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Chapter 1 An Introduction to Services. Chapter Objectives Introduces the basic differences between goods and services. Highlights the importance of managing.

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Presentation on theme: "Chapter 1 An Introduction to Services. Chapter Objectives Introduces the basic differences between goods and services. Highlights the importance of managing."— Presentation transcript:

1 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. 2

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. 3

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. 4

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

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 consumers 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. 6

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

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

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

10 Figure 1.3: Servuction Model Customer Other Customer Invisible Organizations and Systems Servicescape 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. 10

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. 11

12 (2) Contact Personnel / Service Producers Contact Personnel 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. 12

13 (3) Other Customers Customers that share the primary customers service experience. The presence of other customers can enhance or detract from an individuals 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. 13

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. 14

15 Why Study Services? 1.The growth of the global service economy in terms of contributions to Gross Domestic Products (GDP) 2.The growth of the global service workforce 3.The emergence of technologically based e- services that have transformed many service industries 4.The importance of developing sustainable service marketing business practices ©2011 Cengage Learning. All rights reserved. 15

16 COUNTRY% % 1.Hong Kong 2.Bahamas 3.West Bank 4.France 5.United States 6.Lebanon 7.Japan 8.Taiwan 9.United Kingdom 10.Cuba Belgium 12. Singapore 13. Denmark 14. Italy 15. Portugal 16. Germany 17. Australia 18. New Zealand 19. Canada 20. Poland Figure 1.4: Worldwide GDP by Service Sector Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bf.html ©2011 Cengage Learning. All rights reserved. 16

17 Figure 1.5: Worldwide GDP by Service Labor Force COUNTRY% % 1.Hong Kong 2.Bahamas 3.Israel 4.United Kingdom 5.Canada 6.Singapore 7.United States 8.Argentina 9.Norway 10.Australia New Zealand 12. Switzerland 13. Belgium 14. Denmark 15. France 16. Ecuador 17. Finland 18. Germany 19. South Korea 20. Austria Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bf.html ©2011 Cengage Learning. All rights reserved. 17

18 Figure 1.6: Worldwide GDP by Industry Sector Source: https://www.bea.gov/industry ©2011 Cengage Learning. All rights reserved. 18

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. 19

20 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. Copyright © 2011 Cengage Learning. ©2011 Cengage Learning. All rights reserved. 20


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