Maintenance of machinery: Negotiating service contracts in business‐to‐business marketing

As industrial products are becoming more advanced and complex, the role of supporting services needed to exploit a product's function to an agreeable performance is becoming increasingly important. To achieve the best performance, industrial customers are entering into service contracts with the original equipment manufacturers (OEM) or independent service providers. This, in turn essentially involves service contract negotiation between OEM/service provider and the client. If such contracts are not negotiated carefully, it may lead to conflict and poor system performance. To achieve a win‐win situation for both parties, aspects such as what services to deliver, who is to deliver them, how they are to be delivered and received, and at which performance level, need to be considered in the negotiation process and agreed upon by both the provider and the client. A conceptual framework has been developed for service delivery negotiation process based on review of literature and analysis of results from a survey conducted to study the existing approaches being practiced by the industrial organizations to negotiate a service contract.