By Mohamed Ismail bin KP Hj Pakir Mohamed

1.Understanding
Services
What happen if the no service infrastructure?
• Business cannot proceed • What is the daily service that you been
• Operation become miserable enjoying?
• Life will be miserable • OFD, FD
TNB generate electicity- Distribute, internet • Internet, wifi,comm
• Tourism-accomodation, booking,
transportaion
• Learning
• Eletricity, bank svc, water, sewage,
garbage collector
• Postal svc, courier svc, drainage
• Petrol station- in remote felda platation
(public svc)
INTRO
• No economy can function without the infrastructure that services provide
in the form of transportation and communications and without
government services such as education and health care. As an economy
develops, however, services become even more important, and soon the
vast majority of the population is employed in service activities.
• Petronas- A Job in Africa. Hararre,Zimbabwe-4 days visit 3 times a week. 2
days- 2 days free. Go enjoy yr self.
• Safari package- one day trip to Victoria falls, Zimbaze river cruise lunch,
safari tour. USD 100 svc. Pick up hotel-to airport- fly to safari-pick up – sent
bk to airport –fly back- back to the hotel
• One portx -more port shih can unload and load cargo
• Senai airport fly to asian country. Penang airport asean , europe
COVID 19
• TOURISM INDUSTRY- SIMILIAR PACAKAGE
• SENAI- Bus svc? No KLIA yes BP-Muar- KLIA not convinient
• Provide such svc- provided thare is a demand
• Imagine you have bus svc from Senai airport to Desaru or to Lego
Land –explore
• Propose a service package
How do you define service?
• Some that people need ,
customer need, demand
• Providing something that
intangiable
• To provide help
DEFINITION OF SERVICES
• Services are deeds, processes, and performances. (Valarie A. Zeithaml and Mary
Jo Bitner, Services Marketing, New York: McGraw-Hill, 1996, p. 5.)
• A service is an activity or series of activities of more or less intangible nature that
normally, but not necessarily, take place in interactions between customer and
service employees and/or physical resources or goods and/or systems of the
service provider, which are provided as solutions to customer problems.
(Christian Gronroos, Service Management, and Marketing, Lexington, Mass:
Lexington Books, 1990, p. 27.)
• Most authorities consider the services sector to include all economic activities
whose output is not a physical product or construction, is generally consumed at
the time it is produced, and provides added value in forms (such as convenience,
amusement, timeliness, comfort, or health) that are essentially intangible
concerns of its first purchaser. (James Brian Quinn, Jordan J. Baruch, and Penny
Cushman Paquette, Scientific American, vol. 257, no. 2, December 1987, p. 50.)
DEFINITION OF SERVICES (continue)
• Services are economic activities offered by one party to another, most commonly
employing time-based performances to bring about desired results in recipients
themselves or in objects or other assets for which purchasers have responsibility. In
exchange for their money, time, and effort, service customers expect to obtain value
from access to goods, labor, professional skills, facilities, networks, and systems, but they
do not normally take ownership of any of the physical elements involved. (Christopher
Lovelock and Lauren Wright, Services Marketing: People, Technology, Strategy, 6th ed.,
Upper Saddle River, NJ: Prentice-Hall, 2007, p. 6.)
• A service system is a value-co-production configuration of people, technology, other
internal and external service systems, and shared information (such as language,
processes, metrics, prices, policies, and laws). (Jim Spohrer, Paul Maglio, John Bailey, and
Daniel Gruhl, Computer, January 2007, p. 72.)
