Exploring service needs in the Chinese manufacturing industry

Abstract

Purpose The purpose of this paper is to attempt to explore service needs in the Chinese manufacturing industry and address the research question: what clusters of service needs exist in the Chinese manufacturing industry? Design/methodology/approach The data on service needs were collected between 2006 and 2007. The data collection was done through personal interviews with senior manufacturing executives. The data are analysed through factor and cluster analysis. Findings This paper explores five different clusters on service needs: highly price‐sensitive on basic service needs; highly sensitive on logistic performance of basic service needs; preventing product breakdowns for very reasonable prices; knowledge seeking; and seeking for cost‐efficient outsourcing partners. Research limitations/implications The study is based on 172 companies, but the external validity (generalizability) of the findings could not be assessed accurately. Practical implications The findings have important management implications in terms of aligning the service organisation with the Chinese service needs. Originality/value The paper contributes to the existing research in two different ways. First, the study demonstrates the value of factor and cluster analysis as a segmentation approach in industrial markets even in the particular context of Chinese business culture. Second, the exploration of service needs describes idiosyncrasies of Chinese manufacturing industry from a complementary, service management perspective.

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