Part - 4ALIGNING STRATEGY, SERVICE DESIGN AND STANDARDS

Services Marketingby P Sivarajadhanavel

Part 4ALIGNING STRATEGY, SERVICE DESIGN AND STANDARDS

Chapter - 9 – Service Development and DesignChapter – 10 – Customer-Defined Service StandardsChapter – 11 – Physical Evidence and the Servicescape

CUSTOMER

COMPANY

GAP 2

Customer-Driven Service Designs and

Standards

Company Perceptions of

Consumer Expectations

Provider GAP 2 Provider GAP 2 Service Designs and standardsService Designs and standards

Provider Gap – 1 Difference between customer expectations

of service and company understanding of those expectations

Provider Gap -2 Difference between company understanding

of customer expectations and development of customer driven designs and standards

Chapter 8

Service Development and Design

ObjectivesObjectives• Describe the challenges inherent in service

design• Present steps in the new-service

development process• Show the value of service blueprinting and

read service blueprints• Present lessons learned in choosing and

implementing high-performance service innovations

Challenges of Service Design

Risks of Relying on Words Alone to Risks of Relying on Words Alone to Describe ServicesDescribe Services Oversimplification Incompleteness Subjectivity Biased Interpretation

New Service DevelopmentNew Service Development

Characteristics It must be objective, not subjective It must be precise, not vague It must be fact driven, not opinion

driven It must be methodological, not

philosophical

Types of New Services

Major or radical innovations Start-up businesses New Services for the currently served

market Services line extensions Service improvements Style Changes

Stages in New Service Development Process

Front-End Planning Business Strategy Development or review Prospectors, Defenders, Analyzers and Reactors New Service Strategy Development Idea Generation Service Concept Development and Evaluation Business Analysis Implementation Service Development and Testing Market Testing Commercialization Post Introduction Evaluation

New Service Development Process

Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997 .

New Service Strategy Development Idea Generation

Concept Development and Evaluation

Business Analysis

Service Development and Testing

Postintroduction Evaluation

Commercialization

Market Testing

Screen ideas against new service strategy

Test concept with customers and employees

Test for profitability and feasibility

Conduct service prototype test

Test service and other marketing-mix elements

Front End Planning

Implementation

Business strategy development or review

Idea GenerationIdea GenerationNew Service Strategy Matrix for New Service Strategy Matrix for Identifying Growth OpportunitiesIdentifying Growth Opportunities

Markets

Offerings

ExistingServices

NewServices

Current Customers New Customers

SHARE BUILDING

DIVERSIFICATION

MARKETDEVELOPMENT

SERVICEDEVELOPMENT

Service BlueprintingService Blueprinting A picture or map that accurately portrays the

service system Point of contact for different people involved in the

service Useful at the design and redesign stages of

service development Visually displays the service by simultaneously

depicting the process of service delivery, the point of customer contact, the roles of customers and employees, and the visible elements of the service

A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view.

ServiceMapping

Process

Points of Contact

Evidence

Service BlueprintingService Blueprinting

Service BlueprintService Blueprint ComponentsComponents

CUSTOMER ACTIONSline of interaction

“ONSTAGE” CONTACT EMPLOYEE ACTIONS

line of visibility

“BACKSTAGE” CONTACT EMPLOYEE ACTIONS

line of internal interaction

SUPPORT PROCESSES

Physical evidence

Service Blueprint of ExpressExpress Mail Mail Delivery ServiceDelivery Service

DriverPicksUp Pkg.

DispatchDriver

AirportReceives& Loads

SortPackages

Load onAirplane

Fly toDestinati

on

Unload&

Sort

LoadOn

Truck

SU

PPO

RT

PR

OC

ESS

CO

NTA

CT

PER

SO

N(B

ack

Sta

ge)

(On S

tage)C

USTO

MER

PH

YSIC

AL

EV

IDEN

CE

CustomerCalls

CustomerGives

Package

Truck, Packaging, FormsHand-held Computer, Uniform

ReceivePackage

DeliverPackage

CustomerServiceOrder

Fly toSort

Center

Blueprint for Overnight Hotel Stay Blueprint for Overnight Hotel Stay ServiceService

SU

PPO

RT P

RO

CESS

CO

NTA

CT P

ER

SO

N

(Back

Sta

ge)(

On S

tage)

CU

STO

MER

HotelExteriorParking

Cart for Bags

DeskRegistrationPapersLobbyKey

ElevatorsHallwaysRoom

Cart for Bags

RoomAmenitiesBath

Menu DeliveryTrayFoodAppearance

Food Bill, DeskLobbyHotelExteriorParking

Arriveat

Hotel

Give Bagsto

BellpersonCheck in Go to

RoomReceive

BagsSleep

Shower

CallRoom

Service

ReceiveFood

EatCheck out

andLeave

Greet andTakeBags

ProcessRegistration

DeliverBags

DeliverFood

ProcessCheck Out

Take Bagsto Room

TakeFoodOrder

RegistrationSystem

PrepareFood

RegistrationSystem

PH

YSIC

AL

EV

IDEN

CE

Building a BlueprintBuilding a Blueprint Identify the service process to be Blueprinted Identify the customer or customer segment

Experiencing the Service. Map the process from the customer’s point of

view. Map contact employee actions, onstage and

back-stage, and Technology Actions. Link customer and contact person activities to

needed support functions. Add evidence of service at each customer

action step

Building a Service BlueprintBuilding a Service Blueprint

Step 1

Identify the process to be blue-printed.

Step 1

Identify the process to be blue-printed.

Step 2

Identify the customer or customer segment.

Step 2

Identify the customer or customer segment.

Step 3

Map the process from the customer’s point of view.

Step 3

Map the process from the customer’s point of view.

Step 4

Map contact employee actions, onstage and back-stage.

Step 4

Map contact employee actions, onstage and back-stage.

Step 5

Link customerand contact person activities to needed support functions.

Step 5

Link customerand contact person activities to needed support functions.

Step 6

Add evidence of service at each customer action step.

Step 6

Add evidence of service at each customer action step.

Application of Service BlueprintsApplication of Service Blueprints

New Service Development concept development market testing

Supporting a “Zero Defects” Culture managing reliability identifying empowerment issues

Service Recovery Strategies identifying service problems conducting root cause analysis modifying processes

Blueprints Can Be Used ByBlueprints Can Be Used By

Service Marketers creating realistic customer expectations

service system design promotion

Operations Management rendering the service as promised

training systems quality control

Blueprints Can Be Used ByBlueprints Can Be Used By

Human Resources empowering the human element

job descriptions selection criteria appraisal systems

System Technology providing necessary tools:

system specifications personal preference databases

Quality Function Deployment A system for translating customer requirements into

appropriate company requirements at every stage, from research through production design and development to manufacture; distribution, installation and marketing, sales and services

Elements of Service Quality Customer expectations Importance of expectations Controllable elements of service Relationship among elements of service Association between expectations and service elements Overall importance of service elements for meeting

customer expectations Difficulty rankings Competitive assessment

High Performance Service Innovations Choose the right projects Integrate new services Multiple measures of success Learn from Major Successes

Market Synergy Market driven new product process Effective Marketing communications Customer service Managerial and functional synergy Launch preparation Product responsiveness Product advantage Innovative Technology

Maintain Flexibility

END