• A service is a time-perishable, intangible experience performed for a customer acting in
the role of co-producer. (James Fitzsimmons)
• Svc is an act to provide convinient that is intangiable based on consumer/people needs
or wants (Ismail 2021)
Name services in economy
• Financial services • Infrastructure
• Loans, investment, savings, cash • Transporataion, LRT, taxi. Grab.
transfer Bas Mini- 50 sen ride a small pink
bus the whole route
• Manufacturing services
• Maintenance, • Distribution
• RnD • Logsitcis , e-comm
• OEM • Personal
• Product with yr own brand, • Help line
• R N Design,
• Customize product, • Consumer
• Legal approval-halal GMP
• Goverment
THE ROLE OF SERVICE IN ECONOMY
THE ROLE OF SERVICE IN ECONOMY
(continue)
• Infrastructure services, such as transportation and communications,
are the essential links among all sectors of the economy, including the
final consumer. In a complex economy, both infrastructure and
distribution services function as intermediaries and as the channel of
distribution to the final consumer.
• Infrastructure services are a prerequisite for an economy to become
industrialized; therefore, no advanced society can be without these
services.
• In an industrialized economy, specialized firms can supply business
services to manufacturing firms more cheaply and efficiently than
manufacturing firms can supply these services for themselves.
THE ROLE OF SERVICE IN ECONOMY
(continue)
Service activities are necessary for the economy to function and to enhance
the quality of life.
• Consider, for example, the importance of the banking industry to transfer
funds and the transportation industry to move food products to areas that
cannot produce them.
• Moreover, a wide variety of personal services, such as restaurants, lodging,
cleaning, and child care, have been created to move former household
functions into the economy.
Government services play a critical role in providing a stable environment for
investment and economic growth.
• Services such as public education, health care, well-maintained roads, safe
drinking water, clean air, and public safety are necessary for any nation's
economy to survive and people to prosper.
THE ROLE OF SERVICE IN ECONOMY
(continue)
• Increasingly, the profitability of manufacturers depends on exploiting
value-added services. For example
• Automobile manufacturers have discovered that financing and/or leasing
automobiles can achieve significant profits.
• S-pay later money lender-
• Otis Elevator long ago found that revenues from after-sales maintenance
contracts far exceed the profits from elevator equipment sales.
• Warranty will valid. Svc out side no more valid, but cheap
• As personal computers become a commodity product with very low margins,
firms turn to network and communication services to improve profits.
THE ROLE OF SERVICE IN ECONOMY
(continue)
• Thus, it is imperative to recognize that services are not peripheral
activities but rather integral parts of society. They are central to a
functioning and healthy economy and lie at the heart of that
economy. Finally, the service sector not only facilitates but also makes
possible the goods-producing activities of the manufacturing sectors.
Services are the crucial force for today's change toward a global
economy.
• What happen to the world supply chain when covid outbreak
happened in wuhan? Shut down
• Computer Chips, Malaysia and Taiwan typhoon water issues
THE NATURE OF SERVICE
Boba
• Boba- taiwan- long time ago –now a trend.
• Unhealty drink- sweet- sugar, starch(tapioca),
How you want to make it healty option
• Add fruit, no sugar sweeten by fruit, use stevia, honey
• Bubble Bee, honey , pearl is honey based, yougurt instead of milk
• Still high calories drink butter better than the Origanal taiwan drink
THE NATURE OF SERVICE
SHARE OF ECONOMIC SECTORS IN THE GDP IN MALAYSIA 2020
by Aaron O'Neill Jul 22, 2021
• This statistic shows the share of economic sectors in the gross
domestic product (GDP) in Malaysia from 2010 to 2020. In 2020, the
share of agriculture in Malaysia's gross domestic product was around
8.21 percent, industry contributed approximately 35.91 percent and
the services sector contributed about 54.78 percent.
(Source:https://www.statista.com/statistics/318732/share-of-
economic-sectors-in-the-gdp-in-malaysia/)
THE NATURE OF SERVICE
THE NATURE OF SERVICE
• Malaysia Employment Statistics First Quarter 2021
https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=439&bul_id=d0dU
Q3c3NDBYbkl0WE9oY0srNXRaUT09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09
• Labour Demand by Economic Activity
• In terms of economic activity, Services sector recorded 51.8 per cent of jobs (4,375
thousand) and 52.6 per cent of filled jobs (4,348 thousand). Meanwhile, Manufacturing
sector posted 26.8 per cent of jobs (2,260 thousand) and 26.1 per cent of filled jobs
(2,160 thousand).
