Servitization

Servitization is a transformation process in which a manufacturer changes from selling products to selling integrated packages of products and services that are tailored to the specific needs of customers. This concept is particularly important in the context of the service economy, as services play an increasing role in providing value to customers. That is, manufacturers can be more competitive and sustainable by adding a service component to their products, while customers can have their satisfaction levels increased. This entry reviews the concept of servitization, examines its benefits, discusses its implementation challenges, and ends with a presentation of two classic application examples.