International Services

Marketing

• Definitions and distinctions

– Goods are physical objects, devices, or things.
– Services are deeds, performances, or actions.
– Goods are fixed in form and
require physical distribution;
services are delivered as
problem solutions on or off-site.
– The main difference between
goods and services is intangibility.
Services are generally more
intangible, personalized,
and perishable.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 Nature of services
Goods vs Services

1. Intangibility
2. Heterogeneity (Variability)
3. Perishability
4. Simultaneous Production and
Consumption

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Nature of services
Goods vs Services

1. Nature of the output (Performance)

2. Customer involvement in production
3. People as part of the service
4. Likelihood of QC problems
5. Difficult to evaluate
6. Lack of inventories\
7. Greater importance of time factor
8. Electronic channels of distribution

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Linkage between Services and
Goods

• Goods and services complement one

another. Goods frequently require
servicing after their purchase.
• Goods and services are marketed in
varying packages or combinations to
targeted customer groups
• Customer groups have
differing perspectives on
the features and provision
of services.

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Nature of Services
Categories of Services

• People Processing Services:

– Customers are part of the production process

– “Service Factory” eg. massage

– Use is simultaneous with production

– Geographic presence

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Nature of Services
Categories of Services

• Possession Processing Services

– Tangible actions to physical objects

– Object not customer involvement

– Geographic presence

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Nature of Services
Categories of Services

• Information Based Services

– Collecting, manipulating, interpreting and

transmitting data

– Minimal customer involvement

– Limited physical presence

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Stand-alone Services

• Services compete with goods and compete

with other services (e.g., video rentals).
• Services are intangible and perishable,
presenting problems in matching service
capacity to variations in demand.
• Consumption of services
requires provider and
customer involvement.
• Service consistency
is required.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 Tangible/intangible offerings

Distribution
Airlines
Price

Vehicle

Service
Frequency

Transport Transport

Transport
Food and
Drinks
Intangible

Tangible

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Problems with Services

• Market transparency
– Consumers have difficulty in evaluating services
because customers may use (or require )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 more culturally
sensitive than products.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 Global Transformation of
Services

• Reduced governmental regulation

– Transportation, banking, and telecommunications
• Decreased regulation by industry groups.
• Technological advances are opening up and
increasing worldwide service
trade opportunities.
• Both labor-intensive and
technology-intensive
services are expanding
into global markets.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 Globalisation Drivers

• Common customer needs

• Global customers
• Global channels
• Global Economies of scale
• Favorable Logistics
• IT
• Government policies and regulations
• Transferable competitive advantage

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 International Trade Problems
with Services

• Data collection problems

– The quality of data collected on the service trade is
poor due to the difficulty of quantifying and tracking
the delivery of services.
– Services lack of homogeneity
for transparency, making
comparisons and the
measurement of the
effects of services
in global markets
difficult .

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 International Services
Marketing

• Typical International Services

– Banking and financial services
– Construction, design, and engineering
services
– Legal and accounting services
– Communication services
– Teaching and training services
– Management consulting

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith

 Starting to Market Services

• 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 the
domestic market where the application of services
expertise presents opportunities for market entry
and expansion.
• Identify and understand transition points
– Domestic and economics
changes in foreign countries
can create the need for
services expertise.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 International Services
Marketing

• Strategic Implications
– Identify the nature and the aim of the service offering
core.
– Communicate the performance of the service on both
the mass level and the personal level.
– Train organizational personnel to convey the spirit,
values, and attitudes of the corporation.
– Address issues of service
pricing and financing.
– Consider the distribution
implications of international
services.
www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith
 Thank You

www.ebsi.ie INTERNATIONAL SERVICES MARKETING Thomas Smith