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PII S0019-8501(99)00090-5

Industrial Marketing Management

, 1–12 (2001)

655 Avenue of the Americas, New York, NY 10010

The Purchasing of

Full-Service Contracts:

An Exploratory Study within the Industrial

Maintenance Market

Stefan Stremersch

Stefan Wuyts

Ruud T. Frambach

Increasingly, companies are extending their product/service

offerings, providing customers with full-service contracts. The

objective of this study is to obtain enhanced insight in the fac-

tors and conditions that underlie the purchase of a full-service

contract as well as DMU members’ roles in this type of pur-

chase. Full service is defined as “comprehensive bundles of

products and/or services, that fully satisfy the needs and wants

of a customer related to a specific event or problem.” The re-

sults of an adaptive conjoint study among (potential) adopters

of full-service maintenance contracts in the food and chemical

industry indicated that their evaluation of full-service suppliers

related to the full-service offering’s effect on general plant per-

formance rather than on specific maintenance costs. Also the level

of detail of information on maintenance activities and supplier

reputation were found to be highly important. Results of in-

depth interviews within customer firms indicated that the DMU

with respect to the purchasing of full-service contracts prima-

rily included the maintenance manager (initiator), the plant

manager (decider), and the purchasing manager (gatekeeper/

INTRODUCTION

In the last decade, industrial firms in different indus-

tries are increasingly tempted to follow a full-service

Address correspondence to Ruud T. Frambach, Tilburg University,

Department of Marketing, P.O. Box 90153, 5000 LE Tilburg, The Netherlands.

strategy, thus offering total need fulfilment to customers

through product/service bundles [1–3]. Maintenance

firms, such as Asea Brown Boveri, GTI, and STORK, are

offering full-service maintenance contracts, in which

they execute all curative, preventive, and predictive

maintenance activities in an entire production site. Tele-

communication companies, such as Alcatel, offer an inte-

grated total-solution approach to firms’ communication

needs. IT companies such as Digital Equipment and EDS

handle firms’ IT challenges completely. Finally, the sup-

plier of bearings, seals, and related products SKF guaran-

tees trouble-free operations through a full package of

products and services, such as technical and logistical as-

sistance, training, monitoring, tools and appliances, and

preventive and predictive maintenance.

This trend towards full service is primarily driven by

the demand side. Industrial firms increasingly demand

turnkey solutions to problems instead of products that

only partially solve their needs [4]. Furthermore, influ-

enced by management practices, such as TQM and JIT,

industrial firms do not longer view their relationship with

suppliers as an adversarial one. Consequently, many in-

dustrial firms are willing to cooperate with a specific

supplier in a single source relationship [5, 6]. This evolu-

tion at the demand side has offered suppliers a way out of

the “commodity magnet” in the markets of their core

product/service offerings, leading to higher margins and

longer lasting relationships with their customers [7].

Although practitioners thus have recognized full ser-

vice as one of the major strategic challenges for the fu-

ture, academics have spent little attention to the subject

[8]. Therefore, many questions remain unaddressed, such

as: what is full service?, what are its conceptual dimen-

sions and underpinnings?, how do industrial firms evalu-

ate a full-service offering compared with the evaluation

of individual services/products?, and who is involved in

full-service purchasing?

The objective of this study is to develop an exploratory

insight in the factors and conditions that underlie the pur-

chase of a full-service contract as well as DMU mem-

bers’ roles in this type of purchase. To do so, we will first

discuss the concept of full service by defining the con-

cept and elaborating on its underlying dimensions. Next,

we will discuss an empirical study on the importance of

different attributes in the purchasing process of a full-ser-

vice maintenance contract. Adaptive conjoint analysis is

used in this study to gain insight in the relative impor-

tance of different attributes within the trade-offs that are

made in the purchase decision-making process. Finally,

the decision-making process for full-service contracts

will be discussed, based on expert interviews with DMU

members from firms that consider a full-service offering

and with project managers from industrial maintenance

suppliers. Although the empirical study focuses on main-

tenance markets, findings also may be applicable to other

industrial contexts.

