Driven by technological developments, deregulation, and globalization the service sector in post-industrial economies is facing unprecedented change. Utilizing a scenario planning framework, the paper examines the impact of such changes on a cross-section of service categories. Acknowledging that the derivation of generic sector wide trends from the analysis of discrete service categories runs the risk of over simplification, 3 core trends were identified: 1. the increasing importance of technological mediation, 2. changing consumer and professional roles, and 3. decreasing importance of relational factors in consumer decision making. These trends pose fundamental challenges to service providers and offer researchers a rich context in which to advance marketing theory.

Introduction

The service sector in post-industrial economies is a multi-faceted construct. Ranging from leisure services to corporate legal services, what is conventionally described as the service sector encompasses retail and professional services, consumer and business services, public and private services. The breadth and diverse nature of the sector is reinforced by increasing diversity in the modes of service delivery, in sources of service provision, and in patterns of consumer-provider interaction. Reflecting such diversity, the emerging body of services marketing literature may best be viewed as a broad disciplinary church which increasingly acknowledges the necessity of different approaches and processes to the marketing of different categories of services (Silvestro et aL, 1992; Hill and Motes, 1995; Ettenson and Turner, 1997). In exploring the future trajectory of development of services marketing theory, this breadth and diversity raises fundamental questions as to whether emerging developments and trends will be common, or indeed have common impacts, across the sector as a whole or whether trends will be specific to particular categories of services. This tension between generic sector-wide developments and service specific developments is central to any discussion over the future evolution of services marketing theory and literature. Indeed, such tension arguably dictates the approach that requires to be adopted in seeking to identify the potential trajectory, or trajectories, of services marketing evolution. That is initially the adoption of a service, or service category, specific approach (see, for example, Clemes et al., 2000) and subsequent to such contextually anchored scenario analysis identify what, if any, trends have generic impact on the service sector as a whole. Such an empirically grounded "case study" approach ensures that developments emerging in specific service settings are captured and inform analysis of potential trends in other service settings. Equally critical to any attempt at scenario planning and trend identification is understanding the genesis of current thinking on the nature of the field under examination. Reflecting both the importance of preceding developments in influencing the direction of change, and the cumulative nature of change (Tellis and Crawford, 1981), the starting point in identifying potential trajectories of development in services marketing is thus "to go back to the future" and review the key themes which have emerged in the services marketing literature over the past two decades.

Evolution of services marketing: underpinning themes

The development of services marketing has been likened to human evolution (Fisk et al., 1993). From the initial crawling out of the primeval swamp of mainstream marketing to walking erect as a distinct disciplinary area contributing to mainstream marketing theory, the nature and parameters of services marketing have been in constant flux (Hogg and Gabbott, 1998). Such flux reflects not only this broadening and deepening of the research base, but equally the impact of developments in the service sector itself, most notably the impact of deregulation and technological change. While acknowledging the breadth and diversity of the service sector, it is possible to identify certain generic themes within the literature, although the relevance of such themes varies across the different components of the sector dependent on the specific nature of the service (Clemes et al., 2000). In looking back to the future, to the current state of services marketing literature, two broad research themes may be regarded as providing the critical foundations underpinning the future direction of development of services marketing. These are the management of the service delivery process and the nature of interaction between consumers and suppliers.

The concept of the service encounter is central to the marketing of services, is indeed the focal point of marketing activity. Reflecting the inseparability of production and consumption in service industries, the service encounter is the actualisation of the service, that is the intersection of service capacity and demand. Carlzon (1987) graphically describes the service encounter as "the moment of truth" where the service is actually delivered. More specifically, Suprenant and Solomon (1987) have defined the service encounter as being: ... the dyadic interaction between the customer and the service provider firm."

The service encounter can be seen as that point at which the consumer can evaluate the service offering and the service supplier manage consumer perceptions of the service (John, 1996). Critically, these encounters may be viewed as complex social interactions rather than simple exchange relationships given the high levels of interpersonal interaction which have conventionally characterised the service delivery process (McCallum and Harrison, 1985; Glynn and Lehtinen, 1995). As a consequence of such complexity, the dynamics and management of the service encounter have attracted significant academic attention over the past two decades (see, for example, Czepiel et al., 1985; Solomon et al., 1985; Bitner, 1990; Czepiel, 1990; Bitner et al., 1994; Price et al, 1995; Grove et al, 1998).

