An executive summary for

managers and executive International services

readers can be found at the
end of this issue marketing: review of research,
1980-1998
Gary Knight
Assistant Professor of Marketing, Department of Marketing, College
of Business, Florida State University, Tallahassee, Florida, USA

Keywords Services marketing, International marketing, Marketing research

Abstract The literature on international services marketing from 31 academic journals in
the period 1980 to 1998 is reviewed. This time frame contains the largest proportion of
scholarly works published on international services marketing to date. Results reveal that
the extant literature is relatively sparse, with much research focused on highly specific
industries or topic areas. Major findings from leading sectors as well as from general
works are presented. The special characteristics of services are discussed in light of
requirements for successful international marketing success. A call is made for future
research which can extend international services marketing with regard to needed
theories, models and constructs.

Introduction
While the nature and volume of world services trade is not precisely
understood, it is likely that, by the start of the new millennium, more than
half the world's multinational enterprises (MNEs) will be engaged in
services (Boddewyn et al., 1986). The period from 1980 to 1998 has brought
fundamental changes to the international marketing of services. Among the
most important of these have been the globalization of markets, the decline
of trade barriers, and the emergence of modern communications and
information technologies that facilitate cost-effective international business
operations. Over the past 20 years, the total volume of world trade has grown
far more rapidly than the annual growth rate in world gross national product
(The Economist, 1997). The result is a more integrated global economy in
which firms and consumers everywhere are increasingly touched by
international business (Dunning, 1993; Porter, 1986). Most recently the trend
has been accelerated by the widespread emergence of free trade under
structures such as NAFTA, APEC and the European Union. Advances in
information and communications technologies have also been very
important. The ability to process and analyze data efficiently, as well as the
widespread diffusion of the Internet, e-mail, cable, satellite, fax and other
telecommunications technologies have made going international a highly
viable and cost-effective option for various types of service providers
(Business Week, 1994; The Economist, 1995; Segebarth, 1990).
The above transformations have been associated with an overall rapid
increase in the marketing of services worldwide. The importance of these
changes has been reflected in the emergence, especially since the mid-1980s,
of several streams of research. The purpose of this article is to review the
major literature and key findings in several categories on international
services marketing during the period 1980 to 1998. A large number of
academic journals were searched to discover articles falling within this time
frame as they related to international services marketing. The time period
coincides with facilitating developments highlighted above and publication

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JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999, pp. 347-360, # MCB UNIVERSITY PRESS, 0887-6045 347
 of the vast majority of international services marketing research conducted to
date. Over this period, we searched 31 of the most important marketing and
international business journals. The choice of these outlets was guided in part
by their academic orientation and accessibility. While the choice is
somewhat subjective, we feel that the major journals in marketing, services
and international business are fairly represented. Moreover, a computerized
search of libraries at 11 major universities in the eastern USA revealed that
nearly all the journals were being subscribed to by the schools and the
remainder by more than half of the schools, providing further support to the
choice of journals.
Paucity of research on In searching these journals, just 124 published articles on international
international services services marketing were identified. The paucity of research on international
marketing services marketing is alarming when one considers the importance of
services in the global economy. Moreover, it must be stressed that the
majority of articles published from 1980 to 1998 emphasized narrowly
defined issues (e.g. descriptive studies of discrete topics), industries (e.g.
advertising, insurance), or locations (e.g. Japan, Eastern Europe). The body
of work to date is largely fragmentary, exploratory, and lacking strong
theoretical bases. With few exceptions (e.g. Clark et al., 1996; Eriksson
et al., 1997; Erramilli and Rao, 1993; Patterson and Cicic, 1995), most
research on international services marketing does not represent
programmatic efforts intended to develop theory, conceptualizations and
constructs that generalize across industries. As Clark et al. (1996) have
suggested, it may be that the nature of international services is so complex
and diverse that externally valid theories may never emerge. It is also
certainly true that research on international services marketing is still very
much at an early stage. Historically, the early development of many
academic fields has been characterized by exploratory and fragmentary
work. Indeed, such research is necessary in order to devise valid theory and
conceptualizations (Kuhn, 1970). Nevertheless, if international services
marketing is ever to develop as a viable field, it is clear that greater effort
needs to be applied to develop theories and frameworks that are both
cohesive and sound.
In the following section, background is given on the definition and concept
of international services marketing. Next, general descriptive statistics
regarding published output are provided. Subsequently, findings related to
the general international services marketing field and to specific sectors are
presented. Finally, we close by offering conclusions, a call for more
scholarly research, and relevant research questions.

