Transcript Role of Services in an Economy

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Welcome to
Service Management
Role of Services in an Economy
FM : Anis Gunawan,MM
[email protected]
James Fitzsimmons
Seay Professor of Business Emeritus
University of Texas at Austin
Orlando
Service Definitions
Services are deeds, processes, and performances.
Valarie Zeithaml & Mary Jo Bitner
A service is a time-perishable, intangible experience
performed for a customer acting in the role of a coproducer.
James Fitzsimmons
Definition of Service Firms
Service enterprises are organizations that
facilitate the production and distribution of
goods, support other firms in meeting their goals,
and add value to our personal lives.
James Fitzsimmons
SM
Service Can Mean all of These
1.
Service as a product
2.
Customer service
3.
4.
Services as value add
for goods
Service embedded in a
tangible product
Examples of Service Industries
1.
2.
3.
4.
5.
6.
Health Care
1.
hospital, medical practice, dentistry, eye care
Professional Services
1.
accounting, legal, architectural
Financial Services
1.
banking, investment advising, insurance
Hospitality
1.
restaurant, hotel/motel, bed & breakfast
Airline
2.
ski resort, rafting
Travel
1.
airline, travel agency, theme park
Others
1.
hair styling, pest control, plumbing, lawn maintenance,
counseling services, health club, interior design
Challenges for Services
1.
2.
3.
4.
5.
6.
7.
8.
9.
Defining and improving quality
Ensuring the delivery of consistent quality
Designing and testing new services
Communicating and maintaining a consistent image
Accommodating fluctuating demand
Motivating and sustaining employee commitment
Coordinating marketing, operations, and human resource efforts
Setting prices
Finding a balance between standardization versus
customization
SQ
Why do firms focus on Services?
1.
2.
3.
Services can provide higher profit margins and
growth potential than products
Customer satisfaction and loyalty are driven by
service excellence
Services can be used as a differentiation
strategy in competitive markets
SQ
Implications of Intangibility
1.
Services cannot be inventoried
2.
Services cannot be easily patented
3.
4.
Services cannot be readily displayed or
communicated
Pricing is difficult
Implications of Heterogeneity
1.
2.
3.
Service delivery and customer
satisfaction depend on employee and
customer actions
Service quality depends on many
uncontrollable factors
There is no sure knowledge that the
service delivered matches what was
planned and promoted
Implications of Simultaneous
Production and Consumption

