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Service Management (5e)

Operations, Strategy, Information Technology
By
Fitzsimmons and Fitzsimmons

Chapter – 1
Role of Service in an Economy
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Learning Objectives
Describe the central role of services in an economy.
Discuss the evolution of an economy from an agrarian
society to a service society.
Describe the features of preindustrial, industrial, and
postindustrial societies.
Describe the features of the new service economy
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Service Definitions
Services are deeds, processes, and performances.
Valarie Zeithaml & Mary Jo Bitner

A service is a time-perishable, intangible experience

performed for a customer acting in the role of a co-producer.
James Fitzsimmons
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Definition of Service Firms

Service enterprises are organizations that facilitate the
production and distribution of goods, support other firms in
meeting their goals, and add value to our personal lives.
James Fitzsimmons
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Role of Services in an Economy

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Percent Service Employment for Selected Nations

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Trends in U.S. Employment by Sector

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Stages of Economic Development

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The New Experience Economy

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The Four Realms of an Experience

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Experience Design Principles

Theme the Experience (Forum shops)
Harmonize Impressions with Positive Cues
(O’Hare airport parking garage)
Eliminate Negative Cues
(Cinemark talking trash containers)
Mix in Memorabilia (Hard Rock T-shirts)
Engage all Five Senses (Mist in Rainforest)
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Source of Service Sector Growth

◻ Innovation
Push theory (e.g. Post-it)
Pull theory (e.g. Cash Management)
Services derived from products (Video Rental)
Information driven services
Difficulty of testing service prototypes
◻ Social Trends
Aging of the population
Two-income families
Growth in number of single people
Home as sanctuary