THE CONCEPT OF FULL SERVICE

To gain insight in the factors that influence the pur-

chase of full-service offerings, we must develop a clear

understanding of the concept itself. Although the strategy

of full-service provision is mentioned in the marketing

and management literature by leading scholars, clear def-

initions of the concept are scarce [1, 2, 9, 10]. Based on

the industrial service literature, we define full service as

“a comprehensive bundle of products and/or services,

that fully satisfies the needs and wants of a customer re-

lated to a specific event or problem.” The concept of full-

service strategy is clearly related to the concepts of “bun-

dling” and “systems selling.” Bundling can be defined as

“the offering of groups of products and/or services as a

package” [11], though many scholars take a more re-

stricted approach to bundling after Guiltinan [12–15].

The concept of “systems selling” can be considered a

form of bundling and a forerunner of full-service strat-

egy. In systems selling, “the seller provides through a

combination of products and services a fulfillment of a

more extended customer need than is the case in product

selling” [16]. In this way, full service extends further on

systems selling and also could be called “total system

selling” or “total solution selling.” There are two main

reasons why we prefer to use the term “full-service strat-

egy” instead of total system/solution selling in the re-

mainder of this article. The first relates to the inappropri-

ateness of the terminology of “system/solution

selling

,”

STEFAN STREMERSCH is a doctoral candidate at Tilburg

University (CentER) and Erasmus University Rotterdam, The

Netherlands.

STEFAN WUYTS is a doctoral candidate at Erasmus University

Rotterdam, The Netherlands.

RUUD T. FRAMBACH is Associate Professor of Marketing at

Tilburg University, The Netherlands and the University of

Ghent, Belgium.

since the vending process involves more than just promo-

tion and sales [17], and it concerns a real marketing strat-

egy, not just a selling approach [18]. The second relates

to the emphasis on service activities through the use of

full-

service

strategy, since service activities are begin-

ning to dominate goods even within manufacturing com-

panies [1], and the offering of total solutions is by defini-

tion a service activity [19].

Both from a managerial perspective and from an aca-

demic point of view, a clear insight into the fundamental

dimensions of full service is needed to position full ser-

vice within the current body of scientific knowledge and

managerial practices. As already implicitly indicated

above, the concept of full service is composed of two

conceptually distinct dimensions, that is, (1) bundling

strategy (a bundle of products and/or services); and (2)

extension in customer need fulfilment (that fully satisfies

the needs and wants of a customer related to a specific

event or problem).

In Figure 1, these dimensions are confronted in the fol-

lowing way:

• Bundling strategy: does the supplier firm bundle its

products and/or services? Within this dimension two

positions are distinguished: the bundled offer versus

the unbundled offer. This distinction is grounded into

the classification introduced in the bundling literature

by Adams and Yellen [20]. This classification distin-

guished three (un)bundling strategies, that is, pure

components (unbundled offer), mixed bundling (com-

ponents are available in a bundled as well as in an un-

bundled offer), and pure bundling (components are

only available in a bundled offer).

• Extension in need fulfilment: this dimension comprises

the extent to which customer needs are satisfied by the

supplier firm; the three levels of customer need fulfil-

ment are indicated in Figure 1, that is: single, ex-

tended, and total need fulfilment [18, 21, 22].

Figure 1 positions full-service strategies relative to

other (industrial) marketing strategies. It illustrates that

firms pursuing a full-service strategy can be challenged

along two dimensions. Competitive offerings may com-

pete with full-service suppliers by focusing on satisfying

specific customer needs, either by means of bundled or

unbundled offers. Alternatively, competitors may choose

Industrial firms increasingly demand

turnkey solutions.

FIGURE 1. Defining the concept of full service.

to satisfy multiple needs by offering different unbundled

solutions. This approach may appeal to customers seek-

ing high levels of flexibility in their purchasing behavior.

Therefore, it is clear that industrial customer firms will

evaluate full-service offerings differently from mere

product/service offerings. These differences are likely to

relate to both the purchasing criteria used as well as the

purchasing process itself. The high degree of comprehen-

siveness and potential implications of full-service con-

tracts is likely to positively influence both the number of

DMU members and the DMU’s heterogeneity [23]. In

the maintenance market that we consider in the present

study, this could imply that full-service contracts—in

contrast to individual service offerings—will be evalu-

ated on their influence on total plant performance, hereby

strongly involving the purchasing, operations, and main-

tenance departments as well as general management.