Conceptual background
International services are defined as ``deeds, performances, efforts,
conducted across national boundaries in critical contact with foreign
cultures'' (Clark et al., 1996, p. 15). Unlike physical, tangible goods, services
are usually regarded as performances (e.g. legal services) or experiences (e.g.
spectator sports or live theater), which may be equipment based (e.g.
telecommunications, radio, TV) or people based (e.g. management
consulting) (Gronroos, 1990; Patterson and Cicic, 1995). Services entail
unique features that distinguish them from manufactured goods. First, they
are largely intangible and cannot be touched, transported, or stored. Second,
services tend to be inseparable, that is, production usually cannot be
separated from consumption. Third, services are perishable, meaning that
they must usually be consumed at the time they are produced, or they will be
lost. Finally, services are highly heterogeneous in the sense that, unlike

348 JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999


Marketing problems
124 articles related to
international services
marketing
JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999
products, no one service performance is identical to another. Each service
encounter is unique and often highly customized (Zeithaml et al., 1985).
Dahringer (1991) points to several marketing problems that result from these
characteristics. Because of the intangibility aspect, services cannot be
protected through patents, readily displayed or communicated, and prices are
often difficult to set. Because of the inseparability dimension, the consumer
is usually very involved in the production of the service, and centralized
mass production is impossible or very difficult to achieve. Because services
are perishable, inventories cannot be carried out. Because of their
heterogeneity, standardization and quality control of the offering remain a
major challenge (Dahringer, 1991). Recently, it was found that international
service providers in some industries may not even profit from the economies
of scale believed to benefit traditional goods producers (Katrishen and
Scordis, 1998). All of these characteristics impact the nature of the service
offering and the manner in which it is promoted, priced and distributed.
Patterson and Cicic (1995) note that research on international services has
focused on several areas, including:
(1) entry mode choice and associated strategies (e.g. Erramilli, 1990, 1992)
and barriers to the internationalization of services (e.g. Dahringer, 1991);
(2) the internationalization process in numerous industries (e.g. Bhuian,
1997; Terpstra and Yu, 1988);
(3) the nature and role of services in various world regions (e.g. Kassem,
1989);
(4) the role of services industries in creating national competitive
advantages (e.g. Porter, 1990); and
(5) differences among services and the consequent implications for
marketing operations and strategy (e.g. Nicolaud, 1989; Patterson and
Cicic, 1995).
In the following section, we present general findings of our review of articles
on international services marketing published from 1980 to 1998.
General descriptive findings
For the purposes of the present work, articles dealing with services in the
international context and with traditional marketing dimensions (e.g.
product, pricing, promotion and distribution) or themes (e.g. retailing,
market orientation, market entry) were targeted for selection. Additionally,
all articles on international services found in marketing-focused journals
(e.g. Journal of Services Marketing, European Journal of Marketing) were
similarly chosen.
In all, as reflected in Table I, a total of 31 journals covering the time period
1980 to 1998 were searched. The search utilized several methods. Initially,
each of the journals was systematically searched for articles dealing with any
aspect of international services. In addition, ``international and services'' and
several other relevant keywords were used to search ABI/INFORM, the
leading electronic business database. Finally, the reference sections of key
articles were scanned for additional citations. The collection of articles found
in this manner was then narrowed further to only those dealing with
marketing dimensions, themes and associated topics. In all, these procedures
resulted in the discovery of 124 articles related to international services
marketing.
349
 Advances in International Marketing
Columbia Journal of World Business/Journal of World Business
European Journal of Marketing
Harvard Business Review
Industrial Marketing Management
International Business Review
International Journal of Physical Distribution and Logistics Management
International Journal of Purchasing and Materials Management
International Journal of Research in Marketing
International Journal of Retailing
International Journal of Service Industry Management
International Marketing Review
Journal of the Academy of Marketing Science
Journal of Advertising
Journal of Business and Industrial Marketing
Journal of Business Research
Journal of Consumer Marketing
Journal of Consumer Research
Journal of Interactive Marketing
Journal of International Business Studies
Journal of International Marketing
Journal of Marketing
Journal of Marketing Research
Journal of Marketing Theory and Practice
Journal of Retailing
Journal of Services Marketing
Management International Review
Marketing Science
Service Industries Journal
Service Industry Management
Sloan Management Review