• The highest vacancies at 56.7 per cent (101 thousand) were in Manufacturing sector,
followed by Agriculture (16.0%; 28 thousand). Meanwhile, Services sector encompassing
15.1 per cent (27 thousand) followed by Construction (12.0%; 21 thousand) and Mining
& Quarrying (0.2%; 413).
• During this quarter, jobs created were mainly contributed by Manufacturing sector with
42.4 per cent (7 thousand) followed by Services sector (36.6%; 6 thousand).
THE NATURE OF SERVICE
Thus, service jobs in maintenance and repair are created. The 21st Century Career As shown in Figure 1.5,
health care and social assistance and professional and business services have the largest projected change in
employment in the coming decade. These high-skill careers will exhibit the following characteristics according
to Michelle L. Casto:
1. • More career opportunities for everyone.
2. • Freedom to choose from a variety of jobs, tasks, and assignments.
3. • More flexibility in how and where work is performed i.e., working from home or telecommuting).
4. • More control over your own time.
5. • Greater opportunity to express yourself through your work.
6. • Ability to shape and reshape your life's work according to your values and interests. Increased
opportunity to develop other skills by working in various industries and environments.
7. • Self-empowerment mindset. Allows one to create situations or positions where one can fill a need in
the world that is not being filled. Opportunity to present oneself as an independent contractor or vendor
with services to offer.
THE EXPERIENCE ECONOMY
• The nature of the service economy has moved past the transactional
nature of services to one of the experience-based relationships.
Consider how Starbucks and Disney World have defined their
respective services as an experience. Table 1.3 describes the features
of different economies in the historical evolution from agrarian to
experience.
• Note that the experience economy is further divided into consumer
services and business services.
Consumer Service Experience
• Experiences create added value by engaging and connecting with the
customer in a personal and memorable way.
Four types of consumer experiences
Figure 1.6 displays four types of consumer experiences characterized by
the level of customer participation and level of interaction with the
environment
Consumer service experience design based
on Five principles
1. Theme the experience is illustrated by the Forum Shops in Las Vegas that are
decorated with Roman columns and where salespeople wear togas.
2. An example of harmonize impressions with positive cues is found at the O'Hare
Airport Parking Garage where each floor is painted with a distinctive color and
unique music is played to help returning travelers find their parked
automobiles (e.g., hard rock on the first floor and classical on the second).
3. Eliminate negative cues is illustrated creatively by the use of taking trash
containers (i.e., the container says "thank you" when an item is discarded) at a
Cinemark Theater in Austin, Texas.
4. An example of mix in memorabilia is providing group pictures of vacationers to
Club Med or Hard Rock Cafe.
5. Engage all five senses is found at the Rainforest Café in Las Vegas (e.g., jungle
sounds and mist in the air). Touch, taste, hear, smell, see. Eg. Cat cafe in japan
Business Service Experience
• For business-to-business (B2B) services, value is derived from the
coproduction or collaborative nature of the relationship such as we
see in a consultancy engagement
• The core experience of an innovative use of information that is not
consumed in the exchange, but is enhanced and remains available for
further use by others.
Business Service Experience
• The new business service experience has three dimensions:
• Co-creation of value • The customer is a co-producer of the value
extracted from the relationship. • The customer is an input to the service
process. Testamonies
• Relationships • The relationship with the customer is of paramount
importance because it is a source of innovation and differentiation. Long-
term relationships facilitate the ability to tailor the service offerings to
customers' needs.
• Service capability • Provide service capacity to meet fluctuations in
demands while retaining the quality of service. • Quality of service is
measured primarily from the perspective of the customer.
Table 1.4 presents a complete listing of both consumer
and business service experiences to be found in the
21st century, all of which rely heavily on a skilled
knowledge-based workforce.
