Produce and offers goods and services in order to own profit as well as to fullfill the need and wants of the customers.

Goods - are tangible products that can be seen, touched and are capable of being delivered to a buyer.

Service – those intangible activities that provides satisfaction of wants, imply an interaction between the service provider and the customer.

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Characteristics of Services

High risk associated with services. It is difficult to evaluate service before

the experience. Service cannot be seen, tasted, felt,

heard, or smelled before purchase Companies should create memorable

guest experiences ‘Tangibilize’ the intangible

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By providing tangible evidence and image to customers for instances that some will offer trial that will provide clues to the customers of what to expect in the products

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To reduce or not to have the feelings of uncertainly in customers.

Giving the customer a service fulfilment

“Customer is always right.”

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• The customer becomes part of the service• Providers are part of the service experience

because providers and customers must be present simultaneously for the transaction to occur.

• Customers themselves may be part of the service experience because of their greater involvement in the production process.

• The presence of other customers may become part of the service experience.

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Because providers and customers are likely to be part of the service experience, it is important to recruit the RIGHT PEOPLE.

Providers should also try to manage their customer so that they do not cause dissatisfaction to others.› USA -> No kids are allowed policy › Philippines -> bouncers

“Moment of truth”10

Quality of services depends on who provides them and when, where, and how.

Quality control of service is difficult. Depends on employees (attitude, skill level,

experiences) Lack of consistency a major source of customer

disappointment. Guest expectations are different. Quality of services is likely to vary (i.e. lack of

consistency) because of the provider, location, timing,etc.

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Good hiring and training procedures are more likely to increase quality consistency in the hospitality industry.

“Good service makes the difference.”

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• Services cannot be stored for later sale or use.

• Change customer use pattern (Hourly, daily, seasonally)

• Services are not durable and only last for a short while; they cannot be stocked as inventory for future sales or use.

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Manage the demand and supply levels.› Use part time employee for non peak› Encourage the customer to participate in

the production process. Fast food chain USA -> require costumer to

fill their own beverage Discounts and promos

“It will not take long.”

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Consistency is one of the key factor in the success of a service business.

100% satisfaction guarantee Basically, this means that customers

receive the service they expect without unwanted surprises.

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“Managers do not control the quality of the product when the product is a service . . .The quality of the service is in a precarious state – it is in the hands of the service workers who ‘produce’ and deliver it.”

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