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FM : Anis Gunawan,[email protected]
Welcome to Service Management
Role of Services in an Economy
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 co-producer.
James Fitzsimmons
Orlando
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. Services as value add for goods
4. Service embedded in a tangible product
Examples of Service Industries1. Health Care
1. hospital, medical practice, dentistry, eye care2. Professional Services
1. accounting, legal, architectural3. Financial Services
1. banking, investment advising, insurance4. Hospitality
1. restaurant, hotel/motel, bed & breakfast 2. ski resort, rafting
5. Travel1. airline, travel agency, theme park
6. Others1. hair styling, pest control, plumbing, lawn maintenance, counseling
services, health club, interior design
Airline
Challenges for Services1. Defining and improving quality2. Ensuring the delivery of consistent quality3. Designing and testing new services4. Communicating and maintaining a consistent image5. Accommodating fluctuating demand6. Motivating and sustaining employee commitment7. Coordinating marketing, operations, and human resource efforts8. Setting prices9. Finding a balance between standardization versus
customization
SQ
Why do firms focus on Services?
1. Services can provide higher profit margins and growth potential than products
2. Customer satisfaction and loyalty are driven by service excellence
3. 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. Services cannot be readily displayed or communicated
4. Pricing is difficult
Implications of Heterogeneity
1. Service delivery and customer satisfaction depend on employee and customer actions
2. Service quality depends on many uncontrollable factors
3. 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
Role of Services in an Economy
INFRASTRUCTURE SERVICE1.· Communications2.· Transportation3.· Utilities4.· Banking
PERSONALSERVICE· Healthcare· Restaurants· Hotels
CONSUMER(Self-service)
GOVERNMENT SERVICES· Military· Education· Judicial· Police and fire protection
DISTRIBUTION SERVICES
· Wholesaling · Retailing · Repairing
FINANCIALSERVICES1. · Financing2. · Leasing3. · Insurance
MANUFACTURINGServices inside company:
· Finance· Accounting· Legal· R&D and design
BUSINESS SERVICES· Consulting· Auditing· Advertising· Waste disposal
BT
NY
Cons
Percent Employment in ServicesTop 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
Trends in U.S. Employment by Sector
0
10
20
30
40
50
60
70
80
9018
50
1860
1870
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
Year
Pro
po
rtat
ion
of
tota
l em
plo
yem
ent
Service
Manufacturing
Agriculture
Distribution of GDP in the US Economy
Product Services
Physical
Information
6%
10%
31%
53%
37%
63%
84%16%
D
BA
C
IBM
Stages of Economic Development
Pre- Use of Standard dominant Human Unit of of Living Society Game Activity Labor Social Life Measure Structure
Technology
Pre- Against Agriculture Raw Extended Sub- Routine Simple hand Industrial Nature Mining muscle household sistence Traditional tools
power Authoritative
Industrial Against Goods Machine Individual Quantity Bureaucratic Machines fabricated production tending of goods Hierarchical nature Post- Among Services Artistic Community Quality of Inter- Information industrial Persons Creative life in terms dependent Intellectual health, education, recreation
Bethel
Economic EvolutionEconomy Agrarian Industrial Service Experience
EconomicOffering
Food Packagedgoods
Commodityservice
Consumer services
Businessservices
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
Environmental
Absorption Entertainment (Movie)
Education (Language)
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 CenturyCore 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 : 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