Thus, focus is likely to be on general performance when

evaluating the supplier’s (full-service) offer and, conse-

quently, the DMU can be expected to be relatively broad

and heterogeneous. This, of course, would have serious

implications for suppliers. Whereas suppliers offering

single maintenance services may only have to deal with

maintenance managers within the customer firm, full-ser-

vice suppliers are likely to face involvement of purchas-

ing and general management as well. This requires a rad-

ically different approach of customer targeting and has

implications for the supplier’s problem solving unit. To

understand the criteria used in the purchase decision of

full-service contracts and to identify the actual members

involved in the DMU and their individual role and influ-

ence in the buying process, we conducted an empirical

study within a major industrial market.

THE EMPIRICAL STUDY

For our study of full-service contract purchasing, we

focused on the industrial maintenance market. This

highly competitive market features both suppliers that of-

fer full-service maintenance contracts to industrial firms

and suppliers that offer bundled and unbundled mainte-

nance services. Within this industry, some customers are

explicitly adopting full-service offerings, whereas others

still purchase unbundled or packaged services. There-

fore, this market provides an interesting context for

studying the factors that affect full-service purchasing.

Since research on full-service offerings in industrial

markets is rather scarce, we studied this phenomenon

from multiple viewpoints by using multiple methods

[24–27]. Thus, we were able to gain more insight into the

construct of full-service strategy as well as its implica-

tions towards buying behavior. The research study con-

sisted of three phases (see Table 1).

In the first phase, we interviewed 15 CEOs of service

companies within three different industries, that is, finan-

Industrial customers evaluate the value

offered rather than price alone.

TABLE 1

The Research Design and Methodology

Phase Design Respondents Research Objectives Methods Time Frame

1 Semistructured interviewing 15 CEOs of (service) supplier

companies in three industries

Full-service construct: definition

Preexploratory for next phase

Grounded theory January–February 1998

2 Structured interviewing 12 DMU members within

customer firms

Decision-making process

Attributes of full-service offerings

Grounded theory March–April 1998

3 Conjoint experiment 110 DMU members within

customer firms

Importance of full-service attributes Adaptive conjoint

analysis

May–June 1998

cial services (insurance and banking), information and

communication technology services, and maintenance

services (OEMers as well as third party maintenance

companies), to gain insight in the concept of full service.

The semistructured interviews lasted about two hours

and covered the conceptual underpinnings of full-service

offerings as well as implications for marketing such of-

ferings. The interviews were content analyzed using a

grounded theory approach [28, 29]. The data were used

to provide further support for the theoretical framework

and were used as pre-exploratory data for the next phase

of the study.

The second phase of the study consisted of 12 expert

interviews (two hours each) with maintenance managers,

technical managers, purchasing managers, and general

managers of three Dutch companies in the food and

chemical industry that had adopted a full-service mainte-

nance contract with an outside supplier. This phase had

two objectives: (1) identifying the most important at-

tributes of full-service maintenance contracts; and (2) ex-

amining the decision-making process. Again, these data

were content analyzed using a grounded theory approach,

providing insight into the decision-making process with

respect to full-service contracts as well as input for the

third, quantitative phase of the study on the decision-

making criteria used by industrial customers with respect

to full-service purchasing.

