Chapter 9 Overheads

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Part 4
ALIGNING SERVICE DESIGN AND STANDARDS
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Provider Gap 2
CUSTOMER
COMPANY
Customer-Driven Service Designs and Standards
Service Design and Standards Gap
Company Perceptions of Consumer Expectations
Part 4 Opener
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Objectives for Chapter 9Service Development and
Design

• Describe the challenges inherent in service
  design.
• Present the stages and unique elements of the
  new-service development process.
• Demonstrate the value of service blueprinting and
  how to develop and read service blueprints.
• Managerial Implications of Design and Blueprinting

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Figure 9.1Risks of Relying on Words Alone to
Describe Services

• Oversimplification
• Incompleteness
• Subjectivity
• Biased Interpretation

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Types of New Services

• major or radical innovations
• start-up businesses
• new services for the currently served market
• service line extensions
• service improvements
• style changes

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Figure 9.2New Service Development Process

• Business strategy development or review

• New service strategy development

• Idea generation

Front-end Planning
Screen ideas against new service strategy

• Concept development and evaluation

Test concept with customers and employees

• Business analysis

Test for profitability and feasibility

• Service development and testing

Conduct service prototype test

• Market testing

Implementation
Test service and other marketing-mix elements

• Commercialization

Sources Booz-Allen Hamilton, 1982 Bowers,
1985 Cooper, 1993 Khurana Rosenthal 1997.

• Postintroduction evaluation

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Figure 9.3New Service Strategy Matrix for
Identifying Growth Opportunities
Markets
Offerings
Current Customers
New Customers
Existing Services
Share building
Market development
New Services
Diversification
Service development
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Service Components Exercise

• Think of Bison Football as a service
  organization
• What is the core service?
• What are the supplementary services?

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Figure 9.5Service Blueprinting

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

Process
Service Blueprint
Points of contact
Evidence
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Service Blueprint Components
Customer Actions
line of interaction
Onstage Contact Employee Actions
line of visibility
Backstage Contact Employee Actions
line of internal interaction
Support Processes
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Figure 9.6Service Blueprint Components
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Figure 9.7Blueprint for Express Mail Delivery
Service
Truck Packaging Forms Hand-held Computer Uniform
Truck Packaging Forms Hand-held Computer Uniform
PHYSICAL EVIDENCE
Customer Gives Package
CUSTOMER
Line of interaction
Driver Picks Up Package
(On Stage)
Deliver Package
CONTACT PERSON
Line of visibility
(Back Stage)
Customer Service Order
Line of internal interaction
Airport Receives Loads
Fly to Sort Center
Load On Truck
Dispatch Driver
Unload Sort
Fly to Destination
Load on Airplane
SUPPORT PROCESS
Sort Packages
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Figure 9.8Blueprint for Overnight Hotel Stay
Service
Hotel Exterior Parking
Cart for Bags
Desk Registration Papers Lobby Key
Elevators Hallways Room
Cart for Bags
Room Amenities Bath
Menu
Delivery Tray Food Appearance
Food
Bill Desk Lobby Hotel Exterior Parking
PHYSICAL EVIDENCE
Arrive at Hotel
Give Bags to Bellperson
Call Room Service
Check out and Leave
Go to Room
Receive Bags
Sleep Shower
Receive Food
CUSTOMER
Eat
Check in
Line of Interaction
Greet and Take Bags
(On Stage)
Deliver Bags
Deliver Food
Process Registration
Process Check Out
CONTACT PERSON
Line of Visibility
Take Food Order
(Back Stage)
Take Bags to Room
Line of Internal Interaction
Prepare Food
Registration System
SUPPORT PROCESS
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Figure 9.9Building a Service Blueprint
Step 4 Map contact employee actions, onstage and
back-stage, and/or technology actions
Step 6 Add evidence of service at each customer
action step
Step 1 Identify the process to be blue-printed
Step 2 Identify the customer or customer segment
Step 3 Map the process from the customers point
of view
Step 5 Link contact activities to needed support
functions
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Application 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

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Blueprints Can Be Used By

• Human Resources Management
• empowering the human element
• job descriptions
• selection criteria
• appraisal systems
• System Technology
• providing necessary tools
• system specifications
• personal preference databases

• Service Marketers
• creating realistic customer expectations
• service system design
• promotion
• Operations Management
• rendering the service as promised
• managing fail points
• training systems
• quality control

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Blueprinting and Strategy

• Complexity is the number and intricacy of the
  steps in delivery.
• Divergence is the degree of freedom allowed or
  inherent in a step or series.
• (Choice, Discretion, Customization)
• Both can be changed.
• Why are Subway employees artists?

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Divergence Tradeoffs

• Decreasing typically
• - Increase Uniformity (Consistency)
• - Lowers Costs
• - Increases Productivity
• - Increases Efficiency
• Increasing typically
• -Increases Personalization
• -Increases Differentiation
• -Allows a price Premium

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Complexity Tradeoffs

• Decreasing typically
• - Increases Specialization
• - Increases Focus
• - Results in Limited Service
• Increasing typically
• - Allows more coverage
• - Efficiency can be or
• -Results in more Full Service
• Example Floral Shop

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Benefits of Blueprinting

• Ex. 9.3 Condensed
• 1. See the Big Picture
• 2. and the parts
• 3. and the critical connections
• a. customer and service employee
• b. employee and support
• 4. Appreciation all the activities and functions

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Service Branding

• Name, Term, Symbol use to distinguish
• Product versus Organization
• Importance of in Services
• Case of Marriott