Service Marketing

Globalization is continuing at an inexorable pace. A survey of 497 senior executives around the world conducted by the Economist Intelligence Unit for AT&T say that almost 42% of firms will be deriving half or more of their revenue from foreign markets in coming years (The Economist, 2007). Companies will have to make use of variety of strategies to enter new markets to achieve international growth be it service or manufacturing sector. There are many routes for expansion such as, Greenfield investment, Joint venture, Mergers and acquisitions, sales or marketing alliances (The Economist, 2007). There will be many obstacles to achieve this. Services are an important part of global economy and this is increasing. While most of the international business strategies and theories which are good for manufacturing sector could be used for service firms but there are critical differences between goods and service and this effects international expansion strategy (Sarathy , 1994). A service firm operating in foreign land has a choice of three general entry mode strategies – full ownership arrangement, joint venture arrangement, and franchising arrangement (Kim, 2005). The main characteristics first discussed in the early services marketing literature are generally summarised as intangibility, inseparability, heterogeneity and perishability (Regan, 1963, Zeithaml et al 1985). This essay critically analyses how these different characteristics of services influence the global expansion strategies of service marketing. First this essay looks at different characteristics of services, then different concepts of international expansion models and how these vary with the nature of services and up to what extent these influence the expansion strategies.
The literature of services marketing highlights intangibility as one of the key characteristics of services. Regan (1963) introduced the idea of services as activities, benefits or satisfactions which are offered for sale or

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