Price Strategy is different in Service Businesses

Thomas, D. (1978, July). Strategy is Different in Service Businesses. Harvard Business Review. https://hbr.org/1978/07/strategy-is-different-in-service-businesses
behind paywall 
  • The more abstract and complex the service, the greater the need to develop reputation. 
  • service businesses rely entirely on type and quality of service (reputation) they deliver 
  • being consistent in the delivery of the SAME quality of service 
  • value of a service is determined by a customer ... not the provider .. but the value can be marketed to customers so that they can perceive it
  • customer must have some means of "experiencing" the service .. to recognize value 
  • further complicated by the need to review, revise and update services (a moving, ever changing target) 
  • capital is typically a barrier in product based businesses - service based businesses have no such moat to prevent others from competing  

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