Exercise – It is important to get across the idea that products and services are not always very dissimilar. Indeed, it is sometimes misleading to distinguish between the two. In the study guide on the CD, the example of Rolls Royce and other manufacturing companies is used to make the point that most of these companies derive the majority of their revenue by providing services.

Try giving the class an example of a company that seems to be a manufacturer (e.g. BAE Systems, Caterpillar earth moving equipment, Xerox copiers, etc.) and pose the question, ‘What services would a company like this need to supply to its customers?’ Then, direct the discussion to include maintenance, training, consultancy of how best to use the equipment, updating, installation of planning and control systems and other software, providing finance for purchase, and so on. A good example is BAE Systems who manufacture aircraft for the military. Rather than purchase the aircraft, many governments are choosing to buy capability. This means contracting for many thousand hours of operating capability per time period. All our Air Force has to do is provide the pilots. BAE Systems does everything else, and probably owns the aircraft also.