The primary focus of this research has been on the interpersonal interactions between consumers and service providers in terms of the management of service quality and consumer satisfaction. This is exemplified in the prominence of what has been termed the dramaturgical model of the service encounter with its focus on the analysis of the service encounter in terms of the actor/audience interaction, the setting and the performance (Grove and Fisk, 1983; Grove et al., 1992, John, 1996). However, this predominant focus on interpersonal interactions and their surrounding contextual environment may place artificial boundaries on the nature of the service encounter. By focusing on the interpersonal interactions occurring between the consumer and the service provider within the service providers' physical environment, the conventional conceptualisation of the service encounter is in essence an organisationally defined and managed artifice. Yet the process of interaction between individual consumers, conventionally within the service providers' environment, is an equally significant influence on consumer behaviour and satisfaction (Martin and Pranter, 1989; Harris et al., 1995; McGrath and Otnes, 1995), as is the consumer's interaction with impersonal components of the service delivery process. For the consumer, the service encounter thus encompasses a number of interactions, both personal and impersonal, and related experiences alongside their formal interaction with the organisation providing the service. In this regard, many of the technological developments impacting on the service sector, in particular those facilitating "self-service" utilisation of services, may be regarded as having significant consequences.

The Internet driven information revolution is widely perceived to be transforming the way both businesses and consumers operate (Doherty et al., 1999). This is particularly seen to be the case in those areas of the service sector, notably financial or travel services, where transactions do not require interpersonal interaction. In such circumstances, the Internet effectively serves as a new distribution channel (Alexander and Colgate, 1998). However, the impact of this information revolution will potentially be equally great in those services, notably professional services, which are characterised by high levels of interpersonal interaction and where a significant component of the service product is information and expertise. For such services the Internet may be viewed primarily as an information resource, rather than as a distribution channel. Yet, the Internet in this capacity may have the potential to fundamentally change the way in which consumers interact with service providers. In turn, the established format of the service encounter, that is the "interactions between the customer and the organisation that provides the service" (John, 1996, p. 60), in such services is called into question by the changes in consumer access to service information.

The information revolution engendered by the Internet in terms of consumer access to specialist technical information, formerly the preserve of professionals, has fundamentally changed the informational asymmetries which have conventionally characterised the delivery of professional services (Jadad, 1998). Professional dominance and power in the service encounter has conventionally been based on the existence of an imbalance in knowledge and expertise between the professional and service user (Wilson, 1994). The Internet, with its breadth of information, and more significantly its scope for interaction between consumers through providing virtual discussion forums and facilitating the emergence of consumer communities, has the potential to redress these informational asymmetries and empower consumers to challenge the established legitimacy of service professionals. This empowerment of consumers arguably has profound implications both for the management and design of the service encounter.

Such changes in the format of the service encounter will impact inevitably in turn on the nature of the interaction between the service provider and the consumer, given that over an extended time horizon:

... encounters provide the social occasions in which buyer and seller can negotiate and nurture the transformation of their accumulated encounters into an exchange relationship (Czepiel, 1990, p. 13).

Successive consumer-supplier interactions, that is service encounters, are widely viewed as providing the basis on which long term relationships are established in both consumer and business-business service markets (see, for example, Storbacka, 1994; Berry, 1995; Eriksson and Vaghult, 2000). The development and maintenance of such long-term interactive relationships has constituted a central plank of the evolving body of services marketing theory from the early 1990s onward (Gronroos, 1994; Aijo, 1996; Gummesson, 1999). This reflects the impact of the underlying characteristics of services, most notably intangibility, heterogeneity and inseperability, on consumer behaviour in terms of both selection and evaluation of service providers (Gabbott and Hogg, 1998). In this regard, long-term relationships are perceived to provide a critical means by which service users, both consumer and organisational, are able to reduce risk and uncertainty in the purchasing of services given the complexities of assessing service quality (Gwinmer et aL, 1998). It is necessary, however, to recognise that the impact of such characteristics and, hence, the importance and nature of relationships, varies across the spectrum of services, with for example:

... the characteristics that pertain to services in general are present in their purest form in professional services... (Venetis, 1994).

