Business services include maintenance and repair support and advisory support. Like supplies services are considered as expense items. The explosive growth of the internet has increased the demand for a range of electronic commerce services such as delivering technical support, customer training and management development programmes.
The rapid growth of business services in industrial marketing is governed by four important factors which are explained below.
- Innovations: The innovations in the field of science and technology have contributed for increasing demand in the area of business services. Advancement in computer security systems, computer enabled services, environmental control systems for office and factory buildings are examples for the effect of innovations on business services.
- Out Sourcing: It is a common phenomenon that the present day organizations are getting the services done from outside services provide. In an area where the company is not expertised such as management information functions, HR, Payrolls, Warehousing etc, the trend is towards going for outsourcing these activities. As a result more and more small and large service providers have entered the business services sector, therefore resulting in the wide opening up of business service sector.
- E-Business: The internet is creating new business opportunities and directing the organizations to do the business in different forms and ways. Services like supply chain management, customer service and support are done through internet apart from other usual ITES.
- Growth of Manufacturing Sector: Despite the decline in the number of manufacturing employees, manufacturing out put is continued to growing. With this growth the demand for services like information processing, advertising etc, are in an increasing trend.
Services in the industrial market can be grouped into two categories such as Products supported by services and Pure services.
- Products Supported by Services: The services which accompanied the physical product are equally important like the product itself. For example, the consultation services associated with the sale of computers is as important as computer itself. A significant portion of the revenue for an industrial distributor comes from the product support services. An industrial marketer can create a differential advantage for the firm through such product support services.
- Pure Services: A pure service is one which is marketed on their own right not associated with intangible product. A wide range of such pure business services included insurance, consulting, banking, transportation and such allied services. Pure services are very significant from business point of view as they constitute the major portion of the total corporate purchases. With the rise of competition in the professional services industry, the service providers such as accountants, consultants and financial advisers have found it imperative to develop highly focused marketing programmes. Such marketing programmes enable the service providers to pre establish a relationship with a client, advance its reputation as a leader in the field and strengthen its relationships with existing clients. Services are deeds, process and performances. There are several basic differences between goods and services. Services are intangible,but products are tangible. Services are consumed at the time of production, but there is a time gap between the production and consumption of products. Services cannot be stored but products can be stored. Services are highly variable but products are highly standardized. The universally recognized difference between goods and services is intangibility. Services are more intangible than manufactured goods and manufactured goods are more tangible than services because services are actions or performance they cannot be seen or touched.
Business services are those market offerings that are intangible dominant. However, few services are totally intangible. Services are generally consumed as they are produced; a critical element in the buyer-seller relationship is the effectiveness of the individual who actually provides the services. The quality of the service output may vary each time it is delivered. Services differ in the amount of equipment and labour that are utilized to provide the service. Services cannot be stored.