Table I. Journals reviewed for the time period 1980-1998

International services
marketing research is in its
infancy
Out of this total pool, a total of 61 of these articles were empirical works.
The remaining 63 were non-empirical studies, consisting of conceptual,
review, or opinion-type contributions. The large number articles in this latter
category was greater than expected and probably reflects several factors.
First, while several leading marketing journals generally favor the
publication of empirical articles, several of the outlets searched in the present
study appear not to have such a bias. Indeed, journals such as European
Journal of Marketing, Journal of Services Marketing, Service Industries
Journal, and International Journal of Service Industry Management contain
a very large proportion of purely conceptual or opinion articles. Second,
several journals are published in Europe where traditional scholarship is
more oriented than in North America toward conceptual research (Gronroos,
1991). Finally, as indicated earlier, international services marketing research
is in its infancy and requires conceptual-type research, as opposed to
hypothesis testing and other types of confirmatory work, in order to build a
conceptual foundation for subsequent empirical studies.
As indicated in Table II, the primary publication outlets for international
services marketing research from 1980 to 1998 were the Service Industries
Journal (38), Journal of International Business Studies (13), European
Journal of Marketing (12), and the Journal of Services Marketing (10). It
should be noted that the large number of articles in the Service Industries
Journal is partially the result of that journal featuring special issues on
international services topics within recent years. Surprisingly, more than half

350 JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999


A new and growing field
JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999
Journal Number
Service Industries Journal 38
Journal of International Business Studies 13
European Journal of Marketing 12
Journal of Services Marketing 10
Columbia Journal of World Business/Journal of World Business 9
Management International Review 8
International Journal of Service Industry Management 6
Journal of International Marketing 5
International Marketing Review 5
Advances in International Marketing 4
Journal of Business Research 3
Harvard Business Review 2
Journal of Business and Industrial Marketing 2
Journal of Retailing 2
Industrial Marketing Management 1
International Journal of Research in Marketing 1
International Journal of Retailing 1
Journal of Marketing 1
(Scandinavian) International Business Review 1
Table II. Journal outlets ranked by number of International Services Marketing
articles published, 1980-1998
of the searched journals contained only one or no articles on international
services marketing. It may be that these journals received no publishable
submissions on international services marketing during the study's time
period, reflecting a paucity of scholars doing work in this area. It may also
reflect a bias at some journals regarding the relatively new research area. In
turn, these outcomes probably indicate that the community of marketing and
international business scholars, for whatever reasons, simply have not until
recently recognized international services marketing as a field worthy of
inquiry.
To give a sense of the chronological progression of research in international
services marketing, Figure 1 presents the number of articles published in
each of the years from 1980 to 1998. Figure 1 implies that research on
international services marketing did not begin to appear significantly in
scholarly journals until the mid- to late-1980s. This is perhaps not surprising
given that research on the broad field of services itself did not materially
emerge in the marketing literature until the early-1980s. Moreover, several
of the searched journals were founded during the 1980s, resulting in a larger
number of outlets available for services research. This has undoubtedly
affected the increase in international services research during the past two
decades. It should be noted that the upsurge in articles in 1992 and 1995 is
partially the result of the publication in those years of special issues on
international services by the Service Industries Journal and the European
Journal of Marketing, events in themselves indicative of the emerging field
of international services marketing. Overall, the trendline reflected in
Figure 1 indicates the development of a new and growing field.
Earlier it was noted that international services research has focused largely
on specific industries, undoubtedly reflecting the early, exploratory phase of
the emerging research field. Table III presents a breakdown of the industries
represented in each of the articles considered here. In Table III, an article is
termed ``general'' if it covers three or more industries, or where specific
industries are not identified. As shown, broad-based articles on international
351
 Number
30 29
29
28
28
27
26
25
24
23
22 21
21
20
19
18
17
16
15
14
13 12
12
11 10
10
9 8 8 8
8
7 6
6 5
5 4
4 3 3
3 2 2
2 1 1 1
1

