Service Operations

Business Services

Co-creation of value; long term relationships; service capability for demand fluctuations

adjust service capacity

1. using part time help during peak hours 2. scheduling work shifts to vary workforce needs according to demand 3. increasing the customer self service content of the service

smooth demand

1. using reservations or appointments 2. using price incentives 3. demarketing peak times

Realms of Experience

Passive, Active participation; absorption and immersion for environmental relationship

clark fisher hypothesis

a classification of economies according to the activity of the majority of the work force

service process matrix

a classification of services based on the degree of interaction and customization and the degree of labor intensity that results in four categories: service factory, service shop, mass service, and professional service

follow your customers

a concept involving expansion overseas to service existing customers who already have established multinational operations

service science

a field of study of the transfer and sharing of resources within and among service systems

multi country expansion

a growth strategy in which a service is replicated in more than one country using a franchising formula with little adaptation to the local culture

metropolitan metric

a measure of distance traveled assuming rectangular displacement (north, south, east, west travel in urban areas)

Perishability

a perishable commodity that describes services; empty airline seat; unoccupied hospital room

competitive clustering

a reaction to observed consumer behavior when they are choosing among competitors, dealers are concentrated, nearby competitors; the grouping of competitors (automobile dealers) in close proximity for convenience in comparative shopping by customers

huff model

a retail location model that is based on an analogy to celestial gravity to measure the attraction of a customer for a facility

time perishable capacity

a service that is not used during some period of time and, therefore, is lost forever (an empty seat on an airplane)

new experience economy

a stage of economic evolution in which added value is created by engaging and connecting with the customer in a personal and memorable way

service dominant logic

a view that all economies are service economies in which value is always co-created in the exchange of doing something for another party

Site considerations

access, visibility, traffic, parking, expansion, environment, competition, government, labor, complements

focused network

allows management to maintain control, which ensures consistency of service across all locations; federal express; mcdonald's; red roof inn; a single service offered at multiple sites, often by use of franchising

service

an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as a solution to a customers problems

franchising

an alternative to expanding through use of internally generated profits or by seeking funds in the capital markets; replicating a service geographically by attracting investors who become independent owner operators bound by a contractual agreement; a method of duplicating a service concept by attracting investors who become owner operators bound by a contractual agreement to offer the service in a consistent manner

importing customers

an approach to growth that attracts customers to an existing site rather than building sites overseas

cross median

an approach to the location of a single facility using the metropolitan metric to minimize the total weighted distance traveled

focus

can be developed by offering the same narrowly defined service at many locations

Postindustrial society

concerned with the quality of life as measured by services such as health, education, and recreation; the professional person; information is the key resource; a service society in which people are engaged in information, intellectual, or creative-intensive activities

Transnational operations

cultural transfer ability, labor market norms, host government policy

Characteristics of Service

customer participation in the service process; simultaneity; perishability; heterogeneity; intangibility

Mass Service

customers will receive an undifferentiated service in a labor intensive environment; retailing, wholesaling, school, commercial banking

Strategic Planning

customers, competitors, company, currency, country

information

data that is available from the customer or provided to enable efficient and customized service; accurate, timely, useful

Service Package

defined as a bundle of goods and services with information that is provided in some environment; supporting facility; facilitating goods; information; explicit services; implicit services; five components describing a service: supporting facility, facilitating goods, information, explicit service, implicit service

Front Office

for customers, service is an experience occurring in the ___________ of the service facility, and the quality of service is enhance if the service facility is designed from the customer's perspective; the service delivery activities observable to the customer (dining area of a restaurant)

franchiser issue

franchisee autonomy, franchise contract, conflict resolution

international strategies

global strategy, multi domestic strategy, transnational strategy

saturation marketing

ideas is to group outlets of the same firm tightly in urban and other high traffic areas; cannibalization of sales, waffle house, coffee house; the location of a firm's individual outlets (ice cream vendors) in close proximity to create a significant presence that attracts customer attention

Pull Theory of Innovation

identify an unmet customer need; services innovations that are driven by customer needs

People's Minds

intangible actions directed at the customer's intellect, such as entertainment; theaters, education, broadcasting

Intangible assets

intangible actions performed on the customer's assets such as financial services; banking, legal services, accounting, securities, insurance

Back Office

luggage handling area; which is operated in a factory like environment; promote confidence in the service by opening up to public; the service delivery activities not observable to the customer

franchisee benefits

management training, brand name, national advertising, acquisition of a proven business, economies of scale

