OPSM 405 Service Management

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OPSM 405 Service Management
Koç University

• Class 11
• Service Experiences

Zeynep Aksin zaksin_at_ku.edu.tr
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Chapters covered from the book

• Introduction
• Strategic positioning
• New Service Development (focused on tools
  blueprinting, conjoint analysis)
• Managing Service Experiences Starbucks
• Service Quality (tools Poke Yoke, service
  guarantees)

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From lecture notes

• Value proposition, focus strategy, strategic
  service vision, service profit chain Shouldice,
  Southwest
• Service encounters Zipcar
• Service guarantees
• Customer relationship management Starbucks

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Economic Progression (Pine Gilmore, 1999)
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Example coffee

• Coffee beans are a commodity (3-4 cents a cup)
• Manufacturers grind and package it to transform
  coffee into a good (25 cents a cup)
• Brew and serve coffee in a café and it becomes a
  service (1 a cup)
• Serve it in an ambience like at Starbucks and it
  becomes an experience (2-5 a cup)
• At Fouquets on Champs-Elysee in Paris (15-20)

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Pine and Gilmore (WSJ, 1997)

• Goods are tangible and services intangible. But
  both are decidedly uneventful, while experiences
  are memorable
• Goods are inventoried and services delivered on
  demand, while experiences unfold over a period of
  time
• Goods are standardized and service customized
  (created in response to individual demand). But
  both remain at arms length outside the customer.
  Experiences on the other hand are inherently
  personal.

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Examples from the world

• The American Girl Place toymakers park where
  girls can have tea, dine, have their dolls hair
  made, have their photos taken and put on magazine
  cover, watch a theater, etc.
• Heineken-become a beer bottle in the factory and
  drink some too
• Legoland
• Starbucks
• Paris Miki-computer system for selecting
  eyeglasses
• Parking lot in Chicago airport theme and
  signature song
• Hippo-Citroen car gallery-restaurant

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Examples from Turkey

• Turkish coffee and fortune telling
• Nike- in store basketball tournament
• Maras ice cream food and show
• Ara café, Dulcinea gallery and café
• Ciya restaurant and exploration
• Miniaturk (see detailed analysis at the end)

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Relational Model of Managed Customer Service
Process
Outcome
Service Provider
Customer
Context
Engagement
Time
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Engagement

• Personal level
• Active customers affect the performance or event
  (skiing, Popstar on TV)
• Passive customers do not influence the
  performance (Regular shows on TV, lecture in
  large auditorium)
• Environment
• Immersion customer goes into the experience
  (Mist computer game or some childrens theatre,
  reality shows)
• Absorption Experience goes into the customer
  (watching TV)

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Realms of Experience
Absorption
Laboratory
Theater
Passive Participation
Active Participation
Sweet Spot
Picasso exhibit
Chat rooms
Immersion
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Context

• Where customers consume the service and
  everything they interact with in that setting.
  Starbucks contemporary bohemian context
• Fransiz sokagi french lifestyle context
• Anadolu mutfagi anatolian village context
• Relational elements
• Physical elements

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Relational Context

• Theme unifying story or metaphor
• Learnable and Usable
• Mutable flexibility for customers to create
  their own use environment or personal experience

Shopertainement example Metro City themes
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Theme Generation

• Joie de Vivre 18 themed Boutique Hotels in Bay
  Area
• Method Take a magazine and generate 5 adjectives
  to describe it and the people that would read it.
  Design hotel experience around those words.
• Example Hotel Rex New Yorker
• Worldly, sophisticated, literate, artistic,
  clever
• Designed like an arts and literary salon of
  1930s. Clubby lobby with period furnishings,
  paintings, and old books. Rooms have local
  artists paintings and contemporary amenities.

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Theme Rolling Stone

• Funky, hip, young-at-heart, irreverent, and
  adventurous
• The Phoenix Hotel has been popular with the
  entertainment industry for over a decade. This
  funky, urban retreat is an unexpected oasis,
  featuring a landmark pool, original 50s
  architecture, and island-inspired guestrooms.
  Backflip, the hotel's poolside cocktail lounge,
  offers music by the City's most progressive DJ's.

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Theme Movie Line

• Dramatic, nostalgic, fun-loving, classic, and
  informal
• Each light and comfortable guestroom is named for
  a motion picture shot in San Francisco, with
  original movie stills as decorative room accents

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Physical

• Layout Physical layout and arrangement of
  objects (should encourage active participation)
  and reinforce theme (Ciya restaurant you have to
  look at selection and choose from it)
• Sensory Sensory elements increase immersion and
  support theme (Medieval music concert at Aya
  Irini)
• Social Interaction Interaction between guest and
  service provider and/or fellow guests. Increases
  identification with service (Club Med, Meyhane
  Refik)

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Time

• Memorabilia
• Is a physical reminder of experience, extends
  memory of it long after
• Generates dialogue about experience
• Provides additional revenue
• Continuity
• Time aspects of experience as it relates to the
  individual (bonding and moving through stages)
• Dynamic
• A desirable pattern for experiences revealed over
  a specific time frame
• Long or short term vs. intensity
• A script or music score

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Example Ian Schragers Hotels

• A theatrical experience
• The design is just one part of the formula, but
  its the way the whole thing gets put together
  that touches you in some visceral way
• You can bring freshness and thinking outside the
  box to every single industry
• I think you can have a hotel with originality
  and creativity and distinction and innovativeness
  in every city in the world, adjusted for the
  particular market it is in.

