Information as a product: not goods, not services Jon Freiden Associate Professor of Marketing, College of Business, Florida State University, Tallahassee, USA Ronald Goldsmith Professor of Marketing, College of Business, Florida State University, Tallahassee, USA Scott Takacs Assisant Professor, Department of Business, Georgetown College, Georgetown, Kentucky, USA Charles Hofacker Professor of Marketing, College of Business, Florida State University, Tallahassee, USA Recent decades have wit- and again without any degradation in the nessed an explosion in the The information age original data, i.e., information has the quantity of information being As the world’s economy enters the Informa- capacity to be digitised. Information, as produced, which in turn has tion Age, all types of digital data become conceptualised here, does not include live created vast opportunities for more important to many aspects of business, performances that require an audience to be information-based to say nothing of daily life (Drucker, 1994; present because these are, strictly speaking, businesses. The time has Naisbitt, 1982). Moreover, the selling, trans- services (Lovelock, 1991). In essence, we are come for information to be porting, and manipulating of information defining information both as the treated as a unique product have become a huge business. It is estimated communication of knowledge and as a signal alongside goods and services. that there are more than 36,000 information or transmitted data (The American Heritage But is information an intangi- product suppliers in the USA (Meyer and Dictionary, 1985). Furthermore, ble good or an imperishable Zack, 1996). One information supplier, information may be capable of being service? In this paper we Find/SVP, sells hundreds of marketing exchanged as in other marketing discuss the unique properties research and industry reports, many of which transactions (Rowley, 1995). of information as a product cost $2,000. In 1997 the A.C. Nielsen In common with most new product fields and propose that information Company generated over $1.358 billion in (Foxall, 1984), the initial thrust in the be distinguished conceptually marketing research revenue information industries has been creating new and thus marketed differently (http://www.nielsen.com/home, 30 July 1997). forms of information and the technologies to from both goods and services. Tapscott (1996, p. 9) estimates that the compile and disseminate them. Consequently, We offer recommendations interactive multimedia industry will gener- either a “production concept” or “selling for marketing practice that ate one trillion dollars or 10 per cent of the concept” approach has dominated this apply uniquely to information. gross domestic product of America in just a business. Our argument is that it is now time Finally, implications for mar- few years. Within the industry, almost all to focus more specifically on the marketing of keting theory, marketing current business efforts and research, how- information and let the “marketing concept” research, and directions for ever, are focused on the production and sale of guide the development of information future research into the information products (Meyer and Zack, 1996). products. A market orientation will be as marketing of information are This paper provides justification for the need essential to the success of information presented. to develop information marketing as a distinct companies in the future as it is now for any field of study and practice alongside other type of goods or services-based traditional goods marketing and the newer company (Deighton et al., 1996; Webster, 1994). field of services marketing. We suggest that The focus of our paper is the marketing of marketers should focus attention on information, where information is the creating theories and strategies that are primary component of a “product” to be uniquely suited to the marketing of purchased and used by either organisational or household consumers. This paper A version of this paper was information. presented by Professor Certainly, the term “information” has discusses the nature of information and pre- Goldsmith to the Marketing many meanings depending on the context in sents a review of the literature relevant to its Faculty at Kent State which it is used. While a later section dis- marketing. Next, we discuss a new paradigm University, 25 April 1997. cusses the concept of information in more that distinguishes goods, services, and detail, we begin by thinking of information information. Our orientation to the concept simply as words, numbers, pictures, software, of information is summarised well by Rowley sounds, or video. The content of information (1995), who states that information is “neither a good nor a service, but has some character- Marketing Intelligence & may be factual, as suggested by Campbell’s Planning definition: “news, intelligence, facts and istics of both as well as unique 16/3 [1998] 210–220 ideas that are acquired and passed on as characteristics of its own”. This leads to © MCB University Press knowledge” (Campbell, 