What is importance of internationalization? Everyone knows about the process of internationalization, whether its internationalization of manufacturing industry or service industry, the word and process of internationalization makes every localization project simpler, quicker and even cheaper, with a small risk of your time to time requirements. But the process of internationalization could also be a complex, time consuming task that every firm is not equipped with. The aim of this essay is to provide insights of affects caused by nature of services on those opportunities which are provided by internationalization. This essay will initially discuss main difference between globalization and internationalization, what are services? Internationalization and services, how services businesses are changing their nature and their priorities and then issues and implications because of internationalization faced by marketers.
There are difference in perception about globalization and internationalization; both terms are used as interchange to each other which is a big mistake. Many scholars insist that these are two distinct terms. Definition of globalization according to European Union is its a process of movements of goods, technologies, capital and people from one part of the world to another. In economic terms globalization could be defined as an increasing integration of economies across national borders, it would be through trade in goods and services, the migration of labour and investment in capital. Contrary to this Internationalization is process which refers to the growing significance of trade, relation, alliances etc between or among the nations. In the process of internationalization nation still remain the primary unit, even relation among nations become increasingly more important (Herman E. Daley, 1999).
A business absolutely devoted to services will have only worry about profits, they will be embarrassingly high (Henry Ford). Consciously or unconsciously, everyone in this world does render some services or others. Services marketing is based on relationship and value, the main use of services marketing could be market a product or service. Marketing a service based business is quite different from marketing a goods based business. Some of the main differences are
- The buyers purchase is intangible.
- The service may be used on the reputation of single person repute.
- It's more difficult to compare the quality of similar services.
- The buyer can't return services.
Now question arises why there is growing need of Services Marketing in current era of marketing? Many metropolitan area economies have been changed now. These are no more connected to global market and manufacturing industry is not dominating industry. Economic growth of metropolitan areas is caused by rise in service sector. The international marketing of services is increasing its importance in the global economy. (White, Griffith and Ryans, 1998). According to research by Patterson, Cicic and Shoham in 1997 that services accounts for 25% of total world trade and growing faster than trade in manufacturing. The internationalization of service is core of economic globalization. Main function of service industry is that it provides links between geographically dispersed economies and it plays a fundamental role in growing interdependence of market and activities of production across nation. For developing countries growing internationalization in technology and services has both opportunities and challenges. The image of services have been changed revolutionary because of high advancement in technology, until recent it was common to know services as non tenderable activities with low cost of productivity.
What is nature of services? So far much have been said in marketing could be applicable on to both either product or services, so what is special in services marketing? There was a level in marketing when one universal theory of marketing was applied to every type of business, whatever the nature of business was. However, the nature of a particular service business may dictate a need to place much greater emphasis on certain marketing elements, which in turn could lead to different marketing approaches ( Sheram and Soubbotina 2000). It's argued many times that characteristics of services are very unique and these are the characteristics which differentiate services from goods or manufacturing. The most common four ascribed of services are
Basically services are to large extent abstract and intangible, these are non standard and highly variable. Services are produced and consumed at same time, with customer participation in process. It's not possible to store services in inventory. Because of huge diversity in services business, it is very difficult to put a neat definition of services, for instance some services don't posses all ascribed mentioned above, in fact some services even have opposite attributes to above. Great importance to marketers for services is its special qualities. Services always create opportunities for businesses for instance significant opportunity of resource sharing such as through line rental or timeshare agreements, where personalized access to telecommunications or a holiday home is kept at an affordable level by sharing access to goods, physical facilities, system and expertise. How priorities are changing in service sector? let's take some examples of different service sector to discuss this issue, first an example from residential medical and social services, during the past thirty years, many in fact most of the long stay hospitals have been closed. The major reason for this is the responsibility for those who occupied these beds have been changed to health to social service departments, or families, voluntary and private care. The major reason for these change in priorities are people developing knowledge and their thoughts about service industry. The combined effects of these changes and priorities have been that long stay medical centres are sharply changing into social services care group (D Greaves 1999). In Irish voluntarily and social services organization, changing in priorities have happened or underway, Ireland presents a unique model for the development of its social sector and services as statutory involvement into social service remains scarce until 25 years. Unlikely previous practice of these service organizations, now they are more focusing on their legal context, funding of these organization, their staffing approach, they are promoting community employment programmes. The Irish case of changing priorities in service sector is very unique in development.