The third and final phase of the study set out to iden-

tify the most important attributes that are used in evaluat-

ing the potential adoption of a full-service maintenance

contract among the nine attributes that were preselected

based on the expert interviews. For this objective, a con-

joint study was conducted using Sawtooth’s Adaptive

Conjoint Analysis (ACA) software tool to administer and

analyze the conjoint experiment [30]. Conjoint analysis

is a technique that allows the researcher to assess the rel-

ative importance of attributes that respondents use when

evaluating alternative offerings by means of a prefer-

ence-ranking procedure. The trade-offs that respondents

have to make force them to (implicitely) choose the fac-

tors that matter to them most. The procedure consists of

four phases. In the first phase, respondents are asked to

rank the indicated levels of each attribute (that are ob-

tained by means of qualitative research) according to his/

her preference. Second, respondents indicate the impor-

tance of the difference between the two extreme levels of

each attribute. Third, the respondent is asked to evaluate

combinations of different attribute levels against each

other. Finally, to check for potential inconsistencies, the

respondent is asked to indicate the probability of pur-

chasing certain contracts that are presented to the respon-

dent in full profile (rather than as combinations of certain

attribute levels). Before executing the ACA experiment,

it was pretested by five project leaders from a major Eu-

ropean maintenance company with substantial experi-

ence in the implementation of full-service maintenance

contracts. The sample consisted of 109 managers from 70

production plants of firms in The Netherlands and in Bel-

gium. The 70 plants were obtained by drawing a strati-

fied sample of the Dutch and Belgian food and chemical

industry, excluding production plants with an annual

turnover of less than 40 million guilders (approximately

22 million US dollars). The response rate at the company

level was 31.7%, including large companies such as

Heinz, Mars, Shell, Cindu Chemicals, BASF, and so

forth. Within each firm the maintenance manager, the

purchasing manager, and the plant manager were con-

tacted resulting in 109 valid personal interviews (re-

sponse rate at the individual level

⫽

16.4%). The result-

ing sample consisted of 54 maintenance and technical

managers (49.1%), 27 purchasing managers (24.5%), 19

plant managers (17.3%), and nine managers with varying

backgrounds among whom contract managers and facil-

ity managers (8.2%).

The number of subcontractors is less

relevant as long as the main contractor is

well in control.

EVALUATION CRITERIA OF FULL-SERVICE

CONTRACTS

The expert interviews provided us with nine character-

istics that were found to be the most relevant in the eval-

uation of a full-service maintenance contract and were

subsequently entered into the conjoint experiment. These

attributes (and their levels) were:

• Depth of the contract: At which level does the cus-

tomer want to cooperate with the maintenance supplier

(strategic [proactive stance of supplier who is com-

mited to objectives], tactical [supplier takes care of

maintenance and cooperates], or operational [supplier

is called upon when necessary])?

• Scope of the contract: How many maintenance suppli-

ers does the customer prefer (one contractor who takes

care of all maintenance and coordination; maximum of

10 contractors; more than 10 contractors)? This relates

to the single versus multiple sourcing discussion.

• Type of installations to maintain: Which type of instal-

lations does the customer want to include in the full-

service maintenance contract (nonproduction only,

production only, or both)?

• Degree of subcontracting: How many activities is the

full-service provider allowed to subcontract to other

suppliers (less than 33%, 33–50%, or over 50%)?

• Detail of information: How much insight in mainte-

nance performance and activities is provided to the

customer (highly detailed info, general info, or crucial

info only)?

• Supplier reputation: Does the supplier have a good,

bad, or no reputation in the industry?

• Influence on performance: What is the effect of the

full-service contract on the performance of the produc-

tion process (e.g., production losses, downtime, etc.;

none, marginal increase [1–10%], substantial increase

[

⬎

10%])?

• Influence on total costs: What is the influence of the

full-service contract on the total costs of the plant

(none, marginal decrease [1–10%], or substantial de-

crease [

⬎

10%])?

• Influence on maintenance costs: What is the influence

of the full-service contract on the maintenance costs of

the plant (none, marginal decrease [1–10%], or sub-

stantial decrease [

⬎

10%])?

The interactive ACA experiment provided a ranking of

these nine characteristics in terms of their relative impor-

tance to the respondents. The importance was computed

as the range of the utility values per attribute (computed

by the program). The aggregated results over the com-

plete sample provide a good indication of what character-

istics of a full-service maintenance contract are taken

into consideration in evaluating the contract. In order of

declining importance these attributes are presented in

Figure 2 (the y-axis represents the importance of each

characteristic on a five-point scale).

