A market coverage model for producer services

ABSTRACT We present a model of the optimum market size of a producer service firm that is based on that contact requirements of its service as well as the firm's distance to its prospective clients. The effects on market size of differing contact requirements are discussed from a comparative statics perspective. Optimum market sizes are shown to vary with different values of service duration and demand frequency. These differences may exist between producer service industries, and they may also arise from changes over time in the market requirements of a particular industry. The paper concludes with suggestions for improving the muscle. An impartial agenda for advancing the modeling interests of service‐sector researchers also presented.