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98
Year
Figure 1. Number of international services marketing articles published per
year, 1980-1998

Number of
Industry articles
General (three or more industries, or specific industry not identified) 40
Retailing 25
Banking and financial services 17
Tourism and leisure activities 8
Advertising 6
Hotel/lodging 4
Insurance 4
Construction 3
Consulting/countertrade 3
Health care 3
Restaurants/catering 3
Telecommunications 3
Leasing 2
Computer software 1
Maintenance/repair 1
Transportation/aviation 1

Table III. Number of articles in which the given topic or industry is featured,
1980-1998

services marketing made up the largest category (40), followed by the

retailing sector (25), banking and financial services (17), as well as tourism
and leisure activities (8). The remaining industries in Table III reflect an
average of just three articles published in the indicated journals from 1980 to

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International entry mode
approaches
JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999
1998. In the sections that follow, a review of research and key findings in
each of the top three categories from Table III is presented.
Key findings
General findings
Boddewyn et al. (1986, p. 54) state that research on international services is
challenging because of difficulties in arriving at precise definitions,
generalizing about services across various cultures and comparing service
providers to industrial firms. Indeed, they suggest that ``specific analyses of
each service subsector should prove more fruitful than the creation of a
general category of `service MNEs' in view of the heterogeneity of this
group''. They further assert in their early conceptual work that no new
international business theories are needed because existing theories, when
modified through simple qualifications and elaborations, can explain the
international services phenomenon (Boddewyn et al., 1986). While it
remains to be seen whether all international service activity can be explained
through existing theories, numerous scholars have advanced general findings
on international services in the intervening years since Boddewyn et al.'s
(1986) treatment.
In this section, broad, generalizable findings regarding international services
marketing from a variety of published works are discussed. These reflect the
``general'' articles category given in Table III. Along these lines, perhaps the
most programmatic research effort has been that of Erramilli, who has
addressed international entry mode approaches by multinational service
firms (Erramilli, 1990, 1991, 1992; Erramilli and Rao, 1993). Erramilli
(1990) examined the international services activities of 175 US firms in
seven major categories: advertising, banking, computer software and data
processing, engineering and architecture, management consulting, consumer
services, and several miscellaneous service providers. These firms primarily
targeted industrialized countries in the developed world. The most popular
entry mode was via a wholly owned subsidiary. Overall, market entry
behavior was characterized by considerable diversity, particularly when
compared to the manufacturing sector.
Erramilli (1990) concludes that the inseparability aspect of services is a key
factor that distinguishes firms' entry modes from those of traditional
manufacturers. Many services are relatively ``pure'', being performed and
consumed simultaneously at the same location. For these types of services,
exporting is not possible. Where such services are to be provided, the firm
must build some type of ``brick and mortar'' facility through which service
providers interact directly with buyers. However, most types of services
incorporate some element of tangibility, for example the hamburgers
provided by restaurants, contracts by attorneys, blueprints by architects,
disks by software firms, or completed structures by construction firms. To
the extent the tangibility component increases, it appears that the associated
service, or critical elements of it, can be physically exported to a distant
buyer. Furthermore, for some categories of services, exporting is possible
when the offering is conveyed by telecommunications, as in banking or
broadcast services. Finally, to the extent a service can be provided via
telephone, e-mail, or the Internet, it too is subject to being transported across
national borders in a manner similar to traditional exporting (Erramilli, 1990,
1992).
Erramilli (1992) further found that a firm's propensity to offer foreign
services through an owned subsidiary tends to increase with increases in the
353
 size of the foreign market and desire of management to maintain control over
foreign operations, and when there is a relative absence of possible partners
for joint ventures and other types of interfirm cooperation. Conversely, the
internationalizing service firm's tendency and ability to rely on owned
distribution channels appears to decrease as host country restrictions on
foreign ownership, the firm's aversion to environmental risk, its desire to
become quickly established in the foreign market and internal resource
constraints all increase in importance and influence (Erramilli, 1992). The
importance of each of these factors tends to vary with differences in
countries targeted and services offered.
McLaughlin and Fitzsimmons (1996) have pointed to numerous distinctive
factors that must be considered by managers seeking to internationalize a
particular service offering. Because of the intensity of human involvement in
services, degree of customer contact is a critical factor that is likely to spell
the difference between success and failure. The complexity and extent of
required customization is important if the service is subject to substantial
modification in light of specific country circumstances. Especially with
complex services, cultural adaptation is potentially expensive and may make
internationalization very difficult to attain. The labor intensity of the offering
is critical, particularly if the service requires a great deal of well-educated or
highly trained workers. Patterson and Cicic (1995) devised a classification
framework of international service providers in order to differentiate various
marketing practices. In their empirical study, they note that degree of
tangibility and degree of face-to-face contact with clients in the service
delivery are among the most useful dimensions with which to consider
services in the international context.
Franchising in services Few studies have investigated the role of franchising in services
internationalization internationalization. One empirical work by McIntyre and Huszagh (1995)
found that franchise-based MNEs in the final stage of internationalization
tend to have large international operations, relatively diversified expansion
plans, and generate a larger proportion of sales from overseas. Service firms
that venture abroad via franchising exhibit considerable diversity of structure
and strategy at different stages of the internationalization process. The
research suggests that franchise executives should not view smaller size or
limited experience as constraints to foreign involvement (McIntyre and
Huszagh, 1995).

