Chapter – 1 Role of Service in an Economy Service Management (5e) Operations, Strategy, Information Technology By Fitzsimmons and Fitzsimmons Chapter – 1 Role of Service in an Economy

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

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

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

Role of Services in an Economy

Percent Service Employment for Selected Nations

Trends in U.S. Employment by Sector

Stages of Economic Development

The New Experience Economy

The Four Realms of an Experience

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)

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