Consequently, for consumers the formation of long-term relationships with service organisations, while being critical in respect of professional services, is relatively unimportant in respect of generic retail services (Ettenson and Turner, 1997). This variability in the nature and format of such relationships reflects both the complexity of the service, but more significantly, the level of consumer involvement in the production of the service (Gordon et aL, 1998). Yet, given increasing competition in many service industries as a result of deregulation and globalisation, service organisations are confronted by the need to enhance customer retention, with the development of closer relationships being perceived as the route to achieving such retention (Mattsson, 1997; Eriksson and Vaghult, 2000).

However, this increasing emphasis on the centrality of close customer-supplier relations to the marketing of services can be viewed as being challenged, at least within consumer services, by the twin trends of technological mediation and commodification. One of the key developments in service industries over the past decade has been the increasing investment in technology in the service delivery process. From the introduction of ATMs through to online medical consultations, technology has revolutionised many areas of the service sector. Replacement of service staff with technology not only offers a means of addressing variability in the service delivery process, but also facilitates cost reduction through increasing the self-service component of the service delivery process. However, by reducing the personal interaction, that basic social building block of service relationships, such developments may be viewed as undermining the development of closer customer-supplier relationships.

Alongside this process of increasing technological mediation has been the emergence of a parallel process of commodification. Conventionally, many professional services such as stockbroking or property conveyencing were produced by the service provider as a bespoke offering for an individual client. Reflecting the impact of socio-economic changes which have seen an increasing proportion of the population making use of such services (Hart and Hogg, 1998), service providers in these markets are increasingly offering standardised "off-the-shelf" service packages alongside more conventional bespoke service offerings. Such services may in effect be viewed as commodity rather than specialist products. While this may offer service providers the opportunity to effectively grow the market for such services, the reduction in the level of consumer involvement in the production of the service affects not only the format of the service encounter, but equally the nature and depth of the customer-supplier relationship. Hence, while consumers purchasing such commodity services may have more frequent interactions with service providers those interactions become more superficial and do not possess what Czepiel (1990) described as that "special status" which has conventionally characterised client-supplier relationships in professional services.

Taken together with the changing parameters of the service encounter and the increasing role of technology in the service delivery process, it is arguable that this trend towards increasing commodification is likely to generate ever greater diversity of consumption and supply within the service sector. Alongside the "information empowered" consumer seeking to determine the service offering provided, there will be the consumer who wishes the service professional to determine what service offering is to be provided. Alongside the service provider marketing standardised technologically mediated service packages there will be others marketing personalised bespoke services. It is against such a complex contextual backdrop that the exploration of potential trends, and research opportunities, in the development of services marketing need to be undertaken.

Methodology

The whole "think tank" exercise was based on the application of the scenario planning technique. The rationale behind its utilisation was the need to create stories of equally plausible futures and to enable the ordering of the participants' perceptions about alternative future environments. Scenario planning encourages participants to stretch their thinking, to question the assumptions held by themselves and others about the future and to challenge traditional ways of thinking and planning.

Specific combinations of conditions provided the inputs for the scenarios with the outcomes provided by expert (academic) suggestions. We used two different types of scenario-building approaches: "prescribed" (a priori by domain expert designers) scenarios and "self-designed" (by the group of experts providing the input) scenarios. The scenarios were built on the basis of "forced" combinations of clearly defined and explained factors related to the main area of analytical thinking. The consideration and inclusion of "what if" questions is crucial to successful scenario planning analysis.

The participants' reasoning and group thinking related to the way the scenarios were tackled and agreed on served as the input data for the development of a knowledge-based system. In this way the group knowledge could be accumulated in a consistent and academic expert knowledge and "memory".

Please refer to the first paper of this special edition which covers the overall methodological facets and specifics in more detail.

Towards an identification of trends in services marketing: scenario planning in services

If all services marketers were laid end to end they would not reach a conclusion (with apologies to George Bernard Shaw).