 Foundation Premises of
Service-Dominant Logic
1. Service is the fundamental basis of exchange.
2. Indirect exchange masks the basis of exchange.
3. Goods are distribution mechanisms for service provision.
4. Operant resources are the source of competitive advantage
5. All economies are service economies.
6. The customer is always a co-creator of value.
7. The enterprise can only offer value propositions.
8. A service-centered view is customer oriented and relational.
9. All economic and social actors are resource integrators.
10. Value is uniquely determined by the beneficiary.
1-27
DISTINCTIVE CHARACTERISTICS OF SERVICE
OPERATIONS
• In services, a distinction must be made between inputs and
resources.
• For services, inputs are the customers themselves, and resources are
the facilitating goods, employee labor, and capital at the command of
the service manager.
• Thus, to function, the service system must interact with the
customers as participants in the service process. Because customers
typically arrive at their discretion and with unique demands on the
service system, matching service capacity with demand is a challenge.
Distinctive Characteristics of Services
(What is actually a service?)
• Customer Participation in the Service Process: attention to facility design,
opportunities for co-production, concern for customer and employee
behavior
• Simultaneity: opportunities for personal selling, interaction creates
customer perceptions of quality
• Perishability: cannot inventory, opportunity loss of idle capacity, need to
match supply with demand
• Intangibility: creative advertising, no patent protection, importance of
reputation
• Heterogeneity: customer involvement in delivery process results in
variability
Customer Participation in the Service Process
• An important consideration in providing a service is the realization that the
customer can play an active part in the process. A few examples will
illustrate that the knowledge, experience, motivation, and even honesty of
the customer all directly affect the performance of the service system
• 1. The popularity of supermarkets and discount stores is predicated on the
idea that customers are willing to assume an active role in the retailing
process.
• 2. The accuracy of a patient's medical record can greatly influence the
effectiveness of the attending physician.
• 3. The education of a student is determined largely by the student's own
effort and contributions
• Customer participate in the service process
Customer Participation in the Service Process
• The presence of the customer as a participant in the service process
requires attention to facility design
• Customer only experience the front office. Attention to interior decorating,
furnishings, layout, noise and even color can influence the customer's
perception of the service.
• For example . That automobile are made in a hot, dirty, noisy factory is of
no concern to the eventual buyers because they first see the product in the
pleasant surroundings of a dealer's showroom.
• However, some innovative services have opened the back office to public
scrutiny to promote confidence in the service (e.g., some restaurants
provide a view into the kitchen, some auto repair bays can be observed
through windows in the wait ing area).
Customer Participation in the Service Process
This strategy is best illustrated by the fast-food restaurants that have
significantly reduced the typical number of serving and cleaning
personnel. The customer not only places the order directly from a
limited menu but also is expected to clear the table after the meal.
Give more example...............................
Simultaneity
• The fact that services are created and consumed simultaneously and thus, cannot
be stored is a critical feature in the management of services.
• This inability to inventory services precludes using the traditional manufacturing
strategy of relying on inventory as a buffer to absorb fluctuations in demand.
• For services, the decoupling is achieved through customer waiting. Inventory
control is a major issue in manufacturing operations, whereas in services, the
corresponding problem is customer waiting, or "queuing.
• The problems of selecting service capacity, facility utilization, and use of idle time
all are balanced against customer waiting time.
• The simultaneous production and consumption in services also eliminates many
opportunities for quality-control intervention A product can be inspected before
delivcry, but services must rely on other measures to ensure the quality of
services delivered.
Perishability
• A service is a perishable commodity.
• Consider an empty airline seat, an unoccupied hospital or hotel room,
or an hour without a patient in the day of a dentist. In each case, a
lost opportunity has occurred.
• Because a service cannot be stored, it is lost forever when not used.
• The full utilization of service capacity becomes a management
challenge, because customer demand exhibits considerable variation
and building inventory to absorb these fluctuations is not an option
• How airline filled up empty seat or hotel filled up empty room?
• How restaurant avoid lunch hour rush?
Intangibility
• Services are ideas and concepts, products are things. Therefore, it
follows that service innovations are not patentable. To secure the
benefits of a novel service concept, the firm must expand extremely
rapidly and preempt any competitors.
