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1. Introduction
Over the last decades, manufacturing companies have faced complex markets characterized by intense competition, heterogeneous customers and technological change (Neu and Brown, 2005; Eloranta and Turunen, 2015). This has incentivized the development of manufacturing strategies based on differentiation and non-price-based value offerings as opposed to cost-based competition. Initially, these strategies involved mainly the offering of differentiated products. Implementing product differentiation strategies required manufacturers to focus on strategic priorities such as product customization, variety and innovation (Gerwin, 1993) and to obtain superior market performance on these dimensions (product differentiation advantage). More recently, manufacturers have also resorted to servitization by offering services that support products or their usage in a superior way (Gebauer, 2008). This approach has augmented their potential for differentiation, which can be useful especially when differentiating through products alone becomes difficult (Matthyssens and Vandenbempt, 2008; Oliva and Kallenberg, 2003). Implementing service differentiation strategies (i.e. achieving market differentiation through the offering of services) requires focusing on strategic priorities related to the provision of services, and obtaining superior market performance in service dimensions (service differentiation advantage).
Advanced Services (ADS) may have the greatest potential for market differentiation (Eggert et al., 2014; Sousa and da Silveira, 2017). ADS such as user training and consulting support customers in extracting additional value from the use of the product in their specific context (Smith et al., 2014). For example, truck manufacturer MAN offers a range of services focused on driver behavior and fuel consumption, assisting logistics firms to optimize their transport operations. Thus, ADS require intimate knowledge of customer core activities (Story et al., 2017). They often follow significant changes in a manufacturer's strategic priorities and are a major distinction between servitized and non-servitized manufacturers (Baines et al., 2020; Lütjen et al., 2017).
Although achieving market differentiation is an often-cited goal of ADS, our understanding of relationships between manufacturing strategies based on differentiation and ADS provision remains incomplete (Bustinza et al., 2015). Despite the adoption of contingency views in recent servitization studies (Benedettini et al., 2017; Bohm et al., 2017; Josephson et al., 2016; Kohtamäki and Partanen, 2016; Turunen and Finne, 2014; Valtakoski and Wittel, 2018; Visnjic et al., 2019), there is still limited understanding of how market...