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An Introduction to Services

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1 An Introduction to Services
Chapter 1 An Introduction to Services

2 Chapter Objectives Introduces the basic differences between goods and services. Highlights the importance of managing the customer's overall service experience. Establishes the importance of the service sector in the global economy. Introduces the concept of technologically-based e-services Discusses the need to develop sustainable service business practices. ©2011 Cengage Learning. All rights reserved.

3 Opening Vignette: Seth Godin
The Purple Cow was inspired by a drive through the French countryside. There are a lot of great companies out there, but they have become boring. ©2011 Cengage Learning. All rights reserved.

4 What is a Service? Services: deeds, efforts, or performances
Goods: objects, devices, or things The distinction between goods and services is not perfectly clear. ©2011 Cengage Learning. All rights reserved.

5 Figure 1.1: Scale of Market Entities
©2011 Cengage Learning. All rights reserved.

6 Scale of Market Entities
The scale that displays a range of products along a continuum based on their tangibility ranging from Tangible dominant Goods that possess physical properties that can be felt, tasted, and seen prior to the consumer’s purchase decision. Intangible dominant Services that lack the physical properties that can be sensed by consumers prior to the purchase decision ©2011 Cengage Learning. All rights reserved.

7 Figure 1.2: Molecular Model
©2011 Cengage Learning. All rights reserved.

8 What is benefit concept?
Benefit concept: Encapsulation of benefits of a product in the consumer’s mind Tide’s core benefit concept Might simply be Cleaning or Cleanliness Whiteness Motherhood ©2011 Cengage Learning. All rights reserved.

9 What is the Servuction model?
A framework for understanding the consumer’s experience ©2011 Cengage Learning. All rights reserved.

10 Figure 1.3: Servuction Model
Other Customer Servicescape Customer Invisible Organizations and Systems Contact Personnel/ Service Providers Source: Adapted from E. Langeard, J. Bateson, C. Lovelock, and P. Eiglier, Marketing of Services: New Insights from Consumers and Managers, Report No , (Cambridge, MA: Marketing Sciences Institute, 1981). ©2011 Cengage Learning. All rights reserved.

11 (1) The Servicescape The use of physical evidence to design service environments Ambient conditions: room temperature and music Inanimate objects: furnishings Other physical evidence: signs, symbols ©2011 Cengage Learning. All rights reserved.

12 (2) Contact Personnel / Service Producers
Employees other than the primary service provider who briefly interact with the customer Service Providers The primary providers of a core service Waiter or waitress Dentist Physician College instructor ©2011 Cengage Learning. All rights reserved.

13 (3) Other Customers Customers that share the primary customer’s service experience. The presence of other customers can enhance or detract from an individual’s service experience. For example unruly customers in a restaurant or a night club, children crying during a church service, or theatergoers carrying on a conversation during a play ©2011 Cengage Learning. All rights reserved.

14 (4) Organizations and Systems
Invisible organization and systems That part of a firm that reflects the rules, regulations, and processes upon which the organization is based ©2011 Cengage Learning. All rights reserved.

15 Why Study Services? The growth of the global service economy in terms of contributions to Gross Domestic Products (GDP) The growth of the global service workforce The emergence of technologically based e-services that have transformed many service industries The importance of developing sustainable service marketing business practices ©2011 Cengage Learning. All rights reserved.

16 Figure 1.4: Worldwide GDP by Service Sector
COUNTRY % Hong Kong Bahamas West Bank France United States Lebanon Japan Taiwan United Kingdom Cuba 92.3 90.0 81.0 78.9 76.9 76.2 75.4 75.2 75.0 74.8 Belgium Singapore Denmark Italy Portugal Germany Australia New Zealand Canada Poland 74.7 73.2 73.1 72.9 72.8 72.0 71.3 69.7 69.6 67.3 Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bf.html ©2011 Cengage Learning. All rights reserved.

17 Figure 1.5: Worldwide GDP by Service Labor Force
COUNTRY % Hong Kong Bahamas Israel United Kingdom Canada Singapore United States Argentina Norway Australia 91.6 90.0 82.0 80.4 79.0 77.4 76.6 76.0 75.0 New Zealand Switzerland Belgium Denmark France Ecuador Finland Germany South Korea Austria 74.0 73.2 73.0 72.7 71.8 70.4 69.9 67.8 67.7 67.0 Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bf.html ©2011 Cengage Learning. All rights reserved.

18 Figure 1.6: Worldwide GDP by Industry Sector
% Agriculture, forestry, fishing, and hunting 1.0 Information 4.4 Mining 2.3 Finance, insurance, real estate, rental, and leasing 20.0 Utilities 2.1 Professional and business services 12.7 Construction 4.1 Educational services, health care, and social assistance 8.1 Manufacturing 11.5 Arts, entertainment, recreation, accommodation, & food service 3.8 Wholesale Trade 5.7 Other services Retail Trade 6.2 Government 12.9 Transportation, &Warehousing 2.9 Source: https://www.bea.gov/industry ©2011 Cengage Learning. All rights reserved.

19 What are E-Services? E-services: an electronic service available via the net that completes tasks, solve problems, or conducts transactions. E-services have become more commonly known as self-service technologies. Auto rental chains, banks, insurance companies, hotels, movie rental chains and theaters, and a variety of other retail operations ©2011 Cengage Learning. All rights reserved.

20 Copyright © 2011 Cengage Learning.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Cengage Learning.   ©2011 Cengage Learning. All rights reserved.


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