How Can You Measure The Economic Importance Of The Food Service Industry?

The Service Economic system

The world economy is evolving into a service-driven economy as reliance on value-based service increases.

Learning Objective

Define the role of a service economy in developed and developing countries

Key Takeaways

Key Points

The growth of the service sector has long been considered as an indicator of a country's economic progress.
Services are continually being launched to satisfy our existing needs and to meet needs that we did non fifty-fifty know we had.
Service organizations can vary in size from big corporations to pocket-sized, locally endemic businesses.

Cardinal Terms

principal: The primary sector of the economy is the sector of an economy making straight use of natural resources.
secondary: The secondary sector of the economic system or industrial sector includes those economic sectors that create a finished, tangible production, such as product and construction.
Service: Activity or work that is produced, then traded, bought or sold, and then finally consumed.

Case

The way consumers handle fiscal transactions with banks, such as Hunt Bank in this paradigm has evolved as our needs as a guild take evolved. Xv years agone, no one would have predictable the need for online cyberbanking and yet today many of us feel we can't live without information technology. This is a service that has continually changed to satisfy existing needs.

The Service Economy

The earth economy is increasingly characterized as a service economy. This is primarily due to the increasing importance and share of the service sector in the economies of about adult and developing countries. In fact, the growth of the service sector has long been considered as an indicator of a country'southward economic progress. Economic history tells us that all developing nations accept invariably experienced a shift from agronomics to manufacture and so to the service sector every bit the mainstay of the economy. This shift has too brought nearly a change in the definition of goods and services themselves.

Service organizations vary widely in size. At 1 terminate of the scale are huge international corporations operating in such industries as airlines, banking, insurance, telecommunications, and hotels. At the other end of the calibration are a vast assortment of locally endemic and operated small businesses, such as restaurants, laundries, optometrists, beauty parlors, and numerous concern-to-business concern services.

The service sector is going through revolutionary alter, which dramatically affects the manner in which we live and work. New services are continually being launched to satisfy our existing needs and to meet needs that nosotros did not even know we had. Almost fifty years agone, when the starting time electronic file sharing system was created, few people likely predictable the future demand for online banking, website hosting, or email providers. Today, many of us experience we tin can't practise without them. Similar transformations are occurring in business organization-to-business organisation markets.

The Role Of the Service Economic system In Development

As of 2008, services constituted over 50% of Gdp in low income countries. Every bit their economies continue to develop, the importance of the service sector continues to grow. For instance, services accounted for 47% of economical growth in sub-Saharan Africa over the period 2000–2005, while industry just contributed 37% and agriculture only xvi% in that same menses. This means that recent economic growth in Africa relied as much on services as on natural resources or textiles, despite many of those countries benefiting from trade preferences in main and secondary appurtenances.

A Chase Bank building Banking Services: Most financial transactions inside a banking company can be done online. The service was not available 15 years ago.

As a result of these changes, people are leaving the agricultural sector to find work in the service economy. This job creation is especially useful as oft it provides employment for unskilled workers in the tourism and retail sectors, which benefits the poor and represents an overall net increase in employment. The service economic system in developing countries is most ofttimes made upwards of the following industries: financial services, tourism, distribution, health, and instruction.

Services as Solutions

Firms need to empathise their service and their customers to ensure that their services will exist viewed equally solutions to consumer needs.

Learning Objective

Demonstrate knowledge of the skills required to sell services equally solutions to customers and prospects

Key Takeaways

Central Points

If you lot desire customers to purchase your services, you need offering them a solution that costs less than the problem is costing them.
No customer will renew a subscription service or purchase more than consulting services if they don't run across genuine value in these services as it relates to fulfilling their concern objectives.
Selling services as solutions is different from solution selling considering instead of defining the solution and then looking for applicable bug, you are tailoring your services to fit your prospective customer'due south day-to-mean solar day problems.

