Product servicing

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 needs.

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:

  • 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 abroad.

Adapting the product to require less servicing

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 production.
  • Which new products are likely to meet the requirements both of overseas markets and the domestic market.