Retailing sector
Williams (1992) conducted case studies with 42 internationalizing retailers
which focused on the motivations, obstacles and competitive advantages
associated with retailer internationalization. He found that the major drivers
of retailer internationalization are the desire for growth in sales, profits and
markets, as well as the proactive orientation of top management. Optimistic
managers appear to be relatively oblivious to potential obstacles, including
inadequate corporate resources and the absence of planning appropriate for
overseas markets. Retailers derive certain operating advantages based on the
scale of their operations, indicating that international success is associated
perhaps foremost with the possession of substantial resources. This latter
finding was confirmed in a separate empirical study of Japanese retailers by
Chen and Sternquist (1995). But retailers are warned to acquaint themselves
with the various challenges, risks and obstacles that characterize
international expansion.

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The Japanese approach
JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999
Simpson and Thorpe (1995) advanced a model in which successful retailer
internationalization is thought to depend on possession of a unique mix of
merchandise, a match between that merchandise and the lifestyle behaviors
of targeted consumers, a distinctive image and the establishment of a
defendable niche within the field of competing firms. Similarly, Alexander
and Lockwood (1996) point to development of brand recognition, emphasis
on the strategic development process and the development of an international
ethos within the firm as important considerations for retailing international
success.
Among the numerous treatments of specific retailing firms, Kotabe (1995)
and Sparks (1995) reported on how 7-Eleven was able to modernize its
American operations through the intervention of parent company Ito-Yokado
from Japan. The Japanese approach emphasizes a guiding vision and
unswerving dedication to discerning customer desires and exceeding them.
To achieve profit goals, firms must determine the needs and wants of target
markets and deliver value more effectively than competitors (Kotabe, 1995).
McGoldrick and Ho (1992), in examining the Japanese experience abroad,
urge managers to exercise care in striking the right balance between format
standardization (with its cost-saving economies of scale) and local
adaptation (with its greater cost, but greater sales growth potential).
Banking and financial services sector
While the literature is relatively limited, the banking and financial sector has
benefited from several studies which address antecedents to location and
performance in international markets. For example, Nigh et al. (1986), in an
empirical study spanning developed and developing countries in Europe,
Latin America and Asia, examined the role of location-specific advantages in
the international branch banking involvement of US banks. They found that
US banks tend to locate overseas branches in countries where there exists a
significant US business presence. The openness of the host country to new
foreign branches also had a significant influence on the tendency of banks to
locate abroad. These findings held for both developed and developing
countries in each region. In contrast, the study found that local market
opportunity had no significant bearing on the location of bank branches in
foreign countries.
In Saudi Arabia, Bhuian (1997) examined the importance of market
orientation in banking success. Empirical results reveal that few banks
pursue market orientation's tenets of generating, disseminating and
responding to market intelligence. Moreover, possession of a market
orientation appears to have no significant impact on banking performance.
These findings highlight the fact that concepts such as market orientation are
far from universal and entrants would do well to investigate the
considerations associated with superior performance in the local
environment before venturing abroad.
Garfein (1989) examined the role of prestige in the international success of
the American Express Company's diversified offerings in financial and
travel services. He notes that the prestige of a service is judged on the basis
of five factors: price, quality, supply, qualifications and reference group.
Prestigious services are expensive, of high quality, of limited supply, offered
to only a select group of qualified people and highly esteemed by the client's
reference group. Garfein (1989) notes that while the need for prestige
appears to be universal, the way it is revealed and satisfied may vary across
355
 cultures. Specific service characteristics and marketing tactics must be
adjusted accordingly.
Kaynak (1995) examined characteristics and determinants of credit card
usage in developing countries. He found that most credit card users tend to
be well educated urban dwellers, with high-paying, professional jobs. Given
considerable divergence in demographic characteristics, marketing efforts
should emphasize segmentation strategies. Moreover, cross-selling of credit
cards is an important strategy for increasing loyalty to the issuing bank.
Analysis of client usage patterns will help to reveal behavioral and other
factors that increase card usage.

