OM Present at In (the Service Concept)

8/6/2019 OM Present at In (the Service Concept)

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Group Members:yAnum Khan

y Mohsin Abbas

y Tahir Iqbaly Zaheer Abbas

y Doda Rasheed

y Muhammad Imran


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INTRODUCTION

y In designing a new service or redesigning an existing

service, managers and designers must make decisionsabout each component of the service.

y The large number and wide variety of decisionsrequired to design and deliver a service are made at

several levels in the organizationfrom the strategiclevel to the operational and service encounter levels.


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IntroductionyA major challenge for service organizations is ensuring

that decisions at each of these levels are made

consistently, focused on delivering the correct serviceto targeted customers.

y Before, during, and after service delivery, serviceorganizations set customer expectations. These

expectations relate to the nature of the servicepackage, as well as to the nature, duration, andcustomer flexibility during the service encounter.


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Introductiony We provide three levels of discussion in relation to the

service concept.

y First, we define the service concept and how it drivesdesign decisions for new and redesigned services.

y Second, we describe how the service concept is usefulat the operational level during service design planning

y Third, service recovery, one component of servicedesign, is used to show the usefulness of applying theservice concept in designing and enhancing serviceencounter interactions.


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NEW SERVICEDEVELOPMENTy The most recent of the terms is new service

development (NSD) and there appears to be some

degree of agreement about its meaning. NSD is theoverall process of developing new service offeringsand is concerned with the complete set of stages fromidea to launch.


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INTRODUCTIONy NSD has become important competitive concern.

y Services dominate most developed economies

y Service firms report that 24.1% of revenues came fromnew services introduced in previous years

y 21.7% of company profits are derived from these newservices


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Why new services needed?y Globalization of services

y New technological progress

- information and communication technology


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The NSD process cycle


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New service development

performance andantecedents Time, cost and quality (e.g. the features and

characteristics of the service offering) are typically

viewed as the central objectives for and operationaloutcomes of a development effort

NSD performance is a multidimensional construct thatreflects both operational effectiveness and

marketplace competitiveness


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Benefits of providing new services1. Enhancing the profitability of existing offerings

2. Attracting new customers to the firm

3. Improving the loyalty of existing customers4. Opening markets of opportunity


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HISTORICALLYy the generally accepted principle behind NSD was that

new services happen rather than occurring through

formal development processesy Compared to physical products, services are generally

under designed and inefficiently developed


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Exploitation & Explorationy exploitation research activities involve the utilization

and refinement of existing knowledge

yexploration research activities revolve revolve aroundthe search and discovery of new knowledge


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The service concepty Heskett (1986) defines it as the way in which the

organization would like to have its services perceived

by its customers, employees, shareholders andlenders,

y Edvardsson and Olsson (1996) refer to the serviceconcept as the prototype for service and define it as the

detailed description ofwhat is to be done forthecustomer (what needs and wishes are to be satisfied)and how this is to be achieved.


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The service concepty Johnston and Clark (2001) further define the service

concept as:

y 1. service operation: the way in which the service is

delivered;y 2. service experience: the customers direct experience of

the service;

y 3. service outcome: the benefits and results of the service

for the customer andy 4. value of the service: the benefits the customer perceives

as inherent in the service weighed against the cost of theservice.


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The service concept as a driverof design planning

y Without a clear and shared understanding of thenature of the service to be provided, i.e. the service

concept, how can managers expect to design asuccessful service?

y Designers and managers must first establish a sharedvision and definition of the service concept before

design processes can begin.


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y Chase and Acquilano (1989) service-system designmatrix and incorporate design variables, such as

innovations (teams, self-serve, automation),operational focus (client mix, flow, capacity, demandmanagement) and worker requirements (skills).


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y The premise of their model is that the extent ofcontact the customer has with the service delivery

system determines the specifications for its design.y The model includes dimensions of customization,

efficiency, personalization, standardization, variety,and the opportunities for cross selling.


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Proposed service design planning model.


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Proposed service design planning model.

y Chase and Bowen (1991) suggest that the design of aservice delivery system includes the role of the people,

technology, physical facilities, equipment, and theprocesses by which a service is created and delivered.


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Service recovery designy Service recovery design has emerged as a critical aspect

of service design research, because ROI in service

recovery can exceed 100% (Heskett et al., 1997).y This high ROI may be related to a proven link between

service recovery and customer satisfaction and loyalty(Spreng et al., 1995)

y

Service recovery strategy characteristics are also linkedto customer satisfaction. Rapid initiation of servicerecovery strategies is associated with highersatisfaction


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Service recovery designy Service recovery strategy characteristics are also linked

to customer satisfaction. Rapid initiation of service

recovery strategies is associated with highersatisfaction.

y Service recovery strategies that affect, in varyingdegrees, consumer satisfaction include:

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listening/acknowledgmentyApology, fixing (replacement/correction)

yAnd compensation/atonement.


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Conclusiony Studying the service concept helps us begin to understand

how customers and service providers view servicesas asum of components (processes, facilities, tasks, etc.) or as asingular outcome that is sought from the service process.

y The service concept or service in the mind (Clark et al.,2000) is the customers and providers expectation of whata service should be and the customer needs it fulfills. It

provides a foundation for developing the what, marketingcontent, and how, operations content, of a service as well asforfacilitating alignment between the strategic intent ofthe firm and the delivery service itself.

OM Present at In (the Service Concept)

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