Preferred Level of Servitization in Select Industrial Services

The purpose of the research was to study what ails Servitization. It was also an endeavor to study if there is an optimized level of servitization for which customers tend to pay maximum price premium. A thematic literature review, followed by qualitative research involving in-depth interviews, adopting an inductive approach was used as methodology. It was found that servitized products command a price premium, but the preferred level of servitization is 20–40% at which the price premium peaks (10–20%), beyond which customers do not prefer servitization. Brand Equity of service provider, Location of service provider and Quality of service provider, emerged as the three salient attributes that contributed towards willingness to pay for servitized products.