The Handbook of Innovation and Services
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The Handbook of Innovation and Services

A Multi-disciplinary Perspective

Edited by Faïz Gallouj and Faridah Djellal

This Handbook brings together 49 international specialists to address an issue of increasing importance for the world’s post-industrial economies; innovation as it relates to services.
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Chapter 29: A Customer Relationship Typology of Product Services Strategies

Olivier Furrer


Olivier Furrer 29.1 Introduction With the advent of the service economy (Gadrey, 2005), product services (i.e. services offered as complements to tangible products) have taken on critical roles in the competitive arsenal of many manufacturing firms (Furrer, 1997, 1998; Gebauer et al., 2005; Malleret, 2006). For example, IBM has become a service provider more than a manufacturer of tangible products (BusinessWeek, 2005). Following Anderson and Narus (1995), this chapter considers product services to include much more than after-sales service, such as technical problem-solving, equipment installation, training or maintenance. Rather, product services also include programs that help customers design their products or reduce their costs, as well as rebates or bonuses that influence how customers conduct business with a supplier. Despite their increasing managerial importance, academic research on the strategic role of product services remains embryonic (see Bowen et al., 1989; Dornier, 1990; Furrer, 1997; Horovitz, 1987; Mathe and Shapiro, 1993), and the concept still appears vague and ambiguous. Nor has existing research integrated product services into a coherent conceptual framework. Therefore, this chapter further refines the concept of product services and integrates it into a relationship marketing framework (Berry, 1995; Sheth and Parvatiyar, 1995), which suggests a consistent and managerially relevant typology of product services strategies. The remainder of this chapter is organized as follows. First, in section 29.2, I define product services and discuss their strategic role, which depends on their position on the tangible product–service continuum. In section 29.3 I present a typology of four product service...

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