ABSTRACT
This chapter lays the foundation for the rest of the text, introducing the broad changes in the global economy that have shaped today's business environment, in which it is of utmost importance for all organizations to gain the capability to differentiate through service. This chapter addresses global economic trends, from goods to services, and new experiences. The examples throughout demonstrate the impact of these changes on organizational focus – that differentiation by product alone cannot lead to sustainable excellence and firm performance. It highlights fundamental differences that service managers and marketers must address, and new ways of thinking and leading that they must adopt. This chapter also provides a summary of how technology and web-based touchpoints have evolved in a service context. Critical theories and ideas, such as value co-creation, design thinking, and ‘servitization’ are introduced, and their relevance to the industry is explained. Ultimately, this chapter highlights how and why the intelligent application of service management and marketing theory is essential to success in today's competitive marketplace.