Conclusions
In reviewing the international services marketing literature from 1980 to
1998, a total of just 124 articles were uncovered from a broad cross-section
of relevant academic journals. Consistent with the early stages in the
development of a scholarly body of work, much of the literature on
international services marketing has been largely exploratory, descriptive,
and focused on particular industries or international locations. In addition,
there have been a large number of conceptual and opinion-type articles.
While such contributions are needed in the early stages of a field, perhaps the
greatest problem facing scholars is the sheer paucity of research conducted to
date. The gaps in extant literature are very considerable indeed. While
having established an enduring place in the practitioner realm of world
commerce, work has only just begun in transforming international services
marketing into a viable field in academic research. In order for the literature
to develop, emphasis on the development of theory, constructs and
conceptual frameworks is essential.
An important prelude to internationalization research has been work on
intangibility, perishability, and inseparability as features that appear to
distinguish sharply services from products (Zeithaml et al., 1985). In
international business, it is primarily these characteristics that seem to
engender the use of local production and joint ventures as the primary
channels by which services are marketed overseas (Buckley et al., 1992;
Dahringer, 1991; Dunning, 1989; Erramilli, 1990). Where production and
consumption cannot be spatially separated, it is necessary to locate
production abroad in order to sell to foreign consumers (Boddewyn et al.,
1986; Buckley et al.,1992).
International entry for Overall, international entry for service firms will tend to be relatively more
service firms more complex complex than for traditional manufacturers. Furthermore, foreign entry via
than for manufacturers direct investment is costly, suggesting that the most successful international
service firms will tend to be larger, holding substantial resources.
Nevertheless, to the extent the offering incorporates a tangible product,
exporting, which is the most common internationalization mode of product
manufacturers, can be a viable foreign entry approach. Moreover, where the
service is offered in electronic form, internationalization becomes possible
via telecommunications, e-mail or the Internet.
Services represent the new frontier in international business for most
businesses from the developed, post-industrial nations. However, services
imply unique characteristics that pose special challenges to the providing
firms. Intensive customer contact, extensive customization requirements,
cultural adaptation and degree of tangibility all appear to be factors that
distinguish most services from product offerings in the internationalization

