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Service Management - Chapter 2

This document discusses the distinctive characteristics of service operations and how they differ from goods. It covers the service package, classifying services by their delivery process, strategic service classifications, and concepts like service-dominant logic and the customer's role in service delivery.

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30 views9 pages

Service Management - Chapter 2

This document discusses the distinctive characteristics of service operations and how they differ from goods. It covers the service package, classifying services by their delivery process, strategic service classifications, and concepts like service-dominant logic and the customer's role in service delivery.

Uploaded by

ashkanfashami
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 2

The Nature of Services

1
Learning Objectives
1. Explain what is meant by a service-product bundle.
2. Identify and critique the five distinctive characteristics of a service
operation and explain the implications for managers.
3. Explain how services can be described as customers renting resources.
4. Describe a service using the five dimensions of the service package.
5. Use the service process matrix to classify a service.
6. Explain how a strategic classification of services can be helpful to
managers.
7. Explain the essential features of the service-dominant logic.
8. Explain the role of a service manager from an open-systems view of
service operations.
2
Distinctive Characteristics of Service Operations

• In services, inputs are the customers, and resources are the facilitating
goods and employee labour.
• The customer can play an active part in the process.
• Taking the customer out of the process is becoming a common practice.
• Services are created and consumed simultaneously and, thus, cannot be
stored.
• In services, a problem is customer waiting or “queuing.”
• The simultaneous production and consumption of services also eliminates
many opportunities for quality-control intervention.
• A service is a perishable commodity.
• Consumer demand for services typically exhibits very cyclic behaviour
over short periods. 3
• Managers can address the perishability problem of a service:
 Smooth demand.
 Adjust service capacity.
 Allow customers to wait.

• Services are intangible.


• Services vary from customer to customer.
• Customers play a role in quality control through their feedback.
• The direct customer–employee contact has implications for service
relations.

4
Non-ownership Characteristic of Services

• Services, unlike goods, do not involve transfer of ownership.


• Sharing resources among customers presents management challenges.

5
The Service Package
• Service managers have difficulty describing their products.
• The service package is defined as a bundle of goods and services.

• The service package comprises:


 Supporting facility.
 Facilitating goods.
 Information.
 Explicit services.
 Implicit services.

6
Grouping Services by Delivery Process
• Concepts of service management should apply to all service organisations.
• A service classification scheme can help organise our service management
discussion.
• The service process matrix has two dimensions:
 The vertical dimension measures the degree of labour intensity.
 The horizontal dimension measures the degree of customer interaction and customisation.

• Service factories provide a standardised service with high capital


investment.
• Service shops permit more service customisation.
• Customers of a mass service will receive an undifferentiated service.
• Highly trained specialists will give those seeking a professional service
individual attention. 7
Classifying Services for Strategic Insights
• The diversity of service firms in the economy and their differing customer
relationships.
• Four possible classifications of services:
 Tangible actions directed to the customer.
 Tangible actions directed at the customer’s possessions.
 Intangible actions directed at the customer’s intellect.
 Intangible actions performed on the customer’s assets.

• Service firms can build long-term relationships with their customers.


• Knowing your customers is a significant competitive advantage for a
service organisation.
• An opportunity exists to tailor a service to the customer’s needs.
8
• The time perishability of service capacity creates a challenge for service
managers.
• The service delivery method has a geographic component and a level-of-
customer-interaction component.
• Service-dominant logic is a service-centred alternative to the traditional
goods-centred paradigm.
• Service-dominant logic has become the foundation of a new field of study
called “service science.”
• The service operations manager's role includes production and marketing
functions in an open system with the customer as a participant.
• An open-system concept of services also allows one to view the customer
as a co-producer.
• Customer impressions of service quality are based on the total service
experience.
• For services, the process is the product.
9

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