Saturday, September 25, 2010

Productization and Servitization

Products and services are all part of the same continium and that becomes even more apparent when ones looks at the attempts of service and product companies to come closer to each other.
Productization efforts are visible when service companies try to standardize their offerings by neatly packaging and labeling their offerings. For example, Infosys developed acore banking solution, Finacle. Similarly, Thomas Cook, Cox and Kings and several other travel agencies are currently getting a large portion of their turnover from packaged vacations.
On the other hand, product companies too are busy value adding by integrating services. Rolls Royce sells aircraft engines by including all operations and maintenance functions as a package. Chevrolet is trying to increase their car sales in India by guaranteeing an upper limit on the maintenance spend on a car for the first three years. Asian Paints offers services relating to selection, estimation and even application of their product. Lafarge and ACC Cements are offering civil engineering advice to customers of their high-end cements.

In such a scenario, it is increasingly becoming difficult or maybe even unnecessary to classify sellers as product or service companies

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