Globalization, Privatization and Free Market Economy

ANDERS MAJKGÅRD AND D. DEO SHARMA

Professional business services are experience goods characterized by intangibility, heterogeneity and inseparability, rendered by an expert toward problem solving. Service quality is determined by the perceptions of individuals and is sometimes impossible to evaluate, even after purchase. Consequently, the content in the relationship between the service provider and the client is important. In this chapter, we base our discussion on service quality on two interrelated fields, namely, the service marketing literature and the industrial marketing literature. Trust, commitment and adaptation are identified as constituents of service quality. This chapter is based on face-to-face interviews with the decision makers in two international Swedish service firms.

The international marketing of services is a neglected area of research. In the last decade, however, the crucial importance of services to the economy has been increasingly recognized, partly in response to the growing international trade in services. We are also witnessing the development of a new paradigm within service marketing, which focuses on value and value creation, opening up a marriage between service quality and relationship quality ( Norman and Ramirez, 1994). Service quality plays an important role by increasing benefits and delivering value to customers. It has recently been accepted that service quality not only is important for profitability, but also is a precondition for the very survival of firms. The opening of the global market in services and the increasing importance of foreign investments in them have further highlighted the importance of service quality for the survival and profitability of firms.

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