The Service Product

Context:

We have studied last year that a ‘product’ is a ‘bundle of utilities’ or ‘arrangement of attributes’ offered in
the exchange process to satisfy consumer needs. Conceptual frameworks regarding the product aim at
aiding managerial decision making in terms of resources to be allocated for creating the product.
Towards this end we have a framework which suggests that the core product is built around the core
benefit/s. The expected product is the performance level of the core product and the augmented product
addresses supplementary needs. Over time and due to the evolution of the market the core may expand
and/or include expected or augmented product. (eg. mobile phone).

The concepts of product mix and product line address managerial concerns regarding efficient
(productivity) and effective (quality) allocation of resources towards creating the product.

In a service context, we find that some of the conceptual frameworks may have to be modified. As
discussed earlier, this is because the service (features and benefits) and its delivery (distribution)cannot
be seperated. Value chain activities of Operations and Marketing are intertwined with each other.

Lovelock’s Flower of Service Model:

Services are intangible and there is no transfer of ownership. Lovelock’s model suggests that there is a
core benefit along which a core product is arranged. However a successful exchange process will take
place only if service providers facilitate access to this core service and also enhance value from the core
service. Accordingly, the core service is surrounded by 4 petals of facilitating services: Information, Order
processing, Billing and Payment; and 4 petals of enhancing services (similar to ‘augmentation’ in a
product): Safekeeping, Hospitality, Consulting, Exceptions. (Discussion in the context of a service of your
choice) Are the concepts of product mix and product line applicable in a service context? Let us discuss
in the context of the foll services: Advertising agency, Shipping co, Branded Retail outlet

The importance of People, Process and Physical Evidence:

Service performance entails behaviours of service employees which includes their attitudes, emotions
and expertise. It also entails a sequence of activities or process. Lastly since services are intangible, the
physical evidence and service scape enhances search properties and reduces risk of purchase and
consumption.

Service design:

Since service consumption is really consumption of a process or a performance, the design of these
should be well thought out to deliver value to customers and create a surplus for the organization. Design
is important both for the development of a new service as well as to adapt the current service to changes
in customer needs and other aspects in the business environment (technology, availability of resources,
regulatory aspects).

There are some notable differences in designing tangible products and services. The outcome of a design
process in manufacturing is the product prototype. Along with this comes a set of standards and
specifications about type, grade and quantity of materials to be used, dimensions of various parts, and
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tolerances. In a service what you have is a product concept and a description of the process and/or
performance of the concept.

In the case of a tangible product, once the prototype is made it is tested and then handed over to
production. Conformance to specifications is essential and any deviations will render the product
defective. Changes in design can trigger enormous costs in terms of changing the production process,
procurement of parts, etc.

For a service concept no doubt there will be ‘mock trials’ but essentially the testing takes place in real
time. Fortunately in a service, design changes are not as costly as in manufacturing. But the flip side is
because a service is intangible, a process and a performance; service standards and specifications are
less rigidly defined. Therefore monitoring quality and value delivery are a challenge.

Principles of Service Design:

1. Know your customers: understanding their needs, demographic, psychographic and behavioural
aspects.

2. Determine which customer needs will be satisfied: Focus on only those which can be satisfied
given the organisation’s resources, at a reasonable profit. This forms the core service.

3. Determine the supplementary service elements. Together with the core service, you now have a
service concept.

4. Develop a strategy for positioning, pricing and communication.

5. Design the service process from the customer’s as well as the employee’s viewpoint. Identify
requirements of human resources and tangibles at each stage in the process.

6. Minimise handoffs: In many services the customer is serviced by more than one employee and/or
department. This increases the chance of something going wrong due to lack of communication
or miscommunication. Technology can enable this to some extent.

7. Design backstage operations to support frontline operations.

8. Incorporate data collection in the design of the process: Data may be needed to facilitate service
provision, monitor employee performance and for measuring customer satisfaction.

9. Determine the extent of customer contact and participation: This has implications for costs and
value delivery.

10. Build flexibility: There will always be unanticipated needs of customers and unanticipated factors
in the organisation’s environment (power/equipment failure). The service system must be able to
respond to these.

Tools for service design:

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A lot of tools for service design are borrowed from manufacturing. But it appears not enough attention is
paid to the design aspect. Some of the tools are:

1. Blueprinting

2. Concurrent engineering

3. Quality Function Deployment

4. Robust Design

5. Poka-Yoke or failsafe methods

6. Value engineering.

In this note we will discuss blueprinting.

Blueprinting is mapping of the service so that different people involved in providing it can deal with it
objectively regardless of their roles or point of view. It offers the complete picture to all involved. It
includes the process, roles and visible elements in the service. It is imperative that the service be
mapped from the customer’s point of view.

Components of the blueprint:

Let us take the example of a restaurant.
Customer actions –(customer places an order), (customer is served the dish)
Line of interaction

Onstage/Contact employee actions (waiter takes the order), (waiter delivers order to customer)

Line of visibility

‘Backstage’ employee actions (kitchen staff prepare the dish according to order placed),
Line of Internal Interaction (order given to waiter)

Support Processes (Inventory, data processing, records, accounting)

Steps in constructing a Blueprint:

1. Identify all activities involved in creating and delivering the service from the customer’s point of
view.
2. Specify linkages between activities and organise sequentially
3. Aggregate activities using criterion developed by you.
4. Identify Frontline employee/s for each aggregated activity.
5. What are the actions to be performed by this person? How may he/she be evaluated.
6. Identify subparts of the activity not seen by customers (backstage).
7. What are the actions to be performed and how will these be evaluated?
8. Identify support processes for each aggregated activity.
9. Actions to be performed and evaluation of support processes.
10. Describe physical evidence for each activity.

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11. Describe service-scape elements which may lead to positive perceptions or reduce negative
perceptions.

On the basis of above prepare a blue print any service of your choice except Restaurant, Hotel,
Bank, Health club/Gym.

Each group will present 1 ppt on this in class on.