The document discusses managing services and their importance in the US economy. It notes that around 90% of new jobs are in the services sector, which accounted for over $4 trillion in 1998. Services make up a large part of the US GDP, growing from around 30% in 1970 to over 70% by 1998. The document also discusses characteristics of services like intangibility, inconsistency, inseparability from delivery, and different inventory costs compared to goods.

1. Product and Pricing Management MANAGING SERVICES

3. Importance of Services in the U.S. Gross Domestic Product 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 GDP Services Goods 1970 1975 1980 1985 1990 1995 1998 Billions of dollars

7. Inventory Carrying Costs of Services hotel restaurant Low Cost Cost of Inventory High Cost Hair Salon Real Estate Employment agency Insurance company auto repair dry cleaner Amusement park Utility Airline Hospital

8. Service Continuum Teaching Nursing The theatre Advertising agency Air travel Television Fast-food restaurant Tailored suit Automobile House Dog food Necktie Salt Balanced item equally weighed between goods and services Service-dominated item (intangible) Good-dominated item (tangible) Balanced

12. How Consumers Evaluate Goods and Services Most goods Easy to evaluate Most services Difficult to evaluate High in credence properties High in experience properties High in search properties Clothing Jewelry Furniture Houses Automobiles Restaurant meals Vacation Haircuts Child care Television repair Legal services Root canal Auto repair Medical diagnosis

13. Dimensions of service quality

14. Customer Contact in car rental Green shaded boxes indicate customer activity . 1. Customer contacts rental company 3. Customer arrives 4. Receive customer information 6. Customer takes bus to care and departs 7. Customer returns car to receiving lot 8. Customer checks in 9. Receive customer information 10. Customer receives bill Access reservation system 2. Receive customer information 5. Assign car A. Preliminary inspection B. Secondary inspection C. Perform periodic maintenance D. Preparation and park in ready lot E. Update car status in reservation system

19. Managing Capacity in a Hotel Executive service guests* Executive service guests* Transient guests † Transient guests † Weekend package Weekend package Groups and conventions Groups (no conventions) Airline contracts Airline contracts M Tu W Th F S Sn M Tu W Th F S Sn Time Week 7(low season) Week 36 (high season) Nights: Out of commission for renovation 100% 50% Time capacity (percent of rooms) * Employees of corporations called upon by salesforce (book rooms through special reservations line). † Customers reserving rooms via public telephone number or by just “walking in.”

24. IRS E File Advertisement