The breadth and diversity of the service sector, when taken together with the range of influences which have the potential to impact on the sector, present enormous challenges to both practitioners and academics in identifying potential trends in the evolution of services marketing. This complexity is enhanced by the inevitably diverse experiences and perspectives of services marketing professionals and academics involved in any scenario planning activity. The group involved in this particular scenario planning exercise, although sharing common interests in the marketing of services, represented a diverse range of expertise and experience. Consequently, this exploration of trends, and prediction of developments in services marketing theory, will, as with any scenario planning activity, reflect a partial and idiosyncratic interpretation of emerging influences on the sector.

In order as far as possible to minimise such partial and idiosyncratic interpretation of emerging influences by the group in the scenario planning process, use was made of a predetermined range of 15 factors which had been identified as having the potential to affect the service sector. (For a discussion of the derivation of this range of influencing factors refer to the paper addressing the scenario planning methodology.) These factors, which may be viewed as either increasing or decreasing in importance across different parts of the service sector, are listed in Table I.

These factors were utilised to develop ten pre-determined scenarios for the group to analyse and explore the implications for the development of services marketing theory and practice. (For a discussion of the process of development of these scenarios refer to the paper addressing the scenario planning methodology.) Of these pre-determined scenarios, four were identified by the group as reflecting recognisable emerging scenarios with which they had some familiarity, and hence were examined. Emanating from the analysis of these scenarios, the group constructed two additional scenarios utilising the factors listed in Table I. These scenarios focused on professional and public service sectors respectively where there were perceived to be a number of common trends which would impact fundamentally on the nature of the marketing activity undertaken. The individual scenarios, in terms of the market conditions applying, together with the scenario specific implications for services marketing, are outlined in the following section. Subsequent to the individual scenario analysis, broader conclusions regarding the development of services marketing theory, together with research implications, are explored. Pre-determined scenario I

1. Personalisation: increasing importance.

4. Rationing: constant importance.

5. Bundling: increasing importance.

11. Marketspaces: increasing importance.

Under such market conditions the relationship between consumer and producer is likely to undergo significant re-definition. The emergence of new marketing channels as part of broader change in the marketplace would be critical in this redefinition of market relationships. A central part of this redefinition would be the trend towards increased pro-sumption with increasingly empowered consumers taking a more active role in the design and delivery of the service offering. Within this process, consumer deference to professional judgement would decline, being replaced by professional deference to consumer judgement. The service professional would in effect change from being a "priest" to whom the communicant defers, to being a technician to whom the consumer dictates (Klein, 1995). This, in turn, would force service providers to become increasingly responsive to consumer demands for flexibility in patterns of service provision, with customisation of the marketing mix becoming the norm. For service professionals there would be a marked reduction in professional autonomy and status. Contexts within which such a scenario may be envisaged as applying would be education and healthcare, specifically where delivered in the private, for profit, sector.

Pre-determined scenario 2

2. Customer expectations: increasing importance.

5. Rationing: decreasing importance.

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9. Multi-dimensional competition: increasing importance.

11. Marketspaces: increasing importance.

12. Info-mediaries: increasing importance.

With the market environment characterised by increasing competition due to the entrance of non-traditional providers into established marketplaces, as well as the impact of emerging cyber markets, established service providers would face growing pressures to reduce cost structures. Consequently, there is likely to be increasing emphasis on "production-lining" service provision to enhance operational efficiency. At the same time, service providers will be confronted with better informed consumers with increasingly clear service expectations in terms of both service delivery and outcomes. This consumer emphasis on measurable service outcomes will force service providers to develop means of effectively communicating performance standards. This is likely to be accompanied by the emergence of niche brands in place of traditional broad service offerings as service providers seek to deliver increasingly tightly defined value offerings to consumers. Such patterns of development may be anticipated to impact most directly on areas like retail financial services and travel services. Public funded education services may confront broadly similar scenarios.

