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Role of Services in an Economy

Role of Services in an Economy. What is a service?. An idea? A circumstance? A convenience? A physical thing?. Goods vs. Services. Good: tangible physical object; created and transfered; existence over time

raphael-delacruz
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Role of Services in an Economy

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  1. Role of Services in an Economy

  2. What is a service? • An idea? • A circumstance? • A convenience? • A physical thing?

  3. Goods vs. Services • Good: tangible physical object; created and transfered; existence over time • Service: intangible and perishable; created and used simultaneously; only the effect has an existence over time • Book, restaurant, TV

  4. Challenge to managers • Identify appropriate techniques developed in manufacturing that are applicable to service operations • Initiate the innovative use of information systems • Recognise the consumer as a productive resource

  5. Service Definition A Service is a Time-perishable, Intangible Experience Performed for a Customer Acting in the Role of a Coproducer. James Fitzsimmons

  6. 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

  7. Taxonomy of services • Domestic services • Trade and Commerce • Services that refine and extend human capacities

  8. Role of Services in an Economy FINANCIAL SERVICES · Financing · Leasing · Insurance INFRASTRUCTURE SERVICE · Communications · Transportation · Utilities · Banking PERSONAL SERVICES · Healthcare · Restaurants · Hotels MANUFACTURING Services inside company: · Finance · Accounting · Legal · R&D and design DISTRIBUTION SERVICES · Wholesaling · Retailing · Repairing CONSUMER (Self-service) BUSINESS SERVICES · Consulting · Auditing · Advertising · Waste disposal GOVERNMENT SERVICES · Military · Education · Judicial · Police and fire protection 1-8

  9. Stages of Economic Development Features 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 of health, Global education, recreation

  10. The New Experience Economy

  11. The Four Realms of an Experience

  12. Experience Design Principles • Theme the Experience (Big Chefs) • Harmonize Impressions with Positive Cues • Eliminate Negative Cues(Cinemark talking trash containers) • Mix in Memorabilia (Hard Rock T-shirts) • Engage all Five Senses (Mist in Rainforest) 1-12

  13. Source of Service Sector Growth • Information Technology (e.g. Internet) • Innovation Push theory (e.g. Post-it) Pull theory Services derived from products Exploiting information (e.g. Auto part sales) Difficulty of testing service prototypes • Changing Demographics Aging of the population Two-income familiesUrbanisation 1-13

  14. Role of the Service Manager • Entrepreneurial Innovation • Capitalizing on Social Trends • Management Challenges Economies of Scale (MRI scanner) Economies of Scope(Convenience store) Complexity (Yield Management) Boundary Crossing (Bank vs Brokerage) International Competitiveness( Cultural Diversity)

  15. Discussion Topics • Illustrate how the type of work he or she does influences a person’s lifestyle. • Is it possible for an economy to be based entirely on services? • Speculate on the effect that the Internet will have on the delivery of services. • What is the value of self-service in an economy? • Comment on the role that marketing plays in the service innovation process.

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