The findings show that industrial customers evaluate

the value offered by a product or service rather than its

price alone. Consequently, firms will not evaluate main-

tenance contracts solely on their (maintenance) costs, but

on the entire value proposition. Furthermore, as the pur-

chase of full-service maintenance contracts can be con-

sidered a new task buying situation, DMU members will

be more concerned about obtaining a proper solution to

their needs than getting a low price [31]. This becomes

clear when one compares the influence of the evaluation

criteria “plant performance” and “total cost” versus

“maintenance cost” on the purchasing decision of a full-

service maintenance contract. Total plant cost is consid-

ered the most important attribute by DMU members as it

constitutes the bottom line for the plant; both evaluation

criteria total cost and plant performance are significantly

more important than specific maintenance costs (at the

95% reliability level) in the evaluation of full-service

contracts.

This finding has major implications for marketing full-

service offerings. In essence, marketing full-service con-

tracts requires the development and communication of a

DMUs for full-service maintenance contracts

tend to be large and heterogeneous.

clear and substansive value proposition towards potential

customers. Rather than focusing on the price and func-

tional properties of the individual services, the full-ser-

vice offer should integrate a value proposition related to

improved plant performance and reduced costs. For ex-

ample, the industrial maintenance market traditionally

offers “hours” of electrical or mechanical engineers for a

fixed fee per hour. They often find themselves competing

against other maintenance suppliers on the hourly rate

charged. Customers shop for the cheapest rate available

within a certain quality range. Competition therefore is

on price rather than on performance or other attributes. In

contrast to this, the full-service maintenance market will

be characterized by contracts that guarantee a maximum

level of downturn of the plant and that calculate the ben-

eficial influence of the maintenance activities on the

plant’s total cost level. As such, offering full-service con-

tracts will reduce competition due to the lower level of

price transparency in the market, leading to higher mar-

gins. In the traditional maintenance market, sales mar-

gins are approximately 0.5%, whereas in full-service

markets margins are up to 10 or even 15%. Thus, full-

service strategies are to be considered powerful tools in

escaping the “commodity magnet” [7] and in revitalizing

the product/service life cycle. In addition, many indus-

trial firms are uncertain about their customers’ willing-

ness to let maintenance costs go up, to restrain costs in

other areas or to enhance a plant’s performance. This

finding strengthens industrial suppliers in their belief that

investments in increased plant performance and de-

creased plant cost are more effective than investments in

decreased maintenance cost. This creates the possibil-

FIGURE 2: Importance of full-service attributes.

ity to differentiate from competitors instead of fighting

price wars.

A second significant finding on the perceived impor-

tance of evaluative criteria of full-service offerings is that

the degree of information detail and the contractor’s repu-

tation are perceived to be as important evaluation criteria

as the improvement of plant performance. This finding

may result from a higher level of perceived risk associated

with the purchase of full-service contracts in comparison

to the purchase of individual services or subsystems [32].

The perceived risk of full-service purchases may be in-

voked by three main characteristics of the full-service buy-

ing decision [33, 34]. First, for most firms the purchase of

a full-service maintenance contract is a new task buying

situation. The low level of experience and familiarity with

the purchase situation causes uncertainty towards the pur-

chase decision to occur. Second, full-service maintenance

contracts are very complex because the takeover of all

maintenance activities of an industrial plant by the mainte-

nance supplier is involved. Third, the importance of full-

service contracts for the industrial buyer is high. Costs of

an unforeseen breakdown of the production process due to

maintenance deficiency can be substantial.

Furthermore, the results show that potential adopters

of full-service contracts do not seem to take much inter-

est in the number of subcontractors the main contractor

will use. They primarily search a key partner who con-

trols all maintenance activities on their behalf. From this

viewpoint, it is not very important for them if the opera-

tional activities are executed by subcontractors rather

than by the main contractor, as long as the main contrac-

tor takes control and full responsibility. This offers op-

portunities for companies that do not have the scale and/

or scope to develop a total solution all by themselves, but

who do have the competence to control and manage an

entire network of subcontractors in an efficient and effec-

tive way (cf., virtual organizations).

No consistently significant differences were found in

the data between the two industries considered in this

study (food and chemical), the functional domain of the

respondent or the geographical location of the firm (Bel-

gium versus The Netherlands), providing support for the

generalizability of the results of this study within the in-

dustrial service area.

FULL-SERVICE BUYING PROCESS

In addition to achieving insight in factors underlying

the evaluation of full-service contracts, the present study

aims to understand the factors that are specific to the or-

ganizational buying process of full-service offerings as

opposed to the purchase of individual products/services

and subsystems. In the literature, four main factors can

be identified to influence organizational buying behavior.

