Quarter 2 Service Industry
Training week 1: defning services to service industry (Chapter 1)
Service Industry
The service sector has been growing at an annual rate of 8% in recent years
The service sector dominates with the best jobs, best talent and best incomes
Driving forces:
increasing consumer incomes and sociological and demographic changes increase in
demand for services
increasing professionalism in companies and technological developments/changes
have brought about the creaton of new services, notably of producer services (telecom,
software, apps)
Industry division in sectors
Primary: farming, forestry and fshing
Secondary: industrial sector: gas, mining, manufacturing, electricity, water and
constructon
Tertary: service sector
Aumni: people that already did the IB program
, service sector highest!!
Europe has highest labour force for services!!
Vietnam has highest labour force for agriculture!!
Categories of services
Distributive: transportaton, communicaton and trade
Producer: investment banking, insurance engineering, accountng, bookkeeping and legal
services
Social: health care, educaton, non-proft organizatons and government agencies
Personal services: include tourism, dry cleaning, recreatonal services and domestc services
Wedding proposal agency: intangible not a service
,Defning services
doesn’t result in ownership
intangible
interacton between service provider (employee) and consumer
Methods of classifying services
Degree of Intangibility: the higher the intangibility, the more difcultes customer
experience when evaluatng the ofering. They cannot be stored and are also difcult
to standardize, making their quality much more dependent on the employee
providing the partcular service
Degree of customer contact required: both customer and employee need to be
competent and communicatve, it becomes even more important to select and train
employees that ft the criteria in order to perform their jobs
Degree of simultaneity: producton and consumpton can occur simultaneously
without the customer being present
Degree of heterogeneity: both employee and the customer are a source of
heterogeneity. Standardizing the operatng system might reduce its heterogeneity
Degree of perishability: the lower the goods component in the ofering and the
more consumpton and producton overlap, the higher degree of perishability. These
oferings cannot be stored.
Degree of demand fuctuation over time: The more demand fuctuates, the more
capacity management becomes important
Degree of service customization: the service provider can trailer the needs of the
customer
Degree of labour intensity: Managers in low labour-intensive service businesses
have to think of capital decisions, technological advances and capacity management
, Service direction (towards people or equipment): personal service, hotels,
restaurants and schools are services where the recipients of the service are people,
while freight transportaton, accountng and laundry services are aimed at tangible
objects or intangible items
Maister’s framework: combining the degree of contact with the degree of customization
Pharmacist: customers wants the service to be delivered according to strict technical
standard at minimal cost standardized processes with a limited degree of customer
contact
Nurses: share with pharmacists the high degree of standardizaton that this category implies
in terms of well-established and familiar service. However, the degree of customer contact
here needs to be considerable to obtain customer satsfacton. .ey skill: making client
experience comfortable and user-friendly in going through pre set process
Brain surgeon: high degree of customizaton, creatvity and even innovaton, involves rather
low levels of customer interacton. For example, lawyers,… tax specialists
Psychotherapist: combines these professional skills with a high degree of customer
interacton, key skill: real tme, diagnosis of complex, ill-specifed problems
Characteristics of services
Intangibility
Heterogeneity
Simultaneity
Perishability
Training week 1: defning services to service industry (Chapter 1)
Service Industry
The service sector has been growing at an annual rate of 8% in recent years
The service sector dominates with the best jobs, best talent and best incomes
Driving forces:
increasing consumer incomes and sociological and demographic changes increase in
demand for services
increasing professionalism in companies and technological developments/changes
have brought about the creaton of new services, notably of producer services (telecom,
software, apps)
Industry division in sectors
Primary: farming, forestry and fshing
Secondary: industrial sector: gas, mining, manufacturing, electricity, water and
constructon
Tertary: service sector
Aumni: people that already did the IB program
, service sector highest!!
Europe has highest labour force for services!!
Vietnam has highest labour force for agriculture!!
Categories of services
Distributive: transportaton, communicaton and trade
Producer: investment banking, insurance engineering, accountng, bookkeeping and legal
services
Social: health care, educaton, non-proft organizatons and government agencies
Personal services: include tourism, dry cleaning, recreatonal services and domestc services
Wedding proposal agency: intangible not a service
,Defning services
doesn’t result in ownership
intangible
interacton between service provider (employee) and consumer
Methods of classifying services
Degree of Intangibility: the higher the intangibility, the more difcultes customer
experience when evaluatng the ofering. They cannot be stored and are also difcult
to standardize, making their quality much more dependent on the employee
providing the partcular service
Degree of customer contact required: both customer and employee need to be
competent and communicatve, it becomes even more important to select and train
employees that ft the criteria in order to perform their jobs
Degree of simultaneity: producton and consumpton can occur simultaneously
without the customer being present
Degree of heterogeneity: both employee and the customer are a source of
heterogeneity. Standardizing the operatng system might reduce its heterogeneity
Degree of perishability: the lower the goods component in the ofering and the
more consumpton and producton overlap, the higher degree of perishability. These
oferings cannot be stored.
Degree of demand fuctuation over time: The more demand fuctuates, the more
capacity management becomes important
Degree of service customization: the service provider can trailer the needs of the
customer
Degree of labour intensity: Managers in low labour-intensive service businesses
have to think of capital decisions, technological advances and capacity management
, Service direction (towards people or equipment): personal service, hotels,
restaurants and schools are services where the recipients of the service are people,
while freight transportaton, accountng and laundry services are aimed at tangible
objects or intangible items
Maister’s framework: combining the degree of contact with the degree of customization
Pharmacist: customers wants the service to be delivered according to strict technical
standard at minimal cost standardized processes with a limited degree of customer
contact
Nurses: share with pharmacists the high degree of standardizaton that this category implies
in terms of well-established and familiar service. However, the degree of customer contact
here needs to be considerable to obtain customer satsfacton. .ey skill: making client
experience comfortable and user-friendly in going through pre set process
Brain surgeon: high degree of customizaton, creatvity and even innovaton, involves rather
low levels of customer interacton. For example, lawyers,… tax specialists
Psychotherapist: combines these professional skills with a high degree of customer
interacton, key skill: real tme, diagnosis of complex, ill-specifed problems
Characteristics of services
Intangibility
Heterogeneity
Simultaneity
Perishability
