Service: The New FrontierLearning ObjectivesInteractive Role of ServicesService DefinitionsDefinition of Service FirmsStages of Economic DevelopmentPowerPoint PresentationSlide 8Slide 9Slide 10Slide 11Services DefinedSlide 13Slide 14Slide 15Parallel Product/Service DesignSlide 17Slide 18Service and ProfitabilitySlide 20Slide 21The New Experience EconomyThe Four Realms of an ExperienceExperience Design PrinciplesRole of the Service ManagerSlide 26Discussion TopicsService: The New FrontierService: The New FrontierWelcome toWelcome to Service ManagementService ManagementProfessor Drew RosenProfessor Drew RosenLearning ObjectivesLearning ObjectivesDescribe the central role of services in an economy.Describe the central role of services in an economy.To explore the differences between manufacturing and To explore the differences between manufacturing and services.services.Explore the role of services within manufacturing and Explore the role of services within manufacturing and manufacturing’s reliance on services.manufacturing’s reliance on services.Understanding service management/service operationsUnderstanding service management/service operationsDescribe and contrast the features of the new experience Describe and contrast the features of the new experience economy with that of previous economies.economy with that of previous economies.Interactive Role of ServicesInteractive Role of ServicesService DefinitionsService Definitions A Service is a Time-perishable, Intangible A Service is a Time-perishable, Intangible Experience Performed for a Customer Experience Performed for a Customer Acting in the Role of a Coproducer.Acting in the Role of a Coproducer. James FitzsimmonsJames Fitzsimmons Services are deeds, processes, and Services are deeds, processes, and performances.performances.Valarie Zeithaml & Mary Jo BitnerValarie Zeithaml & Mary Jo BitnerDefinition of Service FirmsDefinition of Service Firms Service Enterprises are Organizations that Service Enterprises are Organizations that Facilitate the Production and Distribution of Facilitate the Production and Distribution of Goods, Support Other Firms in Meeting Goods, Support Other Firms in Meeting Their Goals, and Their Goals, and Add ValueAdd Value to Our Personal to Our Personal Lives.Lives. James FitzsimmonsJames FitzsimmonsStages of Economic Stages of Economic DevelopmentDevelopment FeaturesFeatures Pre- Use of StandardPre- Use of Standard dominant human Unit of of living dominant human Unit of of living Society Game activity labor social life measure Structure TechnologySociety Game activity labor social life measure Structure Technology Pre- Against Agriculture Raw Extended Sub- Routine Simple handPre- Against Agriculture Raw Extended Sub- Routine Simple hand Industrial Nature Mining muscle household sistence Traditional toolsIndustrial Nature Mining muscle household sistence Traditional tools power Authoritative power Authoritative Industrial Against Goods Machine Individual Quantity Bureaucratic Machines Industrial Against Goods Machine Individual Quantity Bureaucratic Machines fabricated production tending of goods Hierarchical fabricated production tending of goods Hierarchical naturenature Post- Among Services Artistic Community Quality of Inter- InformationPost- Among Services Artistic Community Quality of Inter- Information industrial Persons Creative life in terms dependentindustrial Persons Creative life in terms dependent Intellectual of health, GlobalIntellectual of health, Global education,education, recreation recreationThe Service Revolution“There are no such things as serviceindustries. There are only industries whose service components are greater or less then those of other industries. Everybody is in service”!Theodore LevittGlobal Employment, % SharePercent Employment in ServiceJobs, by Nation, 1983-1997Growth In EmploymentGlobal Private Sector Services, 1980-1997, %Services as % of GDPServices DefinedServices DefinedService IndustryService IndustryCustomer ServiceCustomer ServiceField ServiceField ServiceWhy Services Are ImportantIncreased CompetitionManufacturing SupportMakes Economic Sense“When the quality and price of competingproducts are similar or nearly identical,service activities can ‘differentiate’undifferentiated products in the mind ofthe customer”Glaskowsky et al.Relative Importance of Service ActivitiesRelative Importance of Marketing VariablesProductPriceServiceSales EffortTOTALAll IndustriesAll ManufacturingChemicals &Plastics Mfg.Food Mfg.36232318100382420181003826181810036271522100Electronics Mfg.Paper Mfg.All OtherManufacturing481422161002926242110038252215100All MerchandisingConsumer GoodsMerchandisingIndustrial GoodsMerchandising302227211003123232310028173916100National Council of Physical Distribution ManagementParallel Product/Service DesignParallel Product/Service DesignProductConceptProduct DesignProductDeliveryServiceConceptServiceDesignServiceDeliverySuppliersTier 2SuppliersTier 1ManufacturingInbound LogisticsOperationsOutbound LogisticsCUSTOMERSDistributorsRetailersThe Supply ChainInformationManufacturingServiceIntermediaryCommercialServices User(Self-Service)Consumer(Self-Service)R & DProductDesignDistributionServicesWholesalingRetailingRepairingService IndustriesCommunications, Transportation,Utilities, Health Care, Banking, etc.Private Business ServicesSupporting Manufacturing, Accounting, Legal, Consulting, Software, MaintenanceGovernment Support ServicesWaste Disposal Services, Road Maintenance,Education, Health Support, Standards,Police and Fire Protection, etc.Services Inside theCompany--Design, Legal, AccountingAdvertising, etc.Service and ProfitabilityService and ProfitabilityReduced operating