Cardinal Term

value: a customer'southward perception of relative price (the price to own and use) and functioning (quality)

Instance

The use of technological advances in service and product offerings can be very beneficial to a company. For case, Visa has embedded security chips, such equally the one displayed in this motion picture, into their Visa credit cards. This chip will ensure the menu cannot be duplicated and provides extra security measures to consumers who use the credit cards and reduces the threat of identity theft. Applying this technology is but one of the many services Visa can implement to protect their consumer product offerings against identity theft. It may not exist the only solution, simply information technology is a fairly effective ane. Visa was able to change their marketing strategy due to the irresolute nature of the environment.

If you want customers to buy your services, you need offer them a solution that costs less than the problem is costing them. Your solution might:

Save your customer coin;
Save your customer time: or
Ameliorate your customer's productivity.

This is unlike from solution selling because instead of defining the solution and and then looking for applicable issues, you lot are tailoring your services to fit your prospective customer's solar day-to-24-hour interval issues. In essence, you lot are in the trouble-solving business concern and if you can show that you can solve your client's present problems, you'll have a long-term customer who volition come back for more and more.

In guild to attain this chore you, and anyone involved in selling your services, demand to:

Have an excellent understanding of the services you're offering and what can and can't exist tailored to a customer's requirement;
Have an solid understanding of the mutual problems your prospects face and those that your services can solve; and
Prepare 20-25 questions to identify possible bug and generate brownie and confidence in your company'south abilities.

Selling Services As Solutions

An illustration called Budgets: Services have to be priced fairly in order to attract customers. People aren't willing to pay for services that are too expensive or that they do not demand.

Without genuinely valuable services for your client, y'all accept no revenue. While "what'southward the value proffer? " is an over-used term, below is a more specific definition of value, particularly as it applies to application software (in dissimilarity with infrastructure software).

It's nearly selling a meaningful solution package

When selling services rather than technology, the focus should exist on people and organizations—listening to and understanding their internal projects, and being considerate of their timelines and budgets. It is of import to listen and provide a fair offer for services that genuinely run across a customer'due south need. Budgets are much too constrained these days for anyone to buy services they don't really need. This model tin be a skilful foundation for a company, leading to a sustainable revenue stream that tin can help to further fund the development of the product.

In other words, create acquirement that tin sustain and abound the business concern, to make the product ameliorate in the long run, and to enable customers to improve deploy the software. This but happens if the software and the services provide real value to an organization.

It'southward nigh customer engagement

Years ago, the Red Hat Network offered a valuable service for those who purchased a software subscription. If yous passively wait for the renewal, you tin expect that some customers will inquire themselves, "Do we use this subscription service or not? Practice we really need to keep to pay for it? " A proactive approach in this scenario is to demonstrate ongoing value by regular client date, showing the customer new features they can access via their subscription, reviewing their current employ of the product, and offering add-on services to help them be better trained or improve able to employ more of the product for more of their organization.

The fundamental principle here is value. No customer will renew a subscription service or buy more consulting services if they don't see genuine value in these services equally it relates to fulfilling their business organisation objectives, whether that be better customer service, better IT responsiveness, or improve IT direction.

Services every bit Products

Services represent an integral part of many products and the correlation of appurtenances and services is represented on a appurtenances-services continuum.

Learning Objective

Describe the characteristics of service products

Key Takeaways

Key Points

Services can be products that are both tangible and intangible. Typically, the dominant form will classify the product as a practiced or as a service.
Many theorists see a continuum with pure services on ane end and pure article goods on the other. Most products autumn between these ii extremes.
Service products are ofttimes hard to identify, because they come up into existence at the same fourth dimension that they are bought and consumed.

Cardinal Terms

tangible: Touchable; able to exist touched or felt; perceptible by the sense of touch; palpable.

intangible: Incapable of being perceived past the senses.

Example

A taxi service is a service that is tangible. Taxi drivers, such as the one in the image, provide both the proficient (a machine), which provides the means of travel, as well as the human action of driving to a place – which is measurable and substantially a service. Therefore a taxi cab driver provides both a good and a service, so he is providing a product.

