Do customized service packages impede value capture in industrial markets?

Michael Steiner (), Andreas Eggert (), Wolfgang Ulaga () and Klaus Backhaus ()
Additional contact information
Michael Steiner: University of Muenster
Andreas Eggert: University of Paderborn
Wolfgang Ulaga: IMD Lausanne
Klaus Backhaus: University of Muenster

Journal of the Academy of Marketing Science, 2016, vol. 44, issue 2, No 2, 165 pages

Abstract: Abstract Capturing the value of industrial services is an issue of growing concern as services increasingly define manufacturing companies’ competitive market positions. In business markets, suppliers often create customized service packages (CSPs) to avoid difficult pricing decisions or tedious negotiations. However, using a unique dataset of responses from more than 450 managers collected through telephone-assisted online questionnaires, this study shows that the managerial practice is suboptimal. Customers’ willingness to pay for CSPs is almost 5% lower than it would be with separate assessments of the same service elements, which represents substantially lower value capture potential. Buying firms with strong purchasing power demand greater price discounts for CSPs, though the presentation format has less influence among large and experienced buyers, as long as services support customer processes. Switching from CSPs to separate service offerings can enhance supplier profitability, but it requires advanced marketing capabilities to understand, document, and communicate customer value in business markets.

Keywords: Industrial services; Customized service packages; Willingness to pay (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://link.springer.com/10.1007/s11747-014-0410-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joamsc:v:44:y:2016:i:2:d:10.1007_s11747-014-0410-9

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/11747

DOI: 10.1007/s11747-014-0410-9

Access Statistics for this article

Journal of the Academy of Marketing Science is currently edited by John Hulland, Anne Hoekman and Mark Houston

More articles in Journal of the Academy of Marketing Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().