§ It is much more difficult to make service comparisons than product comparisons, making it harder to determine a market driven price in the first place.
§ The introduction of new products and services in service industries usually occurs far less frequently than in manufacturing environment (e.g. Sony and Toyota introduce new models on a regular basis) and, in consequence, the equivalent of manufacturing design teams are rarely found in service industries.
§ Bought in materials are usually of modest significance so there is little scope for exerting pressure on external suppliers.
§ The major cost of any new product or service is salaries and unless lower cost delivery mechanisms (e.g. the internet) or radically different ways of working can be exploited there is limited scope for substantial cost reduction.