Services As Products

The increasing importance of the service market in the economy has brought about a change in the definition of goods and services. No longer are goods considered separate from services. Rather, services at present increasingly represent an integral role of the product. It is this interconnectedness between appurtenances and services that is represented on a appurtenances-services continuum.

Services tin can be alternatively defined as products, such as a bank loan or a home security, that are to some extent intangible. If totally intangible, they are exchanged directly from the producer to the user, cannot be transported or stored, and are almost instantly perishable.

Service products are often difficult to identify, because they come into beingness at the same time that they are bought and consumed. They contain intangible elements that are inseparable; they usually involve client participation in some important mode; they cannot be sold in the sense of ownership transfer; and they take no title. Today, however, about products are partly tangible and partly intangible, so the dominant form is to allocate them as either goods or services (all are products).

Taxi Services: A taxi cab driver provides both a proficient and a service, so he provides a product.

The dichotomy between physical appurtenances and intangible services should not be given too much credence. These are non discrete categories. Most business organisation theorists see a continuum with pure services on i terminal point and pure commodity appurtenances on the other terminal point. Most products fall between these two extremes. For example, a restaurant provides a physical good (the food), but also provides service in the form of ambiance, the cooking and the serving of the food, and the setting and the clearing of the table. And although some utilities actually deliver physical goods — like water utilities which actually deliver water — utilities are unremarkably treated as services.

Service Marketing Management and Metrics

Service marketing management oversees the implementation of marketing programs, while metrics measure their effectiveness and operation.

Learning Objective

Explicate how marketing direction and metrics allow service organizations to implement and measure out their marketing strategy

Key Takeaways

Key Points

To create an effective, cost-efficient marketing direction strategy, firms must possess a detailed, objective understanding of their own concern and the market in which they operate.
After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the visitor, product, service or brand has been determined, marketing managers focus on how to best implement the chosen strategy.
Marketing management often makes use of various organizational control systems to ensure marketing programs achieve desired objectives, and do and then in a cost effective manner.
It is the responsibility of marketing managers to ensure that the execution of marketing programs achieves the desired objectives in a price-efficient manner.
Mutual service marketing metrics include net sales billed, number of product or pattern registrations, brand surveys to measure out brand awareness, return on the investment, and website hits.

Primal Terms

Marketing Management: Marketing direction is a business organisation field of study which is focused on the practical awarding of marketing techniques and the management of a firm's marketing resources and activities

value-chain: The value chain categorizes the generic value-adding activities of an system.

marketing strategy: a process that tin can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive reward

Service Marketing Management & Metrics

Marketing management is a concern bailiwick which is focused on the applied application of marketing techniques and the management of a firm's marketing resources and activities. Rapid globalization has led service providers to market across the borders of their home countries, making marketing management and metrics and integral office of implementing and measuring an effective marketing strategy.

Service Marketing Management

To create an effective, cost-efficient marketing direction strategy, firms must possess a detailed, objective understanding of their own business organization and the marketplace in which they operate. In analyzing these issues, the subject area of marketing management often overlaps with the related subject of strategic planning.

After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the company, product, service or brand has been adamant, marketing managers focus on how to all-time implement the chosen strategy. Traditionally, this has involved implementation planning beyond the "4 Ps" of marketing: product (or service) direction, pricing , place and Promotion. A new P has been added making information technology a total of five P's. The fifth P is politics, which affects service marketing in a significant style.

Part of a service marketing manager's job is analyzing external influences and current marketing weather that are direct or indirectly impacting the business concern. Tasks for marketing management may include conducting a competitor and value chain analysis, putting together a brand audit, and assembling qualitative and quantitative enquiry. This research, along with an assessment of the business organisation' own strengths and weaknesses, go into a marketing program used to launch futurity marketing programs and initiatives. Overseeing the successful evolution and execution of the marketing programme falls under service marketing management roles.

