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2. Growth in intermediate demand from Firms:
Intermediate demand from firms means creating or filling the need of
inputs provided to manufacturing and other sectors of economy.
Depending on intermediate demand firms are divided into three
categories:
  a)Specialists Firms:       Set up to provide services previously
     carried out by existing firms. e.g: Engineering services,
     personnel services.
  b)Alternatively Specialists Firms:       Set up to provide new
     services. e.g :data processing.
  c) Business Buyers: They use services like
     accounting,construction,banking,insurance,legal,research,adver
     tising,public relations,training,shipping,consultancy services.

Analysis:              Companies and other organizations rely on specialist
   services as it is the need of the day to take hold on technological and
    competitive pressure with lack of available resources organizations
  encourage to use outside services other than internally based services.

3. Growth in Final demand from Consumers:
As societies get wealthier people generate final demands to ordinary
and l uxorious services.
According to Law of Economies:
     “As societies get wealthier and as the marginal utility derived from
     additional increments of goods decline then people turn to services
                                 expenditures.”
  It tells us about the relationship between income &spending patterns on
     goods & services.(travel,health,recreation,education,with changing
                                   lifestyles.
We will discuss post industrial society as it is based on services:
  Transformation of Industrial to Post Industrial Society:

      1. First Stage:
Industry develops by expansion of transportation and of public
utilities with increasing use of energy with non manufacturing blue
collar forces.
      2. Second Stage:
It involves mass consumption of goods and services with increasing
population and changing trends to whole sale and retail in term of
finance, real estate and insurance.
      3. Third Stage:

          A German Statistician Christian Engel said:
 “The proportion of money devoted to food at home begins to drop
and the marginal increments are used first for durables and then for
                     luxury and recreation.”

                Personal services begin to grow as
restaurants,hotels,autoservices,travel entertainment ,sports need for
                     technical accessories etc.

Impact of Service Economy on Marketing:
  • Marketers trend to make investments on use of services.
  • Market search requires area and economy wise marketing
  • Which economy is more rich in which services
  • To explore new services for changing patterns of economy.
  *****************************************************
C hapter 1 pg 4f

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C hapter 1 pg 4f

  • 1. 2. Growth in intermediate demand from Firms: Intermediate demand from firms means creating or filling the need of inputs provided to manufacturing and other sectors of economy. Depending on intermediate demand firms are divided into three categories: a)Specialists Firms: Set up to provide services previously carried out by existing firms. e.g: Engineering services, personnel services. b)Alternatively Specialists Firms: Set up to provide new services. e.g :data processing. c) Business Buyers: They use services like accounting,construction,banking,insurance,legal,research,adver tising,public relations,training,shipping,consultancy services. Analysis: Companies and other organizations rely on specialist services as it is the need of the day to take hold on technological and competitive pressure with lack of available resources organizations encourage to use outside services other than internally based services. 3. Growth in Final demand from Consumers: As societies get wealthier people generate final demands to ordinary and l uxorious services. According to Law of Economies: “As societies get wealthier and as the marginal utility derived from additional increments of goods decline then people turn to services expenditures.” It tells us about the relationship between income &spending patterns on goods & services.(travel,health,recreation,education,with changing lifestyles.
  • 2. We will discuss post industrial society as it is based on services: Transformation of Industrial to Post Industrial Society: 1. First Stage: Industry develops by expansion of transportation and of public utilities with increasing use of energy with non manufacturing blue collar forces. 2. Second Stage: It involves mass consumption of goods and services with increasing population and changing trends to whole sale and retail in term of finance, real estate and insurance. 3. Third Stage: A German Statistician Christian Engel said: “The proportion of money devoted to food at home begins to drop and the marginal increments are used first for durables and then for luxury and recreation.” Personal services begin to grow as restaurants,hotels,autoservices,travel entertainment ,sports need for technical accessories etc. Impact of Service Economy on Marketing: • Marketers trend to make investments on use of services. • Market search requires area and economy wise marketing • Which economy is more rich in which services • To explore new services for changing patterns of economy. *****************************************************