FM : Anis Gunawan,MM anisg@pmbs.ac.id

1. Welcome toService ManagementRole of Services in an Economy FM : Anis Gunawan,MM anisg@pmbs.ac.id

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

3. Service Definitions 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 • Service as a product • Customer service • Services as value add for goods • Service embedded in a tangible product

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 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. BT 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 ServicesTop Ten Postindustrial Nations

16. Trends in U.S. Employment by Sector

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

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 ORlando

23. 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. 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