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Recently, studies of services have become important throughout the world, and particularly in economically developed nations. Not only in the marketing field but also in the engineering field, research activities such as Service Science (Hidaka, 2006; Spohrer, 2007) initiated by IBM, Product-Service System (Mont, 2002) and Service Engineering (Shimomura, 2005) are studied. In the service science and the service engineering research fields, studies mainly analyze services and improving service productivity. They also build new service design methodologies. Nevertheless, because of characteristics of services, good service does not always diffuse. Studies about service diffusion processes are necessary in addition to studies of service design methodologies.
Contrasted with products, services have characteristics of intangibility, inseparability, heterogeneity, and perishability (Walok, 1998). Intangibility (Regan, 1963) is an important characteristic: services have no shape because service is a performance. Inseparability (Regan, 1963) of production and consumption is another characteristic: services are produced and consumed simultaneously. Heterogeneity (Zeithaml, 1985) is a characteristic by which service quality is often inconsistent because of the nature of service delivery systems: they involve humans. Perishability (Rathmell, 1966) is another characteristic: it is impossible to stock services. Because of those characteristics, the following influences can be identified in the purchase decisions of consumers: expectations before a purchase become heterogeneous because consumers can not check the quality of the service a priori. The utility from service use also becomes heterogeneous because of the heterogeneity of service quality. It is also said that service quality should be evaluated not by the viewpoint of service providers but by the viewpoint of consumers (Fisk, 2004; Parasuraman, 1985). Therefore, the service diffusion process in service purchases is specifically examined in this study, particularly considering the heterogeneity of consumer utility.
Additionally, it is necessary to consider the communication between consumers to study about service diffusion process. Because enough information is not provided only by the broadcast-type advertisement, communication with other consumers is also important in service diffusion when consumers evaluate service quality (Miyata, 2008). It is said that externality is an important factor affecting diffusion in the economic field. Externality is definable as a situation by which a certain economic subject affects other economic subjects without passage through a market, perhaps by word-of-mouth or through fashion (Figure 1). Therefore, not only the heterogeneity of service quality evaluated by a consumer but also externalities influenced by the circumference of the consumer are considered to analyze service diffusion process. The influence of the externality occurs as a result of interaction among consumers. Therefore, it is necessary to consider the connections among consumers to study service diffusion.