The importance of servicing
In the competitive environment of the global
marketplace it is not sufficient anymore to just sell products.
Instead, the foreign buyer will expect - even demand - that
these products be supported by the exporter. This support
is provided in the form of product servicing. The significance
attributed by customers in all parts of the world to service
facilities is often underestimated by the manufacturer;
customers will usually give preference to locally produced
goods if they have the slightest suspicion that the after-sales
service provided by a foreign supplier will not meet their
On the other hand, a high standard of service
can give an otherwise undistinguished product a competitive
edge. The success of Volkswagen in the US in the 1960s serves
as a good example in this regard. Although there was an
increased tendency in the USA to buy "second"
cars, this did not really explain why: "The second
car should be a VW, the most saleable buy at its price...
but hardly the roomiest, smartest, fastest or technically
best small car that Europe produces today. The answer lies
in the early service and dealer concept." (Mellon 1965) Chapter Four
An international servicing strategy
A clearly defined international servicing
strategy is essential in today's competitive environment.
The objective of such a policy should be to ensure the satisfaction
and goodwill of the foreign customer and, consequently,
to secure repeat purchases as cost-effectively as possible.
Bering in mind that we are dealing with sales in far-off
markets, the initial investment involved in setting up servicing
facilities and ensuring the availability of trained personnel,
can be quite considerable.
So how do you provide service support for
the products that you sell? There are essentially two different
ways that you can approach the organisation of servicing
facilities in foreign markets:
Adapting the product to require less
- You can seek out and appoint reliable distributors that
already have an organised servicing network compatible
with your product to do the servicing on your behalf.
To this end you may need to train your distributor's support
personnel at your company's premises or you may choose
to travel to the distributor and do the training there.
Alternatively, you could consider seconding one or more
company maintenance personnel to the distributor to undertake
the servicing that is required.
- You might want to adopt a direct servicing approach
which requires you to fly out to the customer whenever
servicing is necessary. This option is often used for
capital equipment of considerable value and size. Alternatively,
where sales are concentrated in one geographical area
(say in Europe), preventive maintenance staff may be based
In some countries, the concept of routine
or preventive maintenance is not part of their culture.
As a result, products may have to be adjusted so that they
require less frequent maintenance and special attention
has to be given to features which may be taken for granted
in more sophisticated environments.
Taking local circumstances into consideration
The literacy and educational levels of a country
may also necessitate changes being made to product instructions.
The Brazilians, for example, successfully overcame the problem
of the low literacy and technical skills of Third World
users of their sophisticated military tanks by including
video cassette players and video tapes with detailed repair
instructions as part of the standard instruction package.
Planning for service
It is clear that planning service for support
in exports involves the balancing of a number of interests
and the compliance with multiple requirements. Within a
firm, the resources and potential for development offered
by research and design, the extent of production facilities,
the existing product range, the services already available
to customers, the availability of finance for additional
investment and the skills of the company's personnel have
to be taken into account.
In relation to the target markets in question,
the opportunities and constraints arising from consumer
demand need be considered. Technical standards, government
regulations, tariff and non-tariff barriers, transport and
distribution services, the characteristics of marketing
intermediaries and competition also have to be taken into
account. Armed with information about all these aspects,
the exporter will be in a position to decide:
- What modifications are practicable without substantial
cost increases and what, in effect, would be regarded
as major changes to the product.
- How the methods of production can be adapted and whether
the enterprise can take advantage of slack periods in
production to increase export sales, thus assisting the
company in achieving year-round economies of scale in
- Which new products are likely to meet the requirements
both of overseas markets and the domestic market.