents and services that do not
require interactions with an attorney.
b. Consuming digital offerings does not require the presence of other consumers. Neither does the presence of
other consumers interfere with an individual’s consumption of the offering. Watching a movie downloaded from Netflix means that he or she does not
have to put up with other people talking during the
show. It is possible to shop online without interference from other customers.
c. One of the major differences that digital offerings
demonstrate is that they are highly scalable, as the
only limiting factor is the bandwidth of the producer
(server size or capacity and transmission speed, in
particular). So the need to centralize mass production
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S. D. ROBERTS AND K. S. MICKEN
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around employees is eliminated unless it is a live service delivered digitally, such as online customer service, for example, via Twitter or chat. When scaling
up is unrelated to human resources, the need for
strong employee training is not an issue. The ability
for marketers to scale up is theoretically unlimited.
Consumption of core digital offerings is tied to devices—televisions, radios, PCs, laptops, tablets, phones, and
video game consoles. It is acknowledged that in precomputer times, analog offerings (radio and television broadcasts, recorded music) were also tied to devices, but not to
the degree that digital offerings are. As discussed under heterogeneity, this inseparability issue goes beyond the question of Mac or PC. Operating system issues now include
Android, IOS, and Windows Phone, as well as questions of
screen-view optimization (Stokes, 2011).
Digital inseparability in the classroom. Faculty can
begin by asking students to identify the companion products that one needs to access digital content. In what ways
do the size, ease of use, speed, battery life, and durability of
these devices enhance or detract from the consumption of
the offering? What about the fragmentation of devices to
access the same digital content? What new digital offerings
have arisen to help ameliorate that issue—such as cloudbased storage services (e.g., Google Drive, iCloud, DropBox, OneDrive) that facilitate access to one’s content?
How important is it that such offerings be platform agnostic? From a strategic perspective, what are the implications
of the always addressable consumers, who use multiple
devices throughout the day? How do marketing communications need to adapt? A related consideration is the three
(or four) screen issue, of consumers accessing digital content via television, via computers, and via mobile devices,
sometimes using two (or more) of these simultaneously.
Perishability
“Most services. . . exist only at the time of their production”
(Fisk et al., 2014, p. 11). This characteristic challenges
marketers to keep a supply of the service ready for when
demand becomes effective. Since a car transmission flush
cannot be kept in inventory until it is needed (because it
requires the right mix of personnel and equipment just at
the moment of demand), consumer need at the wrong time
or consumption delayed may mean a lost sale. Communications scholars call this characteristic ephemerality when
referring to broadcast media (Pavlik & McIntosh, 2011).
Perishability—digital. Digitally delivered offerings
need not be completely perishable, as they can be re-experienced, assuming effort has been taken to record the event
(e.g., time-delayed viewing of a webinar). An example
would be the use of a digital tax service, such as TurboTax,
which allows the consumer to save versions of a tax return
on local or distant drives:
a. The traditional services marketing challenge of perishability is summarized by the cannot-be-inventoried
description. Yet digital offerings can clearly be inventoried, and technology even allows for infinite copies
to be made rather instantaneously, such that that holding large inventories is not an issue or expense
(Anderson, 2006). It also nullifies many problems
associated with having sufficient human resources
available at key times of demand.
The primary limitation to keeping old digital offerings is
maintenance of the files (both storage and access). Sometimes organizations choose to delete older files for economic
or legal reasons. Individuals also may choose to delete files
to simplify their lives or because they no longer feel the
need to save old files. The price of storage media is so low
that the cost of storing older files is theoretically approaching zero (Anderson, 2009). Thus, the cost of maintaining
and keeping the files useful, as well as the ability to access
files written in a programming language no longer much in
use, such as COBOL, are the only true challenges associated
with the long-term inventorying of digital records, at least
from the producer/marketer perspective. For consumers, the
extra cost of an external hard drive or cloud-based service,
of course, can be an important consideration, but may be a
lesser cost than that associated with losing data.
Finally, most consumers have experienced an additional
perishability problem: having important data trapped in old
devices. Storage media have changed from magnetic tapes
to magnetic discs to magnetic hard drives to optical drives
to flash or solid state drives, and from there to offsite cloud
storage. Similarly, over time, upgrades and newer versions
of productivity and other software have created an ongoing
need to move important data (say, family photographs) to
newer systems so that the information can still be retrieved
and used. This obsolescence problem is closely related to
perishability, in that irretrievable data are effectively lost
data.
Digital perishability in the classroom. Faculty can
facilitate productive discussions around the perishability of
the aiding devices that digital offerings require. Most students will have stories of lost contact lists, photographs and
class assignments because a hard drive crashed, a cell
phone was dropped in water, or an operating system update
resulted in loss of an app that they liked.
Discussion can extend to considering whether the perishability challenge of digital offerings has shifted from providers to consumers. Does this aspect of the perishability
challenge provide an opportunity for marketers to ameliorate the problem by selling additional digital offerings,
such as cloud storage, for example, services such as
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MARKETING DIGITAL OFFERINGS IS DIFFERENT
Carbonite? What about insurance for lost data files? Consumers can sometimes pay an additional fee that allows
them to redownload purchased software should something
happen to the original downloaded version. Or, should this
challenge be dealt with in alternative ways, such as UltraViolet or Disney Movies Anywhere? Both services provide
free cloud-based storage for movies that consumers have
purchased on DVDs and Blu-rays so that they can be
streamed to different devices at any time. Another form of
perishability is the obsolescence of operating systems. How
long do marketers need to support products that do not run
on the newer operating system?
Finally, this perishability discussion can be a teachable
moment for talking about citing digital sources. The
dynamic nature of webpages, databases, and other digital
collections explains why the APA and other citation styles
usually require that the date of access be included.
DISCUSSION
Digital technologies have become ubiquitous in marketing.
In adjusting pedagogy to acknowledge these changes, marketing faculty have begun to incorporate more technology
in the classroom, have begun to address the new options
available to marketers for engaging with customers, and in
some cases have created not only new courses but also new
majors/concentrations. External forces also propel this
movement forward: accrediting agencies and organizations
seeking interns and employees who understand the technology as well as how to use it strategically.
The production of unifying marketing frameworks has not
always kept pace with the speed of digital business evolution, and thus marketing texts are not providing timely structures for conceptualizing these changes. This paper suggests
ways faculty can effectively use the existing services marketing IHIP framework, but also presents the deviations from it
necessitated by digital offerings. Additionally, we offer suggestions for assignments and discussion probes to augment
faculty presentations. Faculty may find the suggestions here
helpful in organizing their own thinking about these issues,
which in turn will help move the discipline forward.
ACKNOWLEDGMENTS
The authors would like to thank Rajiv P. Dant, Irvine
Clarke III, and the reviewers for their comments on versions of this article.
NOTES
1. We are cognizant that the IHIP framework has been
criticized as being neither empirically derived nor
101
tested (e.g., Keh & Pang, 2010). Other scholars have
questioned whether services offerings are indeed as
different from product offerings as the literature
would suggest (e.g., Greenfield, 2002).
2. Though these two examples come from the traditional services marketing literature (Shoshtak, 1977),
both include significant physical elements.
3. Responsive design refers to creating websites so that
they can be easily read and navigated regardless of
the device one is using to view the site. In the words
of the term’s creator, Ethan Marcotte (2010), responsive design allows a site to be viewed “along a gradient of different experiences.”
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