Services, products, and the institutional structure of production

Abstract

This paper revisits the product–service distinction from an institutional perspective. Much of the literature in marketing and management has focused on the intrinsic characteristics of services with a view to derive implications for the management of service-based firms. Our key argument is that the quest for foundational differences between products and services is misguided. What counts as a product or a service is dependent on the nature of producer–user interactions and the institutional structure of production rather than on any essentialist feature of products or services. Furthermore, we develop the argument that services play an increasingly important role in manufacturing firms and we explore the reasons that underpin this trend.