Pre-determined scenario 3

1. Personalisation: decreasing importance.

5. Rationing: increasing importance.

8. Internationalisation: increasing importance.

12. Info-mediaries: increasing importance.

Increasing consumer knowledge and awareness of service offerings, due to enhanced information channels and the process of internationalisation, will increase consumer expectations of both process and outcome dimensions of service delivery. This will impact inevitably on consumer assertiveness. When coupled to the increasing de-personalisation of services and the associated emphasis on technological mediation, a critical outcome is likely to be reduction in consumer trust in service providers. Such changes in the format of the service encounter will in turn change the nature and dynamics of the relationship between consumers and service providers. Likely outcomes of such changes include the emergence of networks of independent providers of complementary services offering niche products and personalised service, and the growth of specialist communication channels providing consumer information. Among service industries potentially confronting such scenarios are established professional services including legal and accounting services in respect of both consumer and business-business markets.

Pre-determined scenario 4

1. Personalisation: increasing importance.

2. Customer expectations: increasing importance.

10. Technology: increasing importance.

13. Virtual experiences: increasing importance.

The effective impact of trends towards the personalisation of the service encounter and the importance of technology in the delivery of services is likely to be significantly greater diversity in patterns of service provision. Specifically, it is probable that there will be an increasingly clear dichotomy between service provision targeted at price sensitive low income consumers, with an emphasis on utilising technology to reduce costs, and personalised service geared to the needs of higher income consumers. This increased targeting will reflect enhanced knowledge and understanding of customer expectations. An inevitable corollary of such a pattern of development will be a growing emphasis on de-marketing to non-target consumers and, hence, more diversity in access to service provision, which raises issues of "social exclusion". The retail sector may be perceived to be one context where such a scenario may be played out.

Group-generated scenario I

Drawing on research experience in professional services (see, for example, Laing, 1995; Laing and McKee, 2000; Hart and Hogg, 1998; Foxall and Greenley, 1999) the group explored potential developments in the market for consumer professional services and their implications for the marketing of such services. Legal services and specialist financial services, e.g. stockbroking, were considered to be archetypal examples of such services. Utilising the predetermined factors listed in Table I, the following five factors were identified as impacting on the marketing of this type of service.

1. Personalisation: increasing importance.

4. Market transparency: increasing importance.

7. Simplification: increasing importance.

9. Multi-dimensional competition: increasing importance.

10. Impact of technology: increasing importance.

The critical development facing these types of services is the emerging distinction between specialist and commodity service providers. Reflecting both the impact of technology, particularly the emergence of new information and distribution channels, and the emergence of non-traditional suppliers, service providers operating in such markets are facing increasing pressures to become either high added value specialist suppliers or low cost commodity suppliers. The conventional generic service supplier serving both markets is increasingly uncompetitive. The parameters of this shift are represented in Figure 1.

Confronted with such a market environment, service providers will need to redefine their services in terms of the value offer they represent to discrete segments of the market. In turn, such redefinition will of necessity lead to the redesign of the service product itself. Central to this will be changes in the staff and skill mix, the nature and location of service facilities, and the role of technology in the service delivery process. As a consequence, the nature of the service encounter and the supplier-customer relationship will undergo fundamental change. This is likely to be associated with increased emphasis on branding, with the development of increasingly standardised service offerings together with the emergence of large multiple outlet service retailers at the commodity end of the market. Those service providers operating at the specialist end of the market will face pressures to merge, or enter strategic alliances, in order to have the capacity to invest in the support infrastructure required to deliver such high value specialist services. These developments are as likely to affect business to business services of this type as they will consumer services.

Group-generated scenario 2

Despite large-scale privatisation in many post-industrial Western economies, a number of key services remain within the public sector, most notably health and education. Organisations responsible for the delivery of such services, superficially at least, face very different challenges to those service organisations operating in commercial market environments. Utilising the predetermined factors listed in Table I, the following five factors were perceived as likely to impact significantly on the marketing of public sector services, most notably education services.

1. Personalisation: decreasing importance.

3. Accountability: increasing importance.

5. Rationing: decreasing importance.

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7. Simplification: increasing importance.

