Transcript Role of Services in an Economy

Welcome to
Management of
Service Operations
Professor Ron Sedlock
Learning Objectives (Chap 1)
1.
2.
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4.
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
A service is a time-perishable, intangible
experience performed for a customer acting in
the role of a co-producer.
James Fitzsimmons
Role of Services in an Economy
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Year
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Proportation of total employement
Trends in U.S. Employment by
Sector
Service
Manufacturing
Agriculture
Stages of Economic
Development
Predominant
activity
Use of
human Unit of
labor
social life
Standard
of living
measure Structure
Agriculture
Mining
Raw
Extended
muscle household
power
Subsistence
Routine
Simple hand
Traditional tools
Authoritative
Industrial Against Goods
fabricated production
nature
Machine Individual
tending
Quantity
of goods
Bureaucratic Machines
Hierarchical
PostAmong
industrial Persons
Artistic Community Quality of
InterInformation
Creative
life in terms dependent
Intellectual
of health, Global
education,
recreation
Society
Game
PreAgainst
Industrial Nature
Services
Technology
The New Experience Economy
Economy
Agrarian
Industrial
Service
Experience
Function
Extract
Make
Deliver
Stage
Nature
Fungible
Tangible
Intangible
Memorable
Attribute
Natural
Standardized Customized Personal
Method of
supply
Stored in
bulk
Inventoried
Seller
Trader
Manufacturer Provider
Stager
Buyer
Market
User
Guest
Delivered Revealed
on demand over time
Client
The Four Realms of an Experience
Customer Participation
Passive
Active
Absorption Entertainment Education
(Movie)
(Language)
Environmental
Relationship
Immersion Esthetic
(Tourist)
Escapist
(ScubaDiving)
Experience Design Principles
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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
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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
Discussion Topics
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Illustrate how the type of work he or she does
influences a person’s lifestyle. For example,
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?
How does trade barriers affect a nation’s
economy?