CHAPTER ONE INTRODUCTION 1.1     BACKGROUND OF THE STUDY

Service industry has contributed a lot in development of many developing countries which Nigeria is not exempted. The service industry is an important component of any country’s economy. It makes a direct and significant contribution to GDP, creation of employment, and provides crucial inputs for the rest of the economy, having a significant effect on the overall investment climate, which is an essential determinant of growth and development. Some service sectors, such as the health, education, water, sanitation sectors etc, are also directly relevant to achieving societal developmental objectives.

Within the rapidly changing business environment, there has been a resurgence of interest among marketing researchers regarding the role of innovation in gaining competitive advantage; the literature to date has focused on manufacturing innovation. However, services innovation literature has grown significantly over the last decade, reflecting the increase contrition of services industries to the national economy. But the limited literature on new service development (NSD) remains fragmented.

The majority of NSD research has concentrated on the financial service sectors and one of the largest industries worldwide, the hospitality industry, has not been specifically investigated. Success factor for new services are in general similar to those for new product development, only the potency of the factors differ (copper and de Brentani, 1991). This can be explained by the nature of service, which are tangible, heterogeneous, perishable, and where production and consumption are inseparable (Zeithaml and Bitner, 2000).

The success rate of new service project is on average 58% (Griffin, 1997). In other words, four out of the ten new services fail in the market placed. The empirical studies, which have investigated the success factors at the result of managing one of two activities very well. It is the result of the holistic approach, managing several aspects competently and in a balance manner (Johne and Storey, 1998). The critical dimensions that influence new service performance can be categorized into four dusters (1) product – related (2) market – related (3) company – related, and (4) process- related, (de Brentani, 1999).

Although, fundamental changes have occurred in the structure of most countries economics since the second World War with service becoming the major sector economic activity. The USA was the first service oriented nation. At the beginning of the 1990s, fewer than 30% of workers in the United States were employed in services compare to 40% agriculture while in Nigeria the case in different. However, 55% o the working population was employed in services 1929, an approximately 54% of GNP was generated by services (Zeithaml and Bitner, 1996). Service employment in the US to over 66% by 1980, the trend in Europe was slower, through by 1977, 52% of employment in the EEC was in the tertiary sector (Gershuney an Miles 1983).

In terms of the creation of new employment, since 1969 services have accounted for 80% of all new jobs in Nigeria and over 75% of GNP (Kotler et al, 1995).

During the recent years the competitive environment has become very tough and demanding. At the same time the  general pace of doing things has accelerate tremendously main due to technological innovations such as interest e- mail, mobile phones, etc. all these general change in our society gives us a good motives to develop more flexible and quickly applicable approaches to offering development. However, one should remember that flexibility and speed in offering development is  an assets only if final outcome of that process is perceived as something superior compared with what has been by the end – users. Clear danger that are use more energy for developing our development process than product and services themselves.

1.2     STATEMENT OF PROBLEM

Having discuss the important and contribution of services industry in the development of economic of Nigeria, there are many problems associated with the achievement which include inadequate capital resources for the development process and for meaningful economic growth, lack  of managerial skill, political problem, misuse of fund, administrative problem, technical problem, problem of maintenance etc.

Inadequate capital resource is the major problem of every service industry. Both public and private service industry encounter difficulties in finding the industry from many financial institutions or the government, causing low turn up in the aspect of technology and other equipment for smooth running of the industry as well as payment of wages and salary. Lack of managerial skill arises from the limited knowledge and ability to control the resource of the industry. Political problem emanated from the government through office holder of the particular sector that normally divert the money provided for funding the industry to their private fund. Misuse of fund is common in every individual’s life, some manages do not make proper use of money provided for smooth running of the industry. Technical problem is another important problem faced by service industry because many of the managers lack the knowledge of technical skill, while where are neither illiterate or do not passed through appropriate training, which make difficult for them to excel in that particular industry. Problem of maintenance is also common in Nigeria for development of the economy, this is the fact that many projects executed by the government or private organization for economic development of the nation are always abandon after commissioning, instead of putting it for appropriate use. Identification of major problem to the service industry for economic development of Nigeria. Security is also a problem to the study.

1.3     OBJECTIVE OF THE STUDY

The objectives of carrying out this research study are as follows:

(i)      To find out strategies at which service operators can significantly satisfy the consumers.

(ii)     To gain market share among other competitors.

1.4     SIGNIFICANCE OF THE STUDY

Service industry play important role in development of Nigeria economy in different ways:

The service industry accounts for a significant proportion of GDP in Nigeria frequently generate over 50% of GDP in the economy of Nigeria. The study also provide enabling environment for employment opportunity Nigerian citizens. The study paves way for foreign investors to come and invest in different service sectors in Nigeria increasing the national income as well as boosting the economy. The research work is also relevant to government for international trade and shock exchange market. It is important to researchers who may come across the research work. The study is very important business organizations and the three arms of government in terms of budgeting.

  1.5   RESEARCH QUESTIONS

(i)      Does service industry play any significant role in         economic    development of Nigeria?

(ii)     Does service industry satisfy their consumers in Nigeria?

(iii)    Does service industry guarantee the economic development of Nigeria?

(iv)    Does service industry significantly improve the economic development of Nigeria?

  1.6   RESEARCH HYPOTHESIS

H0:    Service industry do not play significant role in the economic development of Nigeria.

H1:    Service industry play a significant role in economic      development of Nigeria.

H02:  Service industry do not guarantee the satisfaction of their customer.

H12:  Service industry guarantees the satisfaction of their customer.

H03:  Service industry do not guarantee the economic development of Nigeria.

H13:  Service industry guarantees the economic development of Nigeria.

H04:  Service industry do not significantly improve the economic development of Nigeria.

H14:  Service industry significantly improve the economic development of Nigeria.

H05:  Service industry do not significantly boost the economy of Nigeria.

H15:  Service industry significantly boost the economy of Nigeria.

1.7     SCOPE OF THE STUDY

The scope of the study shall cover the selected service industry in Port Harcourt such as MTN Nigeria Limited, Eco Bank Plc and PhCED, to investigate the significance of service industry in Nigeria.

1.8     LIMITATION OF THE STUDY

The major limitation of this study lies in the methodology to be adopted. The empirical analysis would be based on the opinions of the respondents which might have some element of bias and as much as such, the reliability for the results of analysis may not be completely dependable. Besides, it would be difficult to get respondents to give accurate information about the study. Finance is another limitation of the study, since the researcher may not have the money to go to different places in search of more information. Time constraint is also a limitation to the study, due to the research does not have enough time to bource for information because of combination of class works and other school activities

1.9     DEFINITION OF TERMS

EVOLVE: This can be define as a gradual process of developing something.

SIGNIFICANCE: The importance of something, especially when it has to do with an effect on what happens in the future.

SERVICE: Is a type of economic activity that is intangible, is not stored and does not result in ownership. It is also a system that provides something that the public needs, organized by the government or private company.

INDUSTRY: According to oxford advanced learner’s dictionary define industry as the production of goods from raw materials, especially in factories.

ECONOMIC: This is connected with the trade, industry and development of wealth of a country, an area or a society.

DEVELOPMENT: It is the gradual growth of something so that it becomes more advanced, stronger etc.