Customers participate in and affect the
transaction

Customers affect each other

Employees affect the service outcome

Decentralization may be essential

Mass production is difficult
Implications of Perishability


It is difficult to synchronize supply and
demand with services
Services cannot be returned or resold
Examples of Goods Companies that
are Expanding into Services
Boeing
Kodak
Role of Services in an
Economy
NY
FINANCIALSERVICES
1.
· Financing
2.
· Leasing
3.
· Insurance
MANUFACTURING
Services inside company:
· Finance
· Accounting
· Legal
· R&D and design
1.
2.
3.
4.
BT
INFRASTRUCTURE SERVICE
· Communications
· Transportation
· Utilities
· Banking
DISTRIBUTION
SERVICES
· Wholesaling
· Retailing
· Repairing
PERSONALSERVICE
· Healthcare
· Restaurants
· Hotels
CONSUMER
(Self-service)
Cons
BUSINESS SERVICES
· Consulting
· Auditing
· Advertising
· Waste disposal
GOVERNMENT SERVICES
· Military
· Education
· Judicial
· Police and fire protection
Percent Employment in Services
Top Ten Postindustrial Nations
Country
1965
1975
1985
1995
2005
United States
59.5
66.4
70.0
74.1
78.6
United Kingdom
51.3
58.3
64.1
71.4
77.0
The Netherlands
52.5
60.9
68.3
73.4
76.5
Sweden
46.5
57.7
66.1
71.5
76.3
Canada
57.8
65.8
70.6
74.8
76.0
Australia
54.6
61.5
68.4
73.1
75.8
France
43.9
51.9
61.4
70.0
74.8
Japan
44.8
52.0
57.0
61.4
68.6
Germany
41.8
n/a
51.6
60.8
68.5
Italy
36.5
44.0
55.3
62.2
65.5
Year
2000
1990
1980
1970
1960
1950
1940
1930
1920
1910
1900
1890
1880
1870
1860
1850
Proportation of total employement
Trends in U.S. Employment by
Sector
90
80
70
60
Service
50
Manufacturing
40
Agriculture
30
20
10
0
Distribution of GDP in the US Economy
Product
Services
A
Physical
Information
B
6%
31%
37%
10%
53%
63%
C
D
16%
84%
IBM
Stages of Economic
Development
Society
Game
Predominant
Activity
PreIndustrial
Against
Nature
Agriculture
Mining
Industrial
Against
Goods
Machine Individual
fabricated production
tending
nature
Postindustrial
Among
Services
Persons
Use of
Human
Labor
Standard
Unit of
of Living
Social Life Measure Structure
Raw
muscle
power
Extended
household
Subsistence
Quantity
of goods
Technology
Routine
Simple hand
Traditional
tools
Authoritative
Bureaucratic Machines
Hierarchical
Artistic
Community Quality of
InterCreative
life in terms dependent
Intellectual
health,
education,
recreation
Information
Bethel
Economic Evolution
Economy
Agrarian
Industrial
Service
Experience
Economic
Offering
Food
Packaged
goods
Commodity
service
Consumer
services
Business
services
Function
Extract
Make
Deliver
Stage
Co-create
Nature
Fungible
Tangible
Intangible
Memorable
Effectual
Attribute
Natural
Standardized
Customized
Personal
Growth
Method of
Supply
Stored in
bulk
Inventoried
Delivered on
demand
Revealed
over time
Sustained
over time
Seller
Trader
Producer
Provider
Stager
Collaborator
Buyer
Market
Customer
Client
Guest
Collaborator
Expectation
Quantity
Features
Benefits
Sensations
Capability
The Four Realms of an Experience
Customer Participation
Passive
Active
Absorption Entertainment Education
(Movie)
(Language)
Environmental
Relationship
Immersion Esthetic
(Tourist)
Escapist
(ScubaDiving)
Experience Design Principles





Theme the Experience (Forum shops)
Harmonize Impressions with Positive Cues
(O’Hare airport parking garage)
Eliminate Negative Cues
(Cinemark talking trash containers)
Mix in Memorabilia (Hard Rock T-shirts)
Engage all Five Senses (Mist in Rainforest)
Typology of Services in the 21st Century
Core Experience
Essential Feature
Examples
Creative
Present ideas
Advertising, theater
Enabling
Act as intermediary
Transportation, communications
Experiential
Presence of customer
Massage, theme park
Extending
Extend and maintain
Warranty, health check
Entrusted
Contractual agreement
Service/repair, portfolio mgt.
Information
Access to information
Internet search engine
Innovation
Facilitate new concepts
R&D services, product testing
Problem solving
Access to specialists
Consultants, counseling
Quality of life
Improve well-being
Healthcare, recreation, tourism
Regulation
Establish rules and regulations
Environment, legal, patents
ORlando
Case study
in Services Management
Case : Marriot Hilton.
When Tom and Ruth checked out of the Marriott Hilton Head Resort,
they were each given a brief postage paid survey to complete and
return through the mail. The survey asked 15 questions about their
stay at the Marriott Resort. It covered such attributes as overall satisfaction,
check-in speed/efficiency, cleanliness, decor and comfort of their room,
friendliness and efficiency of the staff, quality of dining experience, quality
of merchandise/gift shop, intention to return, and willingness to recommend
to friends.
Question :
1. What is the decision facing Marriot Hilton?
2. What factors are important in understanding this decision situation?
3. What are the alternatives?
4. What decision(s) do you recommend?
Question no 1 :
What is the decision facing Marriot Hilton?
What types of research have to Marriott conduct ?
Question no 2 :
What factors are important in understanding this decision situation?
Consumer behavior that covered such attributes as overall satisfaction, check-in
speed/efficiency, cleanliness, decor and comfort of their room, friendliness and efficiency of
the staff, quality of dining experience, quality of merchandise/gift shop, intention to return, and
willingness to recommend
Question no 3 : What are the alternatives?
A) Complaint solicitation
B) Critical incidents studies
C) Relationship surveys
D) Trailer calls
E) Lost customer research
Question no 4. What decision(s) do you recommend?
D) Trailer calls