These include “buy class,” “dollar value,” “complexity,”

and “time commitment”. To comprehend industrial pur-

chasing within the context of full service, we consider

these four factors related to the purchase of full-service offer-

ings based on the results of in-depth interviews within

customer firms in different industries (see Table 1).

Buy Class

As we noted above, full-service offerings can be con-

sidered a new task buy in most industries compared with

the purchase of individual services in the same industry.

The latter commonly relates to the purchase of service

personnel hours and usually involves straight rebuys or

modified rebuys. Furthermore, full-service contracting

often coincides with the decision to outsource, which is

by definition a new task.

Dollar Value

In maintenance, full-service offerings have a much

higher dollar value than individual services. Normally,

decisions for maintenance are taken at the individual

level in buying “working hours” of mechanicial or elec-

trical engineers, together with the supplies they need in

repair or preventive activities. Compared with the closing

of a full-service maintenance contract that comprises all

maintenance activities for a period of several years on a

substantial part of the total installations and machines of

a production plant, the dollar value of traditional mainte-

nance services is evidently small.

Complexity

Full-service offerings are considerably more complex

than individual purchases. This is not only because of the

complexity of the interfaces that have to be considered in

full-service contracts, but also stems from its far and

broad reaching consequences on general managerial and

operational activities.

Time Commitment

Full-service contracts are commited to for a longer

time period than individual maintenance services. As

such, the traditional maintenance market is more focused

on individual transactions, compared with the relation-

ship perspective of full-service offerings with an average

time commitment of five years.

These four variables have the following effects on in-

dustrial buying behavior (see also Figure 3).

UYING

ENTER

EMBERSHIP

. The buying center or

decision-making unit consists of the different managers

that take up a role in the purchasing decision [35]. DMUs

for full-service maintenance contracts tend to be large

and heterogeneous, consisting of between eight and 12

members from three to five different departments. This is

consistent with the research findings reported by Ander-

son, Chu, and Weitz [31]. In the case of the maintenance

market, the DMU includes purchasing, maintenance, op-

erations, and plant managers, at both the executive and

management level. In some cases, the finance or legal de-

partment also was involved, mainly in the analysis phase

of the proposals.

OLES

DMU M

EMBERS

. Webster and Wind [36]

and Bonoma [35] distinguished between the initiator, the

decider, the influencers, the purchaser, the gatekeeper,

and the users as DMU members. The expert interviews

conducted in the present study provided an insight in the

DMU in the context of the purchase of a full-service

maintenance contract. The maintenance manager obvi-

ously is involved in an important maintenance decision.

In most cases, he is the initiator, possibly together with

the plant manager or the purchasing manager. The plant

manager is often responsible for budgeting and always

will be involved in the decision-making process of full-

service maintenance contracts. This is consistent with

findings by Johnston and Bonoma [37] who found a pos-

itive impact of purchase class, complexity of the pur-

chase, and purchase situation on vertical involvement. It

is also the plant manager who will eventually “decide”

on the full-service maintenance contract and the choice

of supplier. The most important role of the purchasing

manager is the role of “gatekeeper.” As could be ex-

pected from the literature, the alternative candidates to

provide full-service are chosen by the purchasing depart-

ment [36]. In addition, the purchasing manager is respon-

sible for the commercial aspects of the contract, and s/he

generally is also the one who formally signs the contract,

together with the plant manager. In conclusion, the pur-

chasing manager tends to play a major role in this “new

task decision,” contrary to the original hypothesis in the

theory of buy classes of Robinson, Faris, and Wind [38],

but in accordance with the framework proposed by

Dawes, Lee, and Dowling [39]. One of their findings was

that stakeholding implies increased influence in a direct

and indirect (through participation and information con-

trol) manner. Purchasing managers have substantial

stakeholding in the case of full-service offerings because

of the offer’s impact on total costs and the number of

suppliers, thus explaining their high level of influence.