1982, p.15). All of these recommendations concerning marketing [ISSN 0263-4503] may be “captured” in time and related again practice. Finally, implications for marketing [ 210 ] Jon Freiden, theory, marketing research, and directions service, as is a visit to the doctor, where the Ronald Goldsmith, for future research into information market- product is dominated by the professional Scott Takacs and ing are presented. service, but it may be accompanied by Charles Hofacker tangible medical devices or drugs (goods) and Information as a product: not goods, not services booklets or advice (information) on health Three types of products: goods, maintenance. Finally, a Type III product is an Marketing Intelligence & Planning services, and information information product; an encyclopedia on CD- 16/3 [1998] 210–220 ROM is virtually all information, but it also As the marketing concept has long argued, a has a small goods component (the CD, its product is a bundle of benefits that a firm case, the jewel box), and a small service offers to consumers to meet their needs and component (the online help and upgrades). wants (Webster, 1994). Expanding on this While this article focuses mainly on the “product/service bundle,” we propose that a marketing of Type III products, the product consists of relative proportions of implications are clear: marketers of all types three primary elements: goods, services, and of products should keep in mind that their information. Figure 1 shows this new market offering may contain some concept of a product embedded in the proportion of each of these three elements augmented product concept introduced and that competitive advantage, consumer by Levitt (1983) and discussed by Webster value, and new product development can (1994). be guided by enhancing each part of the Most products can be conceptualised as a product. mixture of these three elements. An example of a product that is comprised of approximately equal proportions of all three Information is unique elements would be personal computers: the total product consists of the hardware First, it is important to establish a conceptual (goods), the service guarantee and user sup- definition for information and identify its port services (services), and information on properties. Information is unique because it its use contained in the manuals and disks has a mathematical form, regardless of (information). From this orientation (see whether the medium carrying the informa- Figure 2) we can refer to a Type I product as tion is a book, movie, audio tape, or computer one that is dominated by the goods compo- screen. In modern terms, information has the nent. Premium oranges sold during the capacity to be digitised without any loss of holidays, while dominated by the goods com- content (Gates, 1995). It may be provided in ponent, may have smaller sectors devoted to printed or electronic form and it can be sold services (e.g., returns for imperfections) and to external markets or it can be used inter- information (e.g., a booklet describing unique nally by the originator (Meyer and Zack, uses). A Type II product is predominantly a 1996). Information may be uniformly consumed by more than one person, at various Figure 1 locations, at any time. Information is A new concept of a product: tangible goods, services, and information delivered in an impersonal manner, or it has the capacity to be so delivered. Thus, information is the same for all consumers who can use it any way they wish. The challenge for managers of Type III products (such as the author of a thrilling novel or the creator of a software innovation) is to develop the information (often having high fixed cost and long development time) after which Tangible Services the product may be sold over and over with Goods Core Product negligible variable cost. There is no theoretical limit to the level of supply by a single producer (e.g., there are over 100 Information million copies of Windows 3.1 used through- Expected Product out the world, all virtually identical (Schlender, 1995)). Furthermore, consuming information Augmented Product does not use it up or change it (the feature of permanence), although it can become out of date (the feature of obsolescence). Infor- mation should not be confused with its [ 211 ] Jon Freiden, Figure 2 Ronald Goldsmith, Three types of products Scott Takacs and Charles Hofacker Information Service Information as a product: not goods, not services Marketing Intelligence & Information Planning 16/3 [1998] 210–220 TYPE II TYPE I Tangible 2. Services 1. Tangible Goods Haircut Tyres Service Tangible Bank Account Car Battery Repair Service Oranges TYPE III 3. Information Instructional Manual News Service On-line Directory mode or the medium through which it is traditional economic distinction between delivered. Mode here refers to whether durable and nondurable goods, Copeland’s information exists symbolically as words, (1924) breakdown of goods into convenience, numbers, pictures, or sounds. Medium shopping, and specialty goods is well known refers to the physical means by which it is to marketers.