1. Welcome to Service Management Role of Services in an Economy
Sincere congratulations to the entire Wolverine team!
17 consecutive quarter of record revenue and earnings per share is no small feat.
Your brand portfolio is strong and covers much competitive space.
the company has not been content with its success; and is looking to leverage its brands beyond food rather than across apparel and accessories.
You have set ambitious goals for the future.
FM : Anis Gunawan,MM

2. Seay Professor of Business Emeritus University of Texas at Austin
James Fitzsimmons
Seay Professor of Business Emeritus
University of Texas at Austin

3. Service Definitions Services are deeds, processes, and performances.
Orlando
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

4. 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 SM

5. Service Can Mean all of These
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Academic Areas
Centers & Institutes
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Service Can Mean all of These
Service as a product
Customer service
Services as value add for goods
Service embedded in a tangible product
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6. Examples of Service Industries
Health Care
hospital, medical practice, dentistry, eye care
Professional Services
accounting, legal, architectural
Financial Services
banking, investment advising, insurance
Hospitality
restaurant, hotel/motel, bed & breakfast
ski resort, rafting
Travel
airline, travel agency, theme park
Others
hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design
Airline

7. Challenges for Services
Defining and improving quality
Ensuring the delivery of consistent quality
Designing and testing new services
Communicating and maintaining a consistent image
Accommodating fluctuating demand
Motivating and sustaining employee commitment
Coordinating marketing, operations, and human resource efforts
Setting prices
Finding a balance between standardization versus customization SQ

8. Why do firms focus on Services?
Services can provide higher profit margins and growth potential than products
Customer satisfaction and loyalty are driven by service excellence
Services can be used as a differentiation strategy in competitive markets
Jerome
The are 3 main reasons why our program is focusing on services.
It provides a higher profit margin than tangible products,
Increases satisfaction and retention,
Provides a competitive advantage over others.
I am going to use two examples to illustrate these points.
The automotive industry has typically been perceived as a manufacturing industry. However,
after-sale services and parts account for nearly 80% of all revenue opportunities, and more than 50% of the average automobile dealer’s profits
It is by far the largest creator of shareholder value on a percentage basis. A GM study revealed that $9 billion in after sale revenue produced $2 billion in profits (22% margin). Profits from $150 billion car sales were much lower.
JD Power and Associates published a report showing a strong correlation between customer satisfaction with after-sale services and customer intent to repurchase the same brand (Lexus and Saturn cars)
Hyundai’s success is due largely to its differentiation strategy of offering 10 year - 100,000 mile guarantee. The service offering is changing customer’s perception of the brand
The same can be said about the personal computer industry.
With the advancement of technology, personal computers are now becoming more and more of a commodity. While 25% of revenue opportunities are in the initial sale, most revenue opportunities are from after-sale.
Company responsiveness to customer calls is the biggest driver customer satisfaction with its product.
Dell revolutionized the industry by being the first to offer mass customization of personal computers.
Across manufacturing companies, after-sale services and parts contributes about 25% of total revenue, and 40%-50% of all profits
Services related revenue exceeds first-time product sales by 500% %
Retail industry derive largest margins from sale of extended warranties
It is a program that is designed in response to a business environment that is increasingly moving away from a product orientation to a service-focus
GE, IBM other good examples. SQ

9. Implications of Intangibility
Services cannot be inventoried
Services cannot be easily patented
Services cannot be readily displayed or communicated
Pricing is difficult

10. Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee and customer actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches what was planned and promoted

11. Implications of Simultaneous Production and Consumption
Customers participate in and affect the transaction
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
Mass production is difficult

12. Implications of Perishability
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold

13. Examples of Goods Companies that are Expanding into Services
Kodak
Boeing

14. Role of Services in an EconomyBT
Role of Services in an Economy NY
INFRASTRUCTURE SERVICE
· Communications
· Transportation
· Utilities
· Banking
FINANCIALSERVICES
· Financing
· Leasing
· Insurance
PERSONALSERVICE
· Healthcare
· Restaurants
· Hotels
MANUFACTURING
Services inside company:
· Finance
· Accounting
· Legal
· R&D and design
DISTRIBUTION SERVICES
· Wholesaling
· Retailing
· Repairing
CONSUMER
(Self-service)
Cons
BUSINESS SERVICES
· Consulting
· Auditing
· Advertising
· Waste disposal
GOVERNMENT SERVICES
· Military
· Education
· Judicial
· Police and fire protection

