Professional Documents
Culture Documents
SERVICE SECTOR
MANAGEMENT
PART 1:
SSM THEOREY AND
CONCEPT BUILDING
CHAPTER 1:
INTRODUCTION TO
SERVICE SECTOR
MANAGEMENT
SERVICES- DEFINED
An act or a performance
Intangible
Eg: Teaching
F. Based on ownership:
- Public
- Private
- Voluntary
MARKETING SERVICES VERSUS
PHYSICAL GOODS
1. No Customer ownership of services
2. Service products as intangible performances
3. Customer involvement in the production process
4. People as part of the product
5. Greater variability in operational inputs and outputs
6. Difficulty of customer evaluation
7. No inventories for Services after production
8. Importance of the Time factor
9. Different Distribution Channels
GOODS VS. SERVICES
CHARACTERISTICS GOODS SERVICES
Product Tangible Intangible
Ability to measure Objective Subjective
Customer perception Standardized Must be consumed to
evaluate
Form Manufactured Created
Time interval Before and after Almost instantaneous
Shelf life Days to years Zero (perishable)
Procession Utilitarian/ finite Memories/ forever
Place Product to consumer Consumer to product
Delivery Consistent Heterogeneity/variable
Unit definition Precise General
Product flexibility Limited Broad
Pricing Cost basis Limited cost basis
Marketing Traditional / external Non traditional /
largely internal
RELATION BETWEEN PRODUCTS AND
SERVICES/ CATEGORIZATION OF SERVICES
T Product
A Major
N
Product
G
I
B Hybrid
I
L Major
I Service
T
Y Service
INTANGIBILITY
RELATION BETWEEN PRODUCTS AND
SERVICES/ CATEGORIZATION OF SERVICES
Hi
Salt
Soft drinks
CD Player
Golf clubs
New car
Tangible Elements
Tailored clothing
Furniture rental
Fast food restaurant
Plumbing repair
Office cleaning
Health club
Airline flight
Retail banking
Insurance
Weather forecast
Lo Intangible Elements Hi
RELATION /CATEGORIZATION WITH EXAMPLES
Invest Cons
Fast Ad
Soft Deterg Autom Cosm Airline ment Teachi
Salt
drinks ents obile etics
food agenc
s Manag
ultan ng
outlet y
ement cy
Restaurant
Tangible dominant
Intangible Dominant
Hospital Teaching
FEATURES OF SERVICE SECTOR
Highly employee oriented and highly overstaffed
Utilization of resources
Standard of living
Performance
Measurement
EXAMPLES
SOCIO-CULTURAL
FORCES
POLITICAL- LEGAL ENVIRONMENT
• Changing lifestyles
• Changing economies
• Changing technological advances
• Changing commercial needs
• Globalization
• Specialization
SOCIO- CULTURAL ENVIRONMENT
• Lifestyle
• Social values
• Beliefs
• Culture affects services globally more than
goods
• “Adaptability of services”
TECHNOLOGICAL ENVIRONMENT
• Computers
• Telecommunications
• E-commerce
• Innovations
• SST`s
SST`S: SELF SERVICE TECHNOLOGIES
“Services produced entirely by the customer
without any interaction with the firms
employees.”
• ATM
• Automated airline check-in
• Automated hotel check-in & check-out
• Electronic blood pressure machine
• Tax preparation software
• Internet banking
• Buying online
• Automated investment transactions
• Insurance online
• Internet shopping
• Phone banking
CHAPTER 3:
GROWTH OF
SERVICE SECTOR
STATISTICS
Service Sector Contribution to GDP
• ECONOMIC FACTORS
Globalization
Specialization
• POLITICAL FACTORS
Huge infrastructure of government department
Internalization
Privatization/ deregulation
• SOCIAL FACTORS
Increase in number of working people
High quality of life
Two income households
More international travel and mobility
Greater complexity of life
Higher aspiration levels
• TECHNOLOGICAL FACTORS
Innovations in various fields
Range of new products
Computer explosion
• OTHERS
Manufacturing became expensive
Increase in competition
Availability of trained manpower
Outsourcing of functions
New inventions
SCOPE OF SERVICE SECTOR:
Profit seeking organizations
Industry classification Examples
Housing Rentals, real-estate agents
Household Repair and maintenance, electricity,
plumbing, domestic help
Personal care Beauty care, hair dressing, image
services
Recreation and entertainment Parks, discos, D J services
Medical and healthcare Diagnostic, dental, nursing,
hospitalization
Business and professional Detective, legal, accounting,
management consultancy
Private education Schools , colleges
Financial Insurance, banking, stock brokers
Communication Telephone, telex, fax, e-mail, internet,
website, PR agencies, ad agencies
Transportation BEST, rail , airways, parcel delivery
services
Non- Profit seeking organizations
Service sector Examples
Education Universities, schools
Religious Temples, gurudwaras, churches,
mosques
Cultural Cultural events, theatres, zoos,
museums
Charitable Welfare groups and research
foundations (red cross)
Social cause Family planning, cancer
eradication, environmental
concerns
Social Clubs
Healthcare Hospitals, health research
institutes( Indian cancer society)
Political Individual politicians, parties
CHAPTER 4:
CHARACTERISTICS
OF SERVICES / 4 I`S
OF SERVICES
INTANGIBILITY
1. Visualization
2. Association
3. Physical representation
(Equipment, Uniforms, Colors, Logos and
Mascots, Buildings, Communication Material,
Business Cards)
5. Documentation
6. Facts and figures
7. People
8. Place
STRATEGIES FOR INCONSISTENCY
1. Industrialize Services
7. Automation
3. Video conferencing
STRATEGIES FOR INVENTORY
• Over marketing
• Managing Demand
• Differential pricing
• Cultivating non-peak demand
• Complementary services
• Reservation systems
• Managing Supply
• Part Time employees
• Peak time efficiency routines
• Increased consumer participation
• Shared services
• Facilities for future expansion
CHAPTER 5:
CLASSIFICATION OF
SERVICES
I. ACCORDING TO LOVELOCK
Esteem Needs
Social Affiliation
Situational Factors
HOW CUSTOMERS EVALUATE SERVICE
PERFORMANCE
Most Goods Most Services
Easy Difficult
to evaluate to evaluate
Restaurant meals
Computer repair
Clothing
Complex surgery
Legal services
Motor vehicle
Haircut
Lawn fertilizer
Entertainment
Foods
Chair
Education
High in search High in experience High in credence
attributes attributes attributes
CONSUMER AS
DECISION MAKER
Age & family life cycle
Beliefs and attitudes
Economic circumstances
Learning
Occupation
Personality & self concept
Psychographics
PSYCHOLOGICAL FACTORS PERSONAL FACTORS
COSUMER PURCHASE PROCESS