Global Service

Management
Corporate Involvement in 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

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 Differences Between Services
and Goods
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.

3
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.
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 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.

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Tangible/Intangible Offerings of Airlines
Distribution
Airlines
Price

Vehicle

Service
Frequency

Transport Transport

Transport
Food and
Drinks
Intangible

Tangible

Source: Adapted from G. Lynn Shostack, “Breaking Free from

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

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 The Role of Services
In 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.

8
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.

9
 International Trade Problems in
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 .

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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 entry
barriers
– 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 nondiscriminatory
regulations

12
 Governmental Responses to
Services Problems
Trade liberalization developments
– OECD code on invisible transactions (1950’s)
– GATT and the Tokyo Round
– The Government Procurement Code
– Subsidies and Countervailing Measures Code
– The Uruguay Round and the General
Agreement on Trade in Services (GATS)

13
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 the
domestic market where the application of services
expertise presents opportunities for market entry
and expansion.
Identify and understand transition points
– Domestic and economic changes in foreign
countries 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 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.

15
Thank You!!!

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