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Example CRUNCH (www.crunch.com)

• hip, irreverent brand and fitness concept
• CRUNCH is not competitive, it is
  non-judgemental, it is not elitist, it does not
  represent a kind of person.
• exercise could be more than just the same sweaty
  grind, and fitness could be more than bulging
  biceps and flat bellies
• Our teachers were not only experts, but showmen
  drag queens, rappers, dancers, actors and
  professional athletes

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Turkish Bath (Cagaloglu Hamami)

• Engagement active and immersion
• washertainement
• Special events like weddings, kina gecesi, Bienal
  exposition
• Context
• Physical building, appearance of tellaks
• Theme historical, traditional Turkish,relaxing
• Sensory Hot, steamy, wet
• Social Interaction with others and Tellak s
• Time
• Dynamic and continuity Massage, kese, washing,
  relaxing, coffee, etc.
• Can buy souvenirs etc.

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Example Miniaturk

• Engagement
• Esthetic passive-immersion
• Context
• showcase of Turkey
• Theme Turkish construction
• Easy to learn and use roads, brochures,
  instructions
• Mutability restaurant, train, playground, etc.
• Layout open air museum
• Sensory elements vehicles on bridge, sound
  explanations
• Time
• Memorobilia brochures, objects etc.
• Continuity and dynamic

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Example Go Mongo

• Engagement active-immersion
• Context
• Mongol lifestyle given in a mystic decoration
• Theme Mongolian lifestyle and taste
• Easy to learn and use Waiter directs you through
  the choosing process
• Layout Restaurant that has an unique ambiance
• Sensory Delicious
• Social Interaction with waiter and also with
  other customers
• Time
• Continuity and dynamic Unique taste, special
  ambiance, high variety

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Nargilem _at_ Tophane

• Engagement passive-immersion
• Special events like Digiturk ?
• Context ( Ottoman Architecture )
• Physical Ottoman Pictures and Sultans Signature
  
• Theme Historical Times
• Layout Small store
• Sensory elements Old music
• Social Interaction with older people and
  listening about Ottomans
• Time
• No Memorabilia
• Dynamic and Continuity Water Pipe

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Creating the Process of Customer Experience
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Context Engagement Time
Service Design What is the theme and how does it address market segments? Is the theme reflected in all context with which the customer interacts? Is the service easy to learn and use? How effective are navigational materials and guides for different users? In what ways has flexibility been incorporated into the design? How can different users customize the services to maximize their experience? How does the layout and tools encourage active participation ? How have the five sensory elements been incorporated? Fit theme? How do sensory elements help shift customers reality? How can sensory elements create transitional areas? Are there different opportunities for social interaction between employees and guests? Is there a way to get customers actively engaged (physically, emotionally, or intellectually)? How can the customers immerse in the design? How is there a sense that customers have moved to another reality? In what ways can customers emotionally connect with the services? Are there opportunities for play, fun, or enjoyment? Are there opportunities for customers to learn, to create, to increase their depth and breadth of knowledge over time? Is the context esthetically pleasing? What will make guests come in and spend time in your setting (virtual or physical)? How has memorabilia been incorporated? How does the memorabilia match the theme? How can the experience be extended or built upon? How can the experience unfold over time? How many encounters does it take for the customer to bond with the service? If the bond is broken, are there opportunities to repair the link? Are there opportunities for membership clubs, chat rooms, or long term social groups? What is the duration of the encounter? How is the experience orchestrated or designed for building emotional commitment during the given time span? How does the guest see a beginning, middle, and end of the experience in live and virtual environments? Is there an intended narrative and how is that conveyed to customers?
Employees Do employee behaviors and costume reflect the theme? How can employees help customers learn the service? Are employees trained to act as guides? Are employees trained to read body language and customer intentions for the service and react accordingly? How are employees trained for interactions with guests? How do employees help to actively engage the customers? How do employees help customer immerse in the experience? How do employees play a role in creating another reality? How do employees help the guests into the experience and participate in getting them to stay? Have employees been trained to help orchestrate the experience? How do employees help deliver the beginning, middle, and end of the experience? How do employees contribute to the intended narrative? Are employees empowered to create a customized experience for each customer?
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For next class

• Read the Starbucks case
• Complete your assignement and hand it in at the
  beginning of class