An Introduction in Service Sector

• World wide GNP: over 58%

• Services account for:
• USA
• over 70% of GDP
• Japan
• over 58% of GDP
• European Community
• over 60% of GDP
• Hong Kong
• over 85% of GDP on average
Sectoral Employment (Q.1 2001)
Manufacturing Services (%)
(%)

Japan 20.5 64.2

Republic of 20.5 64
Korea

USA 13.4 78.8

HK 6.6 83.3
Hong Kong’s Economic
Achievement
• The world’s freest economy
• The world’s most service-oriented economy
• The world’s 2nd highest per capita holding of
foreign currency
• The 2nd largest source of outward foreign direct
investment in Asia
• The world’s 7th largest foreign exchange centre
and has a daily turnover of US $80 billion
(Sources: www.tdc.org.hk; The Servicing Economy)
 From Old Economy to New Economy
• Old economy: wholesaling, retailing, trading
– employment: over 30% of labor force
– rate of increase in salary compared with 1992:
10%
• New economy: finance, insurance, computer
– employment: below 15% of labor force
– rate of increase in salary compared with 1992:
15.6%
• 1st quarter in 2000:
– financial industry: grow by 136.8%
– trading: grow by 11.5%
 Some Quotations about Services
Marketing
• “Everyone has become better at developing
products. The one place you can differentiate
yourself is in the service you provide.”
(Henkoff cites an US CEO, 1994)
• “In most industries, providing quality service
is no longer simply an option. The quick pace
of developing technologies and increasing
competition make it difficult to gain strategic
competitive advantages through physical
products alone.” (Zeithaml and Bitner, 2000)
Service Characteristics
• Heterogeneity
– difficult to achieve standardization of
output in services
• Intangibility
– performances and experiences, depends
on consumers’ judgments
– “anything that you cannot drop on your
foot”
• Inseparability
– simultaneous production and
consumption of service
• Perishability
– services cannot be saved
 P’s Issues in Services
•Product
•Price
•Place
•Promotion
•People
•Process
•Physical Evidence
They all influence customers’ initial purchase
decision, the level of satisfaction and
repurchase decision.
How to Deliver Quality Services
Consistently?

• The Gaps Model of Services

Quality will be adopted and
discussed