Characteristics of Service Product

Page 1 of 2

Characteristics of Service Product

By | June 2010
Page 1 of 2
The growth in services has also been accompanied by the rising share of services in world transactions. Not only has the services sector grown in terms of its share in global output and employment, its share in total trade has also grown rapidly in this period. The growing importance of services sector and the corresponding rise in its role in integrating the world economy has led to a stream of literature that examines different aspects of trade in services. The service production process is much more complex and ambiguous. Some products sit on either end of the continuum as either a pure good or a pure service, but most products lie somewhere in between the two. A pencil would be considered more of a pure good; where as, baby sitting would be considered more of a pure service. Restaurants offer a combination of both a goods and services. Servitization Much of the growth in the service sector has been driven by attaching “value added” service components to goods in order to gain a competitive advantage. This was servitization at work. My mind started dreaming up other services or goods that could be bundled with the camcorder to increase sales at an even higher price. They could offer movie making classes and editing services. They could also include coupons for complementary goods, like: microphones, lights, and recording tapes. Servitization can be used to do more than provide a competitive advantage. It can drive the sales of a secondary product. Apple Computer is no longer just a hardware company. They are a service company as well. When you buy an Apple computer, you have access to a help desk and computer classes. Plus, you are given numerous opportunities to upgrade your services and receive more value. This not only allows Apple to sell more computers, it provides the company an opportunity to sell additional service product upgrades. Even service companies use added services to drive revenue. Funeral homes, for example, package caskets, embalming,...