9. Multi-dimensional competition: increasing importance.

Within an increasingly globalised economy the capacity of governments to increase public sector spending significantly is perceived to be limited. Yet, public sector service providers are under pressure to enhance both the quality and scale of service delivery in order to meet the needs of that global economy. The resultant policy emphasis on enhancing operational efficiency will in the long-term have fundamental implications for the design and delivery of such services. The end-point of such a process of development is likely to be a cost-- led commodity service delivering standardised packages offering specified measurable outcomes. Critically, the relationship between the service professional and the service user (for example, the student) will undergo a fundamental re-configuration, shifting from an essentially personalised to a largely impersonal service. Such changes may be viewed as mirroring the developments at the commodity end of commercial professional service markets. Consequently, implicit in this are similar changes in the organisation and staffing of the service delivery process. Specifically, there is likely to be an increasing emphasis on technological mediation and self-service. Associated with this is the likelihood of a shift towards developing partnerships with nontraditional service providers to develop the necessary service content and, more importantly, the necessary service channels.

Conclusion: tentative steps towards the future

Drawing together the different strands of these multiple scenarios poses significant challenges in that the service sector is characterised by increasing diversity in modes of service delivery, in sources of service provision, and in patterns of consumer-provider interaction. Specifically, moving from the identification of service specific operational developments to the identification of generic strategic trends runs the risk of both over simplification and of failing to capture those underlying shifts which will in the longer term revolutionise the service sector. Acknowledging these risks, a number of generic strategic themes can be identified from the preceding scenario analysis. These themes pose significant challenges to services marketing professionals, and research opportunities for services marketing academics, in that they impact on many of the established assumptions concerning the nature of both the service encounter and customer-supplier relationships.

* Technological intermediation. Whether serving as a distribution channel for services (e.g. financial or travel services) or addressing information asymmetries between consumers and professionals (e.g. health or legal services), emergent intermediary mechanisms have the potential to reconfigure fundamentally the service encounter and customer-supplier relationships. Yet, current understanding of consumer usage of such new intermediary mechanisms is limited. For example, can consumers who are predisposed to utilisation of such mechanisms be identified, and what are the motivating factors encouraging or discouraging such utilisation? Equally, what impact do these mechanisms have on consumer behaviour within the service encounter in terms of the roles and scripts of professionals and consumers? At the same time, from the organisational perspective, how does such technological mediation impact on the ability of service suppliers to manage relationships, specifically to maintain that special status" of close relationships in the absence of personal mediation?

* Consumer and professional roles. The informational empowerment of consumers through the emergence of new intermediary mechanisms, together with the trend towards the commodification of services, raises fundamental questions about the respective roles of professionals and consumers in the service encounter. Indeed, this raises questions about the very nature of the concept of professionalism. The emergent shift in the service encounter from one of professional dominance to one of partnership between consumer and professional has fundamental implications for the design and management of the service encounter, and the recruitment and training of professional staff. Of more significance, however, beyond such operational issues this change raises a number of largely unanswered questions about the boundaries of consumerism in professional services. Specifically, it raises the question of whether or not in complex professional services consumer judgement ought to be given equal weighting to that of professionals in decisions affecting the outcome of the service. Addressing this question is central to defining the evolving nature of consumerism in the service sector and, in turn, the dynamics of the service encounter.

* Service quality and relationships. The increasing emphasis on the role of technology in the service encounter and the concomitant reduction of variability in the service offering is a critical theme across the service sector. Such technologically based "production-lining" is core to the development of consistent service quality standards as part of the process of commodification of many services. The central emphasis on branding and measurable quality specifications in commodified services raises major questions over the ongoing importance of relationships in the marketing of such services. For the consumer, the development and articulation of measurable performance standards may be viewed potentially as a substitute for the development of a close relationship with a supplier as a means of handling risk and uncertainty. Thus, the commodification of services may not only make the management of customer-supplier relationships more complex as previously discussed, but may more fundamentally erode the very basis for customers developing close relationships with service suppliers.

In conclusion, if there is one overarching common theme to emerge from this process of scenario analysis it is that the complexity of services marketing, and services management more generally, is set to increase, with service providers facing unprecedented challenges. These challenges offer services marketing academics a rich context in which to push back the boundaries of marketing theory and challenge prevailing orthodoxies.