15. Percent Employment in Services Top Ten Postindustrial Nations
Country
1965
1975
1985
1995
2005
United States
59.5
66.4
70.0
74.1
78.6
United Kingdom
51.3
58.3
64.1
71.4
77.0
The Netherlands
52.5
60.9
68.3
73.4
76.5
Sweden
46.5
57.7
66.1
71.5
76.3
Canada
57.8
65.8
70.6
74.8
76.0
Australia
54.6
61.5
68.4
73.1
75.8
France
43.9
51.9
61.4
Japan
44.8
52.0
57.0
68.6
Germany
41.8
n/a
51.6
60.8
68.5
Italy
36.5
44.0
55.3
62.2
65.5

16. Trends in U.S. Employment by Sector

17. Distribution of GDP in the US Economy
Product
Services
Physical
Information 6%
10%
31%
53%
37%
63%
84%
16% D B A C
IBM

18. Stages of Economic Development
Pre Use of Standard
dominant Human Unit of of Living
Society Game Activity Labor Social Life Measure Structure Technology
Pre Against Agriculture Raw Extended Sub Routine Simple hand
Industrial Nature Mining muscle household sistence Traditional tools power Authoritative
Industrial Against Goods Machine Individual Quantity Bureaucratic Machines
fabricated production tending of goods Hierarchical
nature
Post Among Services Artistic Community Quality of Inter Information
industrial Persons Creative life in terms dependent
Intellectual health,
education,
recreation
Bethel

19. Economic Evolution Economy Agrarian Industrial Service Experience
Offering
Food
Packaged
goods
Commodity
service
Consumer services
Business
services
Function
Extract
Make
Deliver
Stage
Co-create
Nature
Fungible
Tangible
Intangible
Memorable
Effectual
Attribute
Natural
Standardized
Customized
Personal
Growth
Method of Supply
Stored in bulk
Inventoried
Delivered on demand
Revealed over time
Sustained over time
Seller
Trader
Producer
Provider
Stager
Collaborator
Buyer
Market
Customer
Client
Guest
Expectation
Quantity
Features
Benefits
Sensations
Capability

20. The Four Realms of an Experience

21. 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)

22. Typology of Services in the 21st Century
Core Experience
Essential Feature
Examples
Creative
Present ideas
Advertising, theater
Enabling
Act as intermediary
Transportation, communications
Experiential
Presence of customer
Massage, theme park
Extending
Extend and maintain
Warranty, health check
Entrusted
Contractual agreement
Service/repair, portfolio mgt.
Information
Access to information
Internet search engine
Innovation
Facilitate new concepts
R&D services, product testing
Problem solving
Access to specialists
Consultants, counseling
Quality of life
Improve well-being
Healthcare, recreation, tourism
Regulation
Establish rules and regulations
Environment, legal, patents
ORlando

23. in Services Management
Case study
in Services Management

24. Case : Marriot Hilton.
When Tom and Ruth checked out of the Marriott Hilton Head Resort,
they were each given a brief postage paid survey to complete and
return through the mail. The survey asked 15 questions about their
stay at the Marriott Resort. It covered such attributes as overall satisfaction,
check-in speed/efficiency, cleanliness, decor and comfort of their room,
friendliness and efficiency of the staff, quality of dining experience, quality
of merchandise/gift shop, intention to return, and willingness to recommend
to friends.

25. Question :
What is the decision facing Marriot Hilton?
What factors are important in understanding this decision situation?
What are the alternatives?
4. What decision(s) do you recommend?

26. Question no 1 :
What is the decision facing Marriot Hilton?
What types of research have to Marriott conduct ?

27. Question no 2 :
What factors are important in understanding this decision situation?
Consumer behavior that covered such attributes as overall satisfaction, check-in speed/efficiency, cleanliness, decor and comfort of their room, friendliness and efficiency of the staff, quality of dining experience, quality of merchandise/gift shop, intention to return, and willingness to recommend

28. A) Complaint solicitation B) Critical incidents studies
Question no 3 : What are the alternatives?
A) Complaint solicitation
B) Critical incidents studies
C) Relationship surveys
D) Trailer calls
E) Lost customer research

29. Question no 4. What decision(s) do you recommend?
D) Trailer calls