Global Service Strategy

multi-country expansion, importing customers, following your customers, service offshoring, beating the clock

Classifying Services for Strategic Insights

nature of the service act; relationship with customers; customization and judgment; nature of demand and capacity; method of service delivery

flexibility

of a location is a measure of the degree to which the service can react to changing economic situations

focused service

often is limited to a single site because of talented personnel, such as award winning chef or a nationally recognized heart surgeon; dental practice, retail store; a single service offered at a single location (family restaurant)

diversified network

one brand name that established a broad marketing image; accenture, american express, nations bank; peripheral services differ vs core services; a situation in which many services offered at multiple locations (branch banks)

Maximal service distance

one such measure is the distance that the most distant customer would have to travel to reach the facility

Service shop

permit more service customization, but they do so in a high capital environment; hospitals, auto repair

Labor market norms

power distance, individualism, masculinity, uncertainty avoidance, long term orientation

Push Theory of Innovation

product development model that is driven by technology and engineering; product innovations that originate in scientific laboratories

Industrial society

production of goods is the predominant activity, making more with less; standard of living by the quantity of goods; a society dominated by factory work in mass production industries

Service factory

provides a standardized service with high capital investment, must like a line flow manufacturing plant; airlines, trucking, hotels, resorts

implicit services

psychological benefits that the customer may sense only vaguely, or the extrinsic features of the service; attitude of service, atmosphere, waiting, status, sense of well being, privacy and security, convenience; psychological benefits or extrinsic features the customer may sense only vaguely (security of a well lighted parking lot, privacy of a loan office)

competitive positioning

refers to methods by which the firm can establish itself relative to its competitors

servitization

revenue enhancement by bundling service with sale of a product (financing new car sale)

service offshoring

sending back office activities overseas to gain labor cost savings

Recession Resistent

services are __________ because by their nature, services cannot be inventoried; production and consumption occur simultaneously, demand is more stable, make do with products they have so they need repair and maintenance services

time perishable

services are a ___________, intangible experience performed for a customer acting in the role of co producer

Intangibiltiy

services are ideas and concepts; products are things; therefore, it follows that service innovations are not patentable

Physical possessions

tangible actions directed at the customer's possessions, such as laundry cleaning and janitorial services

People's bodies

tangible actions directed to the customer, such as passenger transportation and personal care, restaurants

demand management

the ability to control the quantity, quality, and timing of demand

e distance

the barrier created by internal and external navigation, arises from the desire to attract customers to a Web Site; a barrier found in web site design created by internal and external navigation

explicit services

the benefits that are readily observable by the senses and that consist of the essential or intrinsic features of the service; training of service personnel, comprehensiveness, consistency, availability the essential or intrinsic features readily observable by the senses (on time departure, quality of meal)

Preindustrial society

the condition of most of the world's population today is one of subsistence; extraction, agriculture, mining, fishing; an agrarian society structured around farming and subsistence living

Inputs

the customers themselves

resources

the facilitating goods, employee labor, and capital at the command of the service manager

marketing intermediaries

the idea that services are created and consumed simultaneously does not seem to allow for the channel of distribution concept as developed for goods; use separate organizational entities as intermediaries between the producer and the consumer (visa); a business entity in the channel of distribution between the final customer and the service provider (a bank extending credit to a retailer through a credit card)

facilitating goods

the material purchased or consumed by the buyer, or the items provided by the customer; consistency, quantity, selection; material purchased or consumed by the buyer, or items provided by the customer (food, golf clubs)

Location set covering

the minimum number and location of facilities that will serve all demand points within some specified maximal service distance; an approach to finding the minimum number and location of facilities that will serve all demand points within a specified maximum travel distance

supporting facility

the physical resources that must be in place before a service can be offered; location, interior decorating, supporting equipment, architectural appropriateness, facility layout; the physical resources that must be in place before a service can be offered (golf course, hospital, building, airplane)

clustered service

their service market is not defined by their location; classic multiservice, singlesite facilities; stanford university; mayo clinic; usaa insurance; ski resort; a situation in which many services are offered at a single location (hospital)

Professional Service

those seeking __________ will be given individual attention by highly trained specialists; physicians, lawyers, accountants, architects

beating the clock

using service locations around the globe to achieve 24 hour service availability

Heterogeneity

variation of service from customer to customer