Chapter

1
2
Service Management (5e) Operations, Strategy,
Information Technology By Fitzsimmons and
Fitzsimmons

• Chapter 2
• The Nature of Services

2
Learning Objectives

• Classify a service into one of four categories
  using the service process matrix.
• Describe a service using the four dimensions of
  the service package.
• Discuss the managerial implications of the
  distinctive characteristics of a service
  operation.
• Discuss the insights obtained from a strategic
  classification of services.
• Discuss the role of a service manager from an
  open-systems view of service.

3
An Integrated Approach to Service Management

• The Eight Components Product Elements
  Place, Cyberspace, and Time Promotion and
  Education Price and Other User Outlays
  Process Productivity and Quality People
  Physical Evidence
• Require the Integration of Marketing, Operations,
  and Human
• Resources

4
Service/Product Bundle
Element Core Goods Example Core Service Example
Business Custom clothier Business hotel
Core Business suits Room for the night
Peripheral Goods Garment bag Bath robe
Peripheral Service Deferred payment plans In house restaurant
Variant Coffee lounge Airport shuttle
5
The Service Process Matrix


6
The Service Package

• Supporting Facility The physical resources that
  must be in place before a service can be sold.
  Examples are golf course, ski lift, hospital,
  airplane.
• Facilitating Goods The material consumed by the
  buyer or items provided by the consumer.
  Examples are food items, legal documents, golf
  clubs, medical history.
• Information Operations data or information that
  is provided by the customer to enable efficient
  and customized service. Examples are patient
  medical records, seats available on a flight,
  customer preferences, location of customer to
  dispatch a taxi.

7
The Service Package (cont.)

• Explicit Services Benefits readily observable
  by the senses. The essential or intrinsic
  features. Examples are quality of meal, attitude
  of the waiter, on-time departure.
• Implicit Services Psychological benefits or
  extrinsic features which the consumer may sense
  only vaguely. Examples are privacy of loan
  office, security of a well lighted parking lot.

8
Distinctive Characteristics of Services

• Customer Participation in the Service Process
  attention to facility design but opportunities
  for co-production
• Simultaneity opportunities for personal
  selling, interaction creates customer
  perceptions of quality
• Perishability cannot inventory, opportunity
  loss of idle capacity, need to match supply with
  demand
• Intangibility creative advertising, no patent
  protection, importance of reputation
• Heterogeneity customer participation in
  delivery process results in variability

9
Strategic Service Classification (Nature of the
Service Act)
10
Strategic Service Classification (Relationship
with Customers)

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11
Strategic Service Classification (Customization
and Judgment)

12
Strategic Service Classification (Nature of
Demand and Supply)

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13
Strategic Service Classification (Method of
Service Delivery)

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14
Open Systems View of Services
15
Topics for Discussion

• What are the characteristics of services that
  will be most appropriate for Internet delivery?
• When does collecting information through service
  membership become an invasion of privacy?
• What are some management problems associated with
  allowing service employees to exercise judgement
  in meeting customer needs?
• What factors are important for a manager to
  consider when attempting to enhance a service
  firms image?
• What contributions to the management of
  professional service firms can a business school
  graduate provide?