ABSTRACT
In examining the function and role of internal marketing of services, this chapter focuses mainly on the service industry. Today, service has become an important factor in all industries, not limited to service-providing industries such as the airline, healthcare, insurance, and retail distribution industries. In IBM's sales for 2004, the share of hardware was 32 percent, while the share of services was 48 percent, a reversal in these numbers from a decade ago. Consulting, system design, maintenance and repair, and other services have come to account for nearly half of the firm's business. Basic characteristics of services include intangibility, simultaneity of production and consumption, joint production with the customer, and the importance of the process and outcome. Lovelock and Wright propose the following eight factors of integrative service marketing: product elements, place and time, promotion and education, price and other user outlays, physical environment, process, people, and productivity and quality.
