Foundations

Summary
This chapter starts by providing evidence of the growing importance of services in our society which was reinforced by recent technological and economic developments. Thereafter, a service definition is presented and discussed in detail to explain the basic principles of services. Concepts from operations management are used to describe services as transformation processes involving resources from both customer and provider. The last section contrasts services with goods and investigates the differences in marketing and management of these distinct economic commodities.

Review Questions
1. Beside the recent developments identified in this chapter, which enabled the dissemination of services in modern society, enumerate other developments which were relevant.

2. Describe the types of digital services the UK government is providing to its citizens.

3. Execute a web search to identify which service industries have a higher market share. Contrast the values found for US, EU, and Asia.

4. Explain how the division of work and labor, and the ownership of resources, are prerequisites for the edification of a service-based society.

5. Compile a list of five distinct definitions for the term service and highlight possible limitations when compared to the definition from Hill [8] adopted in Sect. 1.2.1 on page 10-11.

6. Provide four examples of services for each of the interaction types shown in Fig. 1.6 on page 14.

7. Can the model of interaction types shown in Fig. 1.6 be extended with additional scenarios? Give examples of services for the new scenarios you have identified.

8. Due to the inseparability of production and consumption, services cannot be “stored”. What techniques, methods, or tools can be used to manage the supply and demand of services more effectively?

9. How can crowdsourcing be used to match service supply and demand more efficiently? Describe two or three services, which could benefit from this sourcing model.

10. Identify and discuss how five well-known companies from various service industries could provide new services using servitization as a differentiating model?