• Franchising has been the vehicle to secure market areas and establish
a brand name.
• Franchising allows the parent firm to sell its idea to a local
entrepreneur, thus preserving capital while retaining control and
reducing risk The intangible nature of services also presents a
problem for customers.
Intangibility
• In many service areas, the government has intervened to guarantee
acceptable service performances.
• Through the use of registration, licensing, and regulation, the
government can assure consumers that the training and test
performance of some service providers meet certain standards.
• Thus, we find that public construction plans must be approved by a
registered professional engineer, a doctor must be licensed to
practice medicine, and the power company is a regulated utility.
• In its efforts to protect the consumer, however, the government may
be stifling innovation, raising barriers to entry, and generally reducing
competition
Heterogeneity
• The combination of the intangible nature of services and the customer as a participant in
the service delivery system results in a variation of service from customer to customer.
• The interaction between customer and employee in services, however, creates the
possibility of a more satisfying human work experience. In services, work activity
generally is oriented toward people rather than toward things. There are exceptions,
however, for services that process information (c.g., communications) or customers'
property (c.g., brokerage services). In the limited customer-contact service industries, we
now see a dramatic reduction in the level of labor intensiveness through the introduction
of self-service technology
• Even the introduction of automation may strengthen personalization by eliminating the
relatively routine impersonal tasks, thereby permitting increased personal attention to
the remaining work. At the same time, personal attention creates opportunities for
variability in the service that is provided. This is not inherently bad, however, unless
customers perceive a significant variation in quality.
Heterogeneity

• A disgruntled service employee, however, can do irreparable harm to the

organization because the employee is the firm's sole contact with
customers.
• Therefore, the service manager must be concerned about the employees'
attitudes as well as their performance. J Willard Marriott, founder of the
Marriott Hotel chain, has said. "In the service business you can't make
happy guests with unhappy employees.
• Through training and genuine concern for employee welfare, the
organizational goals can be internalized ser must be concerne firms sole
their performance
• JnT where they trash your packages. Cause not happy
Heterogeneity
The development of standards and of employee training in proper
procedures is the key to ensuring consistency in the service provided. It
is rather impractical to monitor the output of each employee, thus,
customers play a role in quality control through their feedback. The
direct customer employee contact has implications for service
(industrial) relations as well.
The Service Package
• Supporting Facility: The physical resources that must be in place
before a service can be sold. Examples are golf course, ski lift,
hospital, airplane.
• Facilitating Goods: The material consumed by the buyer or items
provided by the consumer. Examples are food items, legal
documents, golf clubs, medical history.
• Information: Operations data or information that is provided by the
customer to enable efficient and customized service. Examples are
patient medical records, seats available on a flight, customer
preferences, location of customer to dispatch a taxi.
The Service Package
All of these features are experienced by the
customer and form the basis of his or her
perception of the service
• 1. Supporting facility. The physical resources that must be in place before a service can be offered.
Examples are a golf course, a ski lift, a hospital, and an airplane.
• 2. Facilitating goods. The material purchased or consumed by the buyer, or the items provided by
the customer. Examples are golf clubs, skis, food items, replacement auto parts, legal documents,
and medical supplies.
• 3. Information. Data that is available from the customer or provider to enable efficient and
customized service. Examples include electronic patient medical records, airline Web site showing
seats available on a flight, customer preferences from prior visits, GPS location of customer to
dispatch a taxi, and Google map link on a hotel Web site.
• 4. Explicit services. The benefits that are readily observable by the senses and that con sist of the
essential or intrinsic features of the service. Examples are the absence ofpain after a tooth is
repaired a smooth-running automobile after a tuneup, and the response time of a fire
department.
• 5. Implicit services. Psychological benefits that the customer may sense only vaguely, or the
extrinsic features of the service. Examples are the status of a degree from an Ivy League school,
the privacy of a loan office, and worry-free auto repair. All of these features are experienced by
the customer and form the basis of his or her perception of the service
The End
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