1.1.1. Products and Services

In economics there are two types of item that can be paid for; products and services. When you buy a product (sometimes called a good), you become the owner of something physical. When you buy a service, you don't own anything. Instead what you obtain might be an experience, an idea, a piece of knowledge or advice. The definition of a service in economics terms is very broad. It includes getting a hair-cut, watching a film or even learning about LBS as you are doing now.

Tick whether the following are products or services

The SHIP Acronym

(2004) use the economics definition of a service to describe mobile information services. They define four characteristics of a service using the SHIP Acronym:

• Simultaneously produced and consumed. The user and producer of the service are both assumed to be present during a transaction. Hence, they co-produce the service.
• Heterogeneous. Every service produced through interaction is unique to a certain degree.
• Intangible, purchase of a service does not result in a physical object
• Perishable, The value provided by a service is gone when it is consumed. For example, it the service cannot be resold.

We can consider these characteristics in relation to user accessing a map with an LBS and using a paper map.

SHIP Characteristic	LBS Map (Service)	Paper Map (Product)
Simultaneously produced and consumed	The map is defined by the user at the moment when they need information.	The map is predefined by a cartographic agency.
Heterogeneous	Different maps are produced according to the nature of interaction (e.g. showing search results), the interests and context of the user (e.g. activity).	The map is generic (supporting a broad range of different users and activities) and static (independent of location and time of use).
Intangible	An LBS map is virtual, it is an electronic medium.	The paper map is physical it can be held, folded, written on etc.
Perishable	LBS maps are relevant to a particular interaction and situation and after that their usefulness is gone.	The map continues to exist after it has been referred to. It can be re-used and re-sold if desired.

The Product-Service Continuum

Most things are not purely a product or a service, but exist somewhere in between, having both service and product components. For example, going for a meal at a restaurant involves both a product; the food, and a service; the ambiance, the waiting, the creativity of the chef etc. Goods can therefore be seen along a continuum ranging to pure service to pure product. Explore the continuum for a variety of geographic technologies using the animation below. Move the slider to look at different technologies along the continuum. Moving your mouse over the graphics that appear gives more information about the technology.

Location-based services are not pure services in several ways. Can you suggest some of these based on the SHIP characteristics? (Click here for more information)