Contracting for Servicizing
32 Pages Posted: 6 Feb 2008
Date Written: February 4, 2008
Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper describes how servicizing transactions mitigate some problems associated with sales transactions, but creates several others. The success of servicizing or product service systems requires manufacturers to develop contracts that attract customers while protecting their interests. Several propositions are offered to facilitate empirical testing of the concepts discussed.
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