Marketing Operation Metrics

Marketing direction employs a variety of metrics to measure out progress against objectives. It is the responsibleness of marketing managers--in the marketing section or elsewhere--to ensure that the execution of marketing programs achieves the desired objectives in a price-efficient way. Marketing direction therefore often makes use of various organizational control systems, such as sales forecasts, sales force and seller incentive programs, sales force management systems, and client human relationship direction tools (CRM).

The marketing metrics continuum, shown here , provides a good framework for categorizing metrics. Metrics enable marketing professionals to justify budgets based on returns and to drive organizational growth and innovation. Some common metrics used to mensurate performance include atomic number 82 to conversion charge per unit, click-through rate and number of new opportunities (i.e., new business concern deals). Other elements of measurement include net sales billed, number of product or pattern registrations, make surveys to measure brand sensation, the render on the investment, and website hits. Numeric data for these metrics tin can come up from a variety of sources such every bit the service provider's website, and industry merchandise show, or word-of-mouth marketing. Marketers use these metrics and performance measurement as way to prove value and demonstrate the contribution of marketing to the organization.

Marketing Metrics Continuum: The Marketing Metrics Continuum provides a framework for categorizing metrics from tactical to strategic.

The Marketing Metrics Continuum categorizes metrics (action-based, operational, result-based, leading indicators, and predictive) and looks at counting, efficiency, business outcome, and likelihood of issue.

New Service Evolution

The new service development process involves recognizing chances and opportunities in a fast changing technological surround.

Learning Objective

Discuss the activities involved in developing new service opportunities

Key Takeaways

Fundamental Points

New service evolution concerns all the activities involved in realizing new service opportunities, including product or service design, business model pattern, and marketing.
Service development is generally seen as growing an enterprise through a number of marketing techniques. The two master questions necessary to this arroyo are: How do we notice, attain, and approach customers? How do we keep these customers satisfied with new possible services?
Innovative technology provides important opportunities for new service development. For a company to stay competitive, it is of import to proceed services and processes upward to date.

Key Term

Contingency Theory: Contingency theory is a class of behavioral theory that claims that there is no best way to organize a corporation, to lead a company, or to brand decisions. Instead, the optimal course of action is contingent upon the internal and external situation.

New service development concerns all the activities involved in realizing new service opportunities, including product or service design, business model design, and marketing.

When splitting service development into ii parts, we have "service" and "development. " The starting time things that come into mind when looking at service are: economics, finance, managerial activities, competition, prices, and marketing. All of these keywords are related to chance and entrepreneurship and clearly indicate the chief scope of the term "service development. "

Evolution is very abstruse and tin be linked with some of the following keywords: technological improvement, cost reduction, general welfare, improved relations, and move in a positive direction. Service development is by and large seen as growing an enterprise through a number of techniques. The mentioned techniques differ, but in fact all of them are about traditional marketing. The two main questions necessary to this approach are: How do we observe, reach, and approach customers? How do we keep these customers satisfied with new possible services?

When supplying a solution, it is important to focus on the total offering you give instead of just focusing on the product or service. An offering is a package consisting of dissimilar proportions of a physical production, service, advice, delivery, and the costs.

Cartoon on contingency theory, an idea cardinal to new service evolution is that dissimilar service, market place, and technology combinations can crave dissimilar marketing strategies and business models to make them a success. To chart the factors that are involved and create synergy between them, new service development draws heavily upon the fields of technology and business networks. The new service development procedure involves recognizing chances and opportunities in a fast changing technological environment. For example, machine manufacturers should recognize that rise gas prices are an opportunity to create fuel efficient cars.

A man and woman ride bicycles in traffic. Economic Transportation: As gas prices increase, nosotros see less cars on the route. People turn to alternating modes of transportation including taxis, public transportation, and bikes.

Economical Transportation

Innovative technology provides of import opportunities for new service development. For a company to stay competitive, it is important to proceed services and processes upwards to date. Continuous investment in innovation for both services and processes makes it more hard for others to gain a large technological functionality advantage. Technological evolution tin can occur through making decisions nigh acquiring, exploiting, and managing technologies. These decisions should be made by involving the enquiry and development staff, purchasing staff, and marketers.

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