The production manager is involved and consulted (“in-

fluencer” and “user”), but he plays no significant role in

the negotiations. His input is restricted to the overall

framework of the contract, in a strict sense as to what

machines will be maintained by the contractor. In gen-

eral, the production manager also has a more negative at-

titude towards full-service offerings. The production

manager would like to keep control over the plant,

whereas full-service contracts generally lower that level

of control. Although the financial department or the legal

department often are consulted on accounting regula-

tions, delivery terms and so forth, their “influence” is

limited. We can conclude then that the following three

DMU members occupy leading roles in the decision-

making process relating to full-service maintenance con-

tracts: the maintenance manager, the purchasing man-

ager, and the plant manager.

ENGTH

THE

ECISION

-M

AKING

ROCESS

. Results

of the present study indicate that decisions on full-service

offerings often take a long time due to their high com-

plexity and importance. This is consistent with findings

by Anderson, Chu, and Weitz [31]. The average decision

process lasts about a year.

The findings concerning the decision-making process

have important implications for marketing full-service

offerings as compared with more traditional, single ser-

vice, offerings. Maintenance companies (and OEMers)

will have to broaden their marketing and sales approach

in an horizontal as well as a vertical way. Higher man-

agement levels are involved in the buying process as well

as other departments, which in the past were not, or limit-

edly, involved in purchasing maintenance services. Fur-

thermore, other buying motives will come into play

through the involvement of different people. Mainte-

nance firms also will have to be prepared for the longer

decision-making process and develop specific tools, for

instance to calculate “total cost of ownership,” for spe-

cific phases throughout the extended buying process.

CONCLUSIONS

This study focused on a rather new business practice:

full-service offerings. We first constructed a theoretical

framework for full-service strategy, grounded in data ob-

tained at both the customer and supplier level. This pro-

vided us with enhanced insight into the definition and

conceptual underpinnings of the full-service construct.

As such, we defined full service as “a comprehensive

bundle of products and/or services that fully satisfies the

needs and wants of a customer related to a specific event

or problem.” We further examined how full-service of-

ferings are characterized by a different set of evaluative

attributes and go through a different organizational buy-

ing process compared with individual service offerings.

Findings, based on qualitative and quantitative research

in the Dutch and Belgian maintenance market, indicated

that full-service contracts can be considered a new task

buy with high dollar value, high perceived complexity,

involving long-term mutual commitment and therefore

are comprehensively evaluated by decision makers

within the customer firm. The influence of the full-ser-

vice offer on total cost and plant performance was found

to be significantly more important than specific mainte-

nance costs. This provided support for a more holistic

market approach in exchange for higher margins. Fur-

thermore, it was found that the reputation of the contrac-

tor and the level of information detail provided on main-

tenance activities were highly important attributes,

whereas the number of subcontractors used by the main

contractor was considered to be less important. Concern-

ing the decision-making process, it was found that the

full-service offer’s characteristics related to buy task

newness, dollar value, complexity, and time commitment

transferred in broader, more heterogeneous, and gener-

ally larger DMUs than was conventional for individual

maintenance services. In addition, vertical commitment

was higher, resulting in higher levels of involvement of

top management, such as the plant manager, and of spe-

cific departments, such as purchasing and maintenance.

In most cases, the maintenance manager acts as initiator,

whereas plant managers generally take the final decision.

These findings have serious implications towards mar-

keting full-service offerings as they demand considerable

adaptation of the marketing and sales organization of the

supplier.

Several limitations of this study should be noted. First,

the results must be considered exploratory due to the ab-

FIGURE 3. A model for industrial buying behavior towards full-service offerings (adapted from [40]).

sence of a profound theoretical background on full-ser-

vice offerings. Though this article attempts to compose a

conceptual framework of full service, additional efforts

are needed to gain a clear and comprehensive view on

this complicated business phenomenon. Also, further

work is needed to generalize the findings of the present

research towards a more general theory on full-service

purchasing. Future research that controls for certain in-

dustry-specific and product-specific characteristics is

needed to provide further support for our findings. Fi-

nally, a consistent research stream towards full-service

offerings is needed. While becoming a widespread and

very relevant management practice, research on full-ser-

vice offerings is scarce. Since full-service strategies chal-

lenge conventional ways of thinking in both business

practice and academics, we feel the issue deserves further

attention.

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