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Global ServiceManagement


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Corporate Involvement in Services

Marketing

Typical International Services

Banking and financial services

Construction, design, and engineeringservices

Legal and accounting services

Communication services

Teaching and training services

Management consulting


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Differences Between Servicesand Goods

Definitions and distinctions Goods are physical objects, devices, or things.

Services are deeds, performances, or actions.

Goods are fixed in form and require physicaldistribution; services are delivered as problemsolutions on or off-site.

The main difference between goods and services is

intangibility. Services are generally moreintangible, personalized, and perishable.


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Linkage between Services and Goods

Goods and services complement oneanother. Goods frequently requireservicing after their purchase.

Goods and services are marketed invarying packages or combinations totargeted customer groups

Customer groups have differingperspectives on the features and provisionof services.


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Stand-Alone Services

Services compete with goods andcompete with other services (e.g., videorentals).

Services are intangible and perishable,presenting problems in matching servicecapacity to variations in demand.

Consumption of services requires providerand customer involvement.

Service consistency is required.


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Tangible/Intangible Offerings of Airlines

Vehicle

Transport

Service

Frequency

Food and

Drinks

Transport

Transport

Distribution

Price Airlines

Intangible

Tangible

Source: Adapted from G. Lynn Shostack, B

reaking Free from

Product Marketing, in Services Marketing, ed. Christopher H.Lovelock (Englewood Cliffs, NJ: Prentice-Hall, 1984), 40.


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Problems with ServicesMarket transparency

Consumers have difficulty in evaluatingservices because customers may use (orrequire )the same service in different way.

Service heterogeneity Services vary in their content and quality of

delivery as customer requirements change.

Cultural sensitivity Services are delivered directly to the

customer, making them potentially moreculturally sensitive than products.


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The Role of ServicesIn the U.S. economy

The service sector produces 77% of U.S.GNP and employs 80% of the workforce.

Financial and technical services exporting

and importing are both growing rapidly.In the world economy

Services are the fastest growing world

trade sector International services contribute more than

half of GNP in many industrial nations.

Trade in services is about 25% of all world

trade.


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Global Transformation of Services

Reduced governmental regulation Transportation, banking, and

telecommunications

Decreased regulation by industry groups.Technological advances are opening upand increasing worldwide service

trade opportunities.Both labor-intensive and technology-intensive services are expanding

into global markets.


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International Trade Problems inServices

Data collection problems

The quality of data collected on the service

trade is poor due to the difficulty of quantifyingand tracking the delivery of services.

Services lack of homogeneity for

transparency, making comparisons and themeasurement of the effects of servicesin global markets difficult .


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Regulation of Services Trade

U.S. disincentives to international services State and federal regulations are formidable

barriers to entry.

Governmental justification for entrybarriers

National Security

Economic Security Protection of infant industries


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Regulation of Services Trade

Obstacles to service trade abroad

barriers to entry

performance

Discriminatory and nondiscriminatoryregulations


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Governmental Responses to

Services Problems

Trade liberalization developments

OECD code on invisible transactions (1950s)

GATT and the Tokyo Round The Government Procurement Code

Subsidies and Countervailing Measures Code

The Uruguay Round and the GeneralAgreement on Trade in Services (GATS)


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Starting to Market Services Internationally

For services tied to complementary goods Follow the path of the good in the market.

For services independent of goods

Identify market situations abroad similar to thedomestic market where the application ofservices expertise presents opportunities formarket entry and expansion.

Identify and understand transition points

Domestic and economic changes in foreigncountries can create the need for services

expertise.


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International Services Marketing

Strategic Implications Identify the nature and the aim of the service

offering core.

Communicate the performance of the serviceon both the mass level and the personal level.

Train organizational personnel to convey thespirit, values, and attitudes of the corporation.

Address issues of service pricing andfinancing.

Consider the distribution implications of

international services.


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Thank You!!!

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