Services

Services

1. Why?

   • Account for 60% of GDP worldwide
   • New employment is provided by services
   • Strongest growth area for marketing
   • All economies have a substancial service sector

2. Transformation Causes (Good Saul, BAI)

   • Goverment policies (4)
     • W/ CHANGES IN REGULATIONS, PRIVATIZATION, NEW RULES to protect customers, employees and the environment and NEW AGREEMENTS ON TRADE
       • It has to do with rules and treaties
   • Social changes
     • RISING EXPECTATIONS of customers, MORE MONEY, MORE PEOPLE SHORT OF TIME, MORE DESIRE to buy experiences vs. things
     • RISING OWNERSHIP of HIGH TECH EQUIPMENT, MORE ACCESS TO INFORMATION, IMMIGRATION, AGING POPULATION
   • Business trends
     • Push to INCREASE SHAREHOLDER VALUE, emphasis on PRODUCTIVITY AND COST SAVINGS, ADDS VALUE, MORE STRATEGIC ALLIANCES,
       • Focus on QUALITY AND CUSTOMER SATISFACTION, growth of FRANCHISING, MARKETING EMPHASIS by non profits
   • Advances in IT
     • GROWTH OF INTERNET, GREATER BANDWIDTH, COMPACT MOBILE EQUIPMENT, WIRELESS NETWORKING, FASTER SOFTWARE, DIGITALIZATION
   • Internationalization/ Globalization (5)
     • More companies operating on TRANSNATIONAL basis, more INTERNATIONAL travel, INTERNATIONAL MERGERS AND ALLIANCES, OFFSHORING of customer service, FOREIGN COMPETITORS
       • 3 NATIONALS, offshoring and competitors

3. 7 P'S

   • PRODUCT, PLACE, PROMOTION, PRICE, PROCESS, PEOPLE, PHYSICAL ENVIRONMENT

4. Classification of Services

   • People Processing (TANGIBLE/PEOPLE)
   • Possesion processing(TANGIBLE/POSSESIONS)
   • Mental stimulus processing (INTANGIBLE/PEOPLE)
   • Information Processing (INTANGIBLE/POSSESIONS)

5. LATAM

   • last 15 years, 3% GDP
     • Lots of physical work
   • Reasons why it will grow less
     • Falling fertility
     • End of commodity price boom
     • Risk of increased protectionism

6. GATS

   • How can capabilities be accessed?
     • Through cross-border communications in which neither the producer nor the consumer moves
     • Through the movement of a consumer to a supplier's country
     • Through the movement of a commercial organization to the consumer's country
     • Through the movement of an individual service supplier tob the consumer's country of residence
   • Advantages
     • Inputs, location or geographical advantage