Describes how service businesses, who have most direct contact with consumers, seem to be the last to adopt a consumer‐oriented marketing concept. Theorizes over service marketing and how it stands at the same point as industrial marketing did some ten years ago. Postulates that general theories or frameworks for service marketing development seems to have followed two quite different paths. Says that one approach, which covers services offered by service companies, should be changed in a more product‐like manner, enabling the application of existing marketing theories. Compares the second approach, which is a notion that services are different, compared with physical products, holding that marketing concepts and models have to be developed in a more service‐like direction. Reports that findings herein are based on both theoretical and empirical research and that service marketing theory is the result of an ongoing research project, begun in 1976. Concludes by theorizing that service‐marketing theory, as presented, can only be applied to part of a service firm's total marketing function.