All economies go through the stages of development like industrialization and post-industrialization

Industrialization: When an economy is developing initially the agricultural secto r is most important. But as income per capita rises, agriculture loses its primacy giving way to a rise of industrial sector and then to the service sector. As people’s incomes increase their demand for food reaches its natural limit and they begin to demand industrial goods. Agricultural products become less expensive, because the machines can be widely used in agriculture.

Postindustrialization: As incomes continue to rise people’s needs become less material and they begin to demand more services: health care, education, entertainment, tourism. Postindustrial economies are concerned with the quality of life as measured by health, education. Most service jobs can’t be filled by machines. It makes services more expensive relative to agricultural and industrial goods, further increasing their share in GDP. Employment in agricultural and industrial sector declines because of technical progress, but as the jobs in service can’t be made my machines, employment grows.

Most high-income countries today are postindustrializing - becoming less reliant/ dependent on industry, but most low-income countries are industrializing – becoming more reliant on industry.

In the early 1900s only 3 out of 10 workers in the United States were employed in the services sector. The remaining workers were active in agriculture and industry. By 1950 the employment in services accounted for 50 percent of the workforce. Today services employ about 8 out of every 10 workers. During the past 90 years we have witnessed a major evolution in our society from being predominantly manufacturing-based to being predominantly service-based.

But what is actually nature of service? It’s not easy to give a definition, what service is and how it differs from goods. Service is what a customer gets from the performance of people serving, when satisfying a need.

“Most authorities consider the services sector to include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser”. (James Brian Jordan)

How did the various alternatives differ? Why he had to pay more for the pizza in the restaurant?

Most modern business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point.[1] Most products fall between these two extremes. For example, a restaurant provides a physical good (the food), but also provides services in the form of ambience, the setting and clearing of the table, etc.

· In service the period between the demand by a customer and the supply is very short, sometimes immediate. For example, when a guest orders a meal in a restaurant he wants it to be cooked and served. The fast food industry is unique, because it satisfies a meal demand immediately. Toothpaste, a physical product on the one hand is produced in anticipation of demand, but month before the actual product is sold.

· In service the server is face-to-face with the customer when he/she demands a product. So that she has to understand the needs and satisfy. For example in a restaurant a client wants to get a meal without garlic. The server must respond that needs and instruct the cook. A product like Toothpaste is standardized and prepared, whether a customer wants fluoride or not.

· In service the product of service is consumed immediately. A meal is consumed immediately. A product like Toothpaste is used over many hours or days. Services can’t be stored for further consumption. A room in a hotel not occupied is lost forever, and it can’t be reused. Toothpastes can be stored for years and used when required.

· Services cannot be touched, handled, looked at, smelled, tasted.

· Services have little or no tangible components and therefore cannot be stored for a future use.

· Each service is unique. It is one-time generated, rendered and consumed and can never be exactly repeated as the point in time, location, circumstances, conditions, current configurations and/or assigned resources are different for the next delivery, even if the same service consumer requests the same service.

· Services are intangible and rely on the experience they produce unlike a product like toothpaste, which can be touched, seen and smelled to determine whether it is desirable or not. Experiences are very subjective and can vary from person to person. That is the reason why some people may find a restaurant wonderful to visit while others do not find it so.

· Services are provided by people and it’s difficult to standardize them. Restaurants have tried to standardize procedures and train staff. You can standardize the receipts, but not the attitude, which can be different from one day to another.

What are the consequences of these qualities of service?

The intangibility of service makes it difficult to evaluate it before and sometimes after purchase.

Дата добавления: 2014-10-22