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Marketing Plans for Services: A Complete Guide, Third Edition by Adrian Payne, Pennie Frow, Malcolm McDonald

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Chapter 1

Marketing and services

The growing importance of the service sector

Since the Second World War, North America and Western Europe have seen a steady and unrelenting decline in their traditional manufacturing industries. Their place has been taken by numerous service-based enterprises that were quick to spot the opportunities created by both organizational needs and by the increased personal affluence and the consequent raised lifestyle expectations of the population.

There has been very substantial growth in services over the last two decades. This growth has been widespread but is now especially pronounced in developing countries where services represent the engine of their economic growth.

So successful has been this transition from an essentially industrial society that today more than 70 per cent of most Western economies are now in the service sector, whether measured in terms of income or numbers employed.

Figure 1.1 shows estimates of the size of the service sector as a percentage of gross national product (GNP) for different countries These statistics, published by the US Central Intelligence Agency in 2011,1 show the dramatic transformation of the global service landscape. Hong Kong leads the world with 92% of its economy in the service sector. China’s economy a few decades ago was principally an agricultural economy. The service sector in China has grown by 191% over the last 25 years. Today, services represent over 44% of China’s GNP.

Figure 1.1 Size of ...

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