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Introduction to Services
ARE SERVICES PRODUCTIVE? Productive is all labour which fixes and realises itself in a particular subject or vendible commodity...unproductive is all labour which generally perish in the very instant of their performance (Adam Smith, 1776) Services and other goods, which pass out of existence in the same instant that they come into it, are of course not part of the stock of wealth (A. Marshall, 1920)
Introduction to Services
Products delivery
Organisation
Production in company
Distribution
Consumption
Customer benefits
Service delivery
Based on: Davis, Frank W., Jr.
MIM 1 - Service Quality in the New Economy
Introduction to Services
DRIVING FORCES BEHIND THE GROWHT OF SERVICES Relaxation of Professional Association Standards Privatisation Computerisation and technological/information innovation Growth of franchising and network companies Outsourcing, leasing and rental development Manufacturers as service providers Globalisation Income changes impact on buying behaviour Sociological and demographic changes
MIM 1 - Service Quality in the New Economy
Introduction to Services
DEFINITION OF SERVICE
Combination of outcomes and experiences delivered to and received by customer. The Service Experience: direct experience and interaction with customer:
the extent of personalisation of the process the responsiveness of the service organisation the flexibility of customer-facing staff the ease of access to service personnel or information systems the extent to which the customer feels valued by organisation the courtesy and competence of customer-facing staff interactions with other customers.
(Johnston, Clark 2005)
The service outcome: The result of service delivery to customer So, services deal with processes rather than with things and are experienced rather than consumed.
MIM 1 - Service Quality in the New Economy
Introduction to Services
1999 South-Western College Publishing MIM 1 - Service Quality in the New Economy
Introduction to Services
Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
(Kotler)
A service is and activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and service employees and/or systems of the service provider, which are provided as solutions to customer problems.
(Grnroos)
All those economic activities that are intangible and imply interaction to be realised between service provider and consumer.
(Van Looy et al.)
Introduction to Services
Introduction to Services
Introduction to Services
Understands moments of truth Has well formulated service strategy (and concept) Has customer-friendly system Has customer-focused front-office staff
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Introduction to Services
TYPES OF SERVICES (1) By branch (problematic today) Degree of Customer interaction Service characteristics (voluntary and involuntary) The role of service in company
External (for what customer pays) Internal (in-house services)
Degree of customisation (standard and customised) Degree of customer contact (high and low-contact) Facilities or field-based service Core and supplementary services The subject of service: person or object (towards people or equipment Degree of demand fluctuation over time
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Introduction to Services
Subject of service
Person Object
Place of service
Facilities-based
Cash collection
Shoemaker
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Introduction to Services
Interaction/Customisation
Low SERVICE FACTORY Airlines Trucking Hotels Resorts and recreation MASS SERVICE Retailing Wholesaling Schools Retails banking High SERVICE SHOP Hospitals Auto repair Other repair services
Low
Labour intenstity
High
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Introduction to Services
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Introduction to Services
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Introduction to Services
Knowledge of service position Better formulation of strategies Better recognition of challenge for managers
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Introduction to Services
We are a concept company. Our vision is to contribute to a better everyday life for the majority of people. We do this by offering a wide range of home furnishing items of good design and function at prices so low that majority of people can afford to buy them
Ingvar Kamprad, Founder of IKEA
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Introduction to Services
More emotional than a business model Deeper tha a brand More complex than a good idea More solid than a vision Can unite employees and customers Can create competitive advantage
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Introduction to Services
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Introduction to Services
Service outcome: great day out fun time thrilling rides never a dull moment great experience with friends/family exhausting Service value: all-inclusive price car parking is extra expensive ticket but well worth it few additinal costs food reasonably priced overall excellent value for money 20
Introduction to Services
CUSTOMERS
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Introduction to Services
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Introduction to Services
Evaluate and select market segments Select service attributes Set prices Tailor location and timing of service availability Inform customers about the service and promote its use
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Introduction to Services
Create and deliver the specified service package to target customers that meets quality and productivity
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Introduction to Services
Ensure the right number and mix of people at service company Design work systems (i.e. layout, information needs, technology requirements) to create services Develop reword systems Maximase employee welfare :
Working conditions Advancements Job security, etc.
MIM 1 - Service Quality in the New Economy
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Introduction to Services
Revenue vs. Cost Orientation Different Time Horizons Perceived Fit o New Product with Existing Operations.
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Introduction to Services
Standardization
Batch processing
Seek economies of scale, consistency, efficient use of capacity by processing customers in groups Keep costs down by avoiding wasteful underutilisation of resources
Capacity management
Job description
Minimize error, waster and fraud; use technology efficiently; simplify tasks and standardise work
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Introduction to Services
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Introduction to Services
Performance Measurement
Internationalisation
Service Strategy
Customer Information Relationships & Loyalty Technology Communication Customer & Promotion Satisfaction Pricing
Collaboration
Competencies
Innovation
MIM 1 - Service Quality in the New Economy
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Introduction to Services