Submitted by: Submitted by ermiraballa23
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Category: Business and Industry
Date Submitted: 01/21/2012 08:06 AM
As the U.S. economy has changed from a goods producer to a service provider, the predominance of the manufacturing sector has declined substantially over the last fifty years. Today, only about 12 percent of U.S. workers are employed in manufacturing.[377] Most of us now hold jobs in the service sector, which accounts for 77 percent of U.S. gross domestic product.[378] Wal-Mart is now America’s largest employer, followed by McDonald’s and United Parcel Service (UPS). Not until we drop down to the fourth-largest employer—General Motors—do we find a manufacturing company.
Figure 11.9.
Wal-Mart employs more than a million people in the United States.
Though the primary function of both manufacturers and service providers is to satisfy customer needs, there are several important differences between the two types of operations. Let’s focus on three of them:
Intangibility. Manufacturers produce tangible products—things that can be touched or handled, such as automobiles and appliances. Service companies provide intangible products, such as banking, entertainment, or education.
Customization. Manufactured goods are generally standardized; one twelve-ounce bottle of Pepsi is the same as any other twelve-ounce bottle of Pepsi. Services, by contrast, are often customized to satisfy the specific needs of a customer. When you go to the barber or the hairdresser, you ask for a haircut that looks good on you because of the shape of your face and the texture of your hair. When you go to the dentist, you ask him or her to fill or pull the tooth that’s bothering you.
Customer contact. You could spend your entire working life assembling cars in Detroit and never meet a customer who bought a car that you helped to make. But if you were a waitress, you’d interact with customers every day. In fact, their satisfaction with your product would be determined in part by the service that you provided. Unlike manufactured goods, many services are bought and consumed at the...