DE LA SALLE LIPA

COLLEGE OF INFORMATION
TECHNOLOGY AND
ENGINEERING

Service Management
SY 2023-2024 2nd Semester

INDUSTRIAL ENGINEERING DEPARTMENT

 GRADED TASK 1
Designing the Service Enterprise Part 1
I. GROUP MEMBERS
1. Magsambol, Ryan Aldrin
2. Nazareth, Kate
3. Pasahol, Arabella
4. Orense, Aleia Coleen

II. OBJECTIVE
• Understand the basics of designing a service enterprise

III. ACTIVITY INSTRUCTIONS (Total Points: 100)

1. Think of a service business that your group prefers to design. Specify the name of the
business, the product name, type of business, and brief explanation of how it operates (3
sentences only). (11 points)

Name of Business (2 point)

- FitFlex Gym

Service/s provided (2 point)

- The gym business offers a range of fitness services, including group exercise classes,
personalized training sessions, and access to state-of-the-art equipment. Clients can
achieve their fitness goals in a supportive environment with expert guidance from
certified trainers.

Type of Service (2 point)

- Fitness and Wellness Services

Brief one-sentence explanation of how it operates (5 points)

- FitFlex Gym offers personalized training sessions tailored to each client’s fitness goals
and needs, conducted by certified fitness trainers in a state-of-the-art facility,
promoting health and well-being through targeted exercise programs.

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2. Provide the Service Design Elements of the business. (32 points)

Structural
Element Application to the business Photo/s
Delivery 1. Process Structure:
System - Membership Sign-up:
Potential members sign up for
memberships either online or
in-person.
- Initial Consultation: New
members undergo an initial
consultation with a fitness
trainer to assess their fitness
level, goals, and any special
considerations.
- Personal Training Sessions:
Members can opt for personal
training sessions to