International bank retailing: identifying cross-cultural differences in consumers’ service-quality expectations
Over two decades ago, Carman and Langeard (1980) argued that out-of-country market expansion is a more risky strategy for a service firm than, for example, concentric diversification or new service development in existing markets. Similarly, they show how out-ofcountry expansion is more risky for a service business than it is for a manufacturer of physical items. A major element of risk relates to the mode of market entry. Since a feature generally attributed to service industries is ‘inseparability’ or ‘simultaneous production and consumption’1 there is less potential for lower-risk entry modes such as exporting. Consequently, the potential for incremental expansion is less than for physical goods, and a higher level of commitment of financial and other resources is required. Risk also increases with lack of familiarity with the features of diverse environments, for example, political and legal imperatives; nature of the infrastructure and business customs and practice. As risk increases so too does the need for valid and reliable information for decision-making and control. Yet many authors have commented on the lack of research concerning international services (Eriksson et al., 1999; Knight, 1999). McGoldrick and Ho (1992) for example, state that ‘reliable, comparative information on market conditions remains a major problem; retailers must often base location decisions abroad on far less sophisticated information than their location decisions at home’ (p. 61). Further, they add, ‘why should retailers assume that the same pattern of needs and solutions will apply worldwide?’ (p. 72).