Chapter 1
Understanding the
Service Experience
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Chapter Objectives
• Introduce the basic differences between goods and
services.
• Highlight the importance of managing the customer's
overall service experience.
• Establish the importance of the service sector in the
global economy.
• Compare two organisation management models:
industrial and market-focused.
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Introduction
• Study the data of the World Factbook 2009. Which
two countries have the largest service industry
sectors?
• Past decades saw tremendous growth of employment
in service sector, customers involvement, marketfocused products, technology development etc.
• Goods industries change too - the intangible aspects
of products are becoming the key features that
differentiate the product in the marketplace.
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Worldwide GDP by Service Sector
COUNTRY
1. Hong Kong
2. Bahamas
3. West Bank
4. France
5. United States
6. Lebanon
7. Japan
8. Taiwan
9. United Kingdom
10. Cuba
%
92.3
90.0
81.0
78.9
76.9
76.2
75.4
75.2
75.0
74.8
COUNTRY
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
%
Belgium
Singapore
Denmark
Italy
Portugal
Germany
Australia
New Zealand
Canada
Poland
74.7
73.2
73.1
72.9
72.8
72.0
71.3
69.7
69.6
67.3
(Bureau of Economic Affairs , 2012)
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Goods or Services?
objects
Goods
devices
things
Products
deeds
Services
efforts
performances
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Scale of Market Entities
The scale that displays a range of products along
a continuum based on their tangibility ranging
from:
– Tangible dominant
• Goods that possess physical properties that can be felt,
tasted, and seen prior to the consumer’s purchase
decision
– Intangible dominant
• Services that lack the physical properties that can be
sensed by consumers prior to the purchase decision
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Scale of Market Entities
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(Khegay, 2013)
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(Khegay, 2013)
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(Khegay, 2013)
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Molecular Model
• A conceptual model of the relationship
between tangible and intangible components
of a firm’s operations.
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Molecular Model
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Molecular Model Task
Draw a molecular model of a KTV visit
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Benefit Concept
• Why do we prefer one product to another?
• Benefit concept: Encapsulation of benefits of
a product in the consumer’s mind
• Tide’s core benefit concept
– Might simply be Cleaning or a bundle of benefits
• Cleanliness
• Whiteness
• Motherhood
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Question
• What is the core benefit when we purchase
goods?
• How services deliver a bundle of benefits to
customers?
• In a service experience!
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Servuction Model
Servuction Model
A framework
for understanding
the consumer’s
experience
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Servuction Model
Other
Customer
Servicescape
Customer
Experience
Organizations
and Systems
Contact
Personnel/
Service
Providers
p.10
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1. The Servicescape
• The use of physical evidence to design service
environments
– Ambient conditions: room temperature and music
– Inanimate objects: furnishings and equipment
– Other physical evidence: signs, symbols, personal
things
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What would you think about the
restaurant which has a menu like this?
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2. Contact Personnel / Service Providers
Contact Personnel
• Employees other than the primary service
provider who briefly interact with the customer
Service Providers
• The primary providers of a core service
–
–
–
–
Waiter or waitress
Dentist
Physician
College instructor
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How would the waitress like this affect
your dining experience?
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3. Other Customers
• Customers that share the primary customer’s
service experience.
•The presence of other
customers can enhance or
detract from an individual’s
service experience.
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4. Organizations and Systems
• Invisible organization
and systems
– That part of a firm that
reflects the rules,
regulations, and
processes upon which the
organization is based
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Tasks
In pairs:
1. Create a servuction model of your classroom
experience.
2. Compare this model with experience of
visiting Sarah’s restaurant.
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Why Study Services?
1. The growth of the global service economy in
terms of contributions to Gross Domestic
Products (GDP)
2. The growth of the global service workforce
3. The emergence of technologically based eservices that have transformed many service
industries
4. The importance of developing sustainable
service marketing business practices
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References
• Bureau of Economic Affairs (2012). Retrieved
from https://www.bea.gov/industry/
• Sonya Khegay Protfolio (2013). Retrieved from
http://sonyakhegay.com/
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