What is service concept?

1 The service concept is an attempt to create a clear,
agreed, shared and articulated definition of the nature of the service provided and received, in
order to ensure that the essence of the service is delivered. Note that when we use the word
‘service’ in this book we are using it as a shortened version of the term ‘service concept’.
It should also be noted that marketers may use terminology similar to the service concept
to describe the service promise or service proposition, i.e. the service provided. We use
the term ‘service concept’ to pull together the provider’s view (service provided) and the
customer’s view (service received or required) to help provide a shared and agreed base for
the design, delivery and development of a service.
In this chapter we will explain how the service concept can be articulated and show how
it can be used to drive understanding and also innovate new services.
3.2 What is a service concept?
When asked his secret of success, Ingvar Kamprad, the founder of the IKEA chain of furniture
stores, replied ‘We are a concept company.’ He went on to share his vision and explain the
concept: ‘Our vision is to contribute to a better everyday life for the majority of people. We do
this by offering a wide range of home furnishing items of good design and function, at prices
so low that the majority of people can afford to buy them.’ This concept has captured the
imaginations of both IKEA’s employees and customers. People buy IKEA products because
they are well made, stylish and inexpensive. They also buy into the idea of self-selection, selfservice,
self-delivery and self-build.
The service concept is an important way of capturing the nature of a service so that customers
know what they are getting and staff understand what they are providing. The service
concept can also be used to help develop new services. For example, Yngve Bergqvist, president
of Icehotel, created a new concept in hotels. Having few visitors in the very cold winter months
he got the idea of creating a hotel made out of ice, as described in Case Example 3.1 . Some
years ago, First Direct implemented a new concept in banking. At a time when banks were
(unwelcoming) places with lavish banking halls, long queues and a ‘you-should-be-grateful’
style of service, First Direct created a bank to suit the customer. It is open 24 hours a day and
accessible by phone or the internet. The phone service is not staffed by traditional bank clerks
but by people who are interested in helping people. First Direct is a bank with personality. Its
staff are witty and warm, straightforward, informed and informing, and certainly not ordinary.