Transcript Ch15
Chapter 15 Global Services Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. Differences Between Services and Goods • Definitions and distinctions – Goods are physical objects, devices, or things. – Services are deeds, performances, or efforts. – Goods are fixed in form and require physical distribution. – The main difference between goods and services is intangibility. Services are generally more intangible,personalized, and perishable. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. Airline Offerings Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. The Role of Services • In the U.S. economy – The service sector produces 80.5% of U.S. GDP. – Financial and technical services exporting and importing are both growing rapidly. – Total services imported into the U.S. in 2005 was $319 billion. • In the world economy – Services account for 66.7% of the GDP. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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 • Obstacles to service trade abroad – barriers to entry – performance – discriminatory and nondiscriminatory regulations Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. Corporations and Involvement in International Services Marketing • E-commerce has played an important role in expanding global services. • Many service providers know customers “virtually” only. • Language barriers slow e-commerce service expansion. • Typical international services include financial, construction, design, engineering services, legal and accounting, teaching, and management consulting. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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 economics changes in foreign countries can create the need for services expertise. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. 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. Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.