1 Service Management Ch. 1, Role of Services in an Economy

2 Learning Objectives 1. Central role of services in an economy. 2. Evolution of an economy from an agrarian society to a service society. 3. Features of preindustrial, industrial, and postindustrial societies. 4. Features of the new experience economy.

3 0. Service Definitions A Service is a Time-perishable, Intangible Experience Performed for a Customer Acting in the Role of a Coproducer. -James Fitzsimmons -James Fitzsimmons

4 0. Definition of Service Firms Service Enterprises are Organizations that Facilitate the Production and Distribution of Goods, Service Enterprises are Organizations that Facilitate the Production and Distribution of Goods, Support Other Firms in Meeting Their Goals, and Support Other Firms in Meeting Their Goals, and Add Value to Our Personal Lives. Add Value to Our Personal Lives. - James Fitzsimmons - James Fitzsimmons

5 1. Interactive Role of Services

6 1. Integration of Downstream Services example: automobile manufacturers Discussion: outsourcing, offshore

7 2. Economic Evolution Clark-Fisher hypothesis Three vs. Five stages Three categories

2. Trends in U.S. Employment by Sector

9 2. Percent Employment in Services Top Ten Postindustrial Nations Country United States United Kingdom The Netherlands Sweden Canada Australia France Japan Germany41.8n/a Italy

10 2. Percent Service Employment for Selected Industrialized Nations Country United States Canada Japan France Israel Italy China Taiwan

11 2. 服務業在先進國家扮演火車頭 2. 服務業在先進國家扮演火車頭

12 3. Stages of Economic Development by Daniel Bell Dominant Human Unit of Living Dominant Human Unit of Living Society Game activity labor social life measure Society Game activity labor social life measure Pre- Against Agriculture Raw Extended Sub- Pre- Against Agriculture Raw Extended Sub- Industrial nature Mining muscle household sistence Industrial nature Mining muscle household sistence Industrial Against Goods Machine Individual Quantity Industrial Against Goods Machine Individual Quantity fabricated production fabricated production nature nature Post- Among Services Artistic Community Quality of Post- Among Services Artistic Community Quality of industrial persons life industrial persons life

13 4. 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)

4. Source of Service Sector Growth Information Technology (e.g. Internet) Innovation Push theory (e.g. Post-it) Pull theory (e.g. Cash Management) Difficulty of testing service prototypes Difficulty of testing service prototypes Changing Demographics Aging of the population Two-income families Growth in number of single people Home as sanctuary

Discussion Topics Illustrate how the type of work he or she does influences a person’s lifestyle. E.g. contrast a farmer, a factory worker, and a school teacher. Is it possible for an economy to be based entirely on services? What is the value of self-service in an economy?

16 Interactive Class Exercise 1. Identifies service firms that should be listed in the Fortune 100 and places them in rank order of annual revenue. case: WAL-MART (p.14) case: WAL-MART (p.14) 2. 搜尋台灣的企業排名，服務業次分類的排 名。

Distribution of GDP in the US Economy 17