356 JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999


No single, all-
encompassing theory
JOURNAL OF SERVICES MARKETING, VOL. 13 NO. 4/5 1999
process. The international marketplace presents numerous additional
challenges for service providers. Success requires marketers to understand
these challenges clearly, especially as they relate to the unique
characteristics of services and the nature of individual foreign markets.
Indeed, market research and knowledge of international business are
prerequisites for the successful launch of service offerings abroad.
International business blunders typically result from inadequate knowledge
and comprehensive market research pays for itself, usually in the short run. It
allows the firm to plan for a successful venture or reveal disqualifying
problems before any investment is made.
Clark et al. (1996) note that the nature of international services is so diverse
that no single, all-encompassing theory will likely emerge. This is plausible
since no all-explaining theory exists for products either. Services theory is
likely to be complex and can undoubtedly benefit from excursions into the
literature of several domains, including economics, psychology and
communications theory. Moreover, services encompass such a wide range of
activities that they would seem to defy generalization. This may partially
account for why marketing scholars have been relatively slow to devise
externally valid theories on international services (Clark et al., 1996). Clark
et al. (1996) point to several problems associated with attempting to define
international services. For example, how can scholars delineate the
international dimension of services that are transacted across borders by
telecommunications or the Internet? ``Citizenship, residency, location of the
transaction, who or what (if anything) crosses national boundaries, all serve
to complicate the problem of definition'' (Clark et al., 1996, p. 11).
The intangible, perishable, heterogeneous, inseparable and culturally
sensitive aspects of services are all likely to pose special problems (in
addition to the foreign market entry question highlighted earlier) as scholars
attempt to define and operationalize appropriate constructs and construct
measures. Perhaps most problematic for research on international services
are attempts to define what exactly constitutes superior service quality across
various cultures.
Future research directions
Earlier, a call was made for more research on international services
marketing. Clark et al. (1996) suggest that research attention is needed in
three critical areas:
(1) the development of appropriate operational measures of international
service activity and quality;
(2) analysis on competitive and strategic behavior in international services;
and
(3) theory development that accounts for the complex cultural and political
sensitive dimensions of the intangibility of services (Clark et al., 1996).
At a more specific level, we now present a collection of research questions,
based on findings of the present work. While far from exhaustive, it is hoped
that these questions will spur inquiry into an area which has come to play
such a major role in the global economy.
Given that much of the work to date in international services has been devoid
of theory and conceptualizing, it is appropriate to investigate the explanatory
value of existing theories. Do traditional theories of marketing, especially in
357
 the international context, apply to the international marketing of services?
Similarly, do traditional international business perspectives, such as
internalization theory, the eclectic paradigm, the stages theory of
internationalization and the product life cycle theory, hold equally valid for
international services? What are the gaps in knowledge of services
internationalization that cannot be explained by existing theories which have
been largely developed with products in mind?
Internationally, with such a mix of cultures and business environments, a big
challenge is maintaining quality control and consistency in providing
services. What can firms do toward standardizing the service offering
abroad? What challenges do firms face in overcoming the asymmetry of
culture in the seller-buyer dyad that accompanies international service
exchanges?
What entry modes most Some services can be exported; others can be licensed; many more can be
appropriate for various offered only through physical facilities that the firm establishes at the
types of services? buyer's location. What entry modes are most appropriate for the various
types of services? A typology is needed which aids firms in ascertaining the
best methods for taking their particular service offering abroad.
To the extent that services must be internationalized via direct investment,
and given that this tends to be the most expensive foreign entry mode, what
are the associated implications for the internationalization of small- and
medium-sized service firms? That is, given that smaller firms may lack the
resources to internationalize via direct investment, what other modes and
strategies are available to such businesses? Are larger, resource-rich
companies always advantaged in services internationalization relative to
smaller rivals? What advantages, if any, do smaller firms hold over large
rivals in the internationalization of service offerings?
Inward internationalization can be said to involve the ``importing'' of
customers from abroad so they can consume a particular service in the
provider's home country (Bjorkman and Kock, 1997). Sectors that benefit
from inward internationalization and are worthy of future research are
tourism, education, health care, retailing, as well as international
transportation and aviation. What are the characteristics of buyers that can be
imported? What is the nature of the customer importation process? What
modes and strategies are optimal for maximizing the performance of
companies that seek to import customers?
In addition, research is needed regarding the ``importing'' of customers via
telecommunications and the Internet to take advantage of services that can be
offered via such systems (e.g. distance learning, computer software,
investments and financial instruments). What opportunities and challenges
does the Internet hold for the marketing of services worldwide? What types
of offerings are most amenable to marketing and distribution via the
Internet?
The key challenge in marketing services abroad is probably that of
overcoming hurdles associated with the unique characteristics of each
country and the fact that services are particularly prone to culture and other
country-specific influences. Services are fundamentally people-centered and
are therefore highly culture-sensitive. In service encounters, people as
``culture bearers'' interact directly in simultaneous production and
consumption. Such encounters and the communications process that they
rely on are infused with the cultural idiosyncrasies that each party embodies.

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 These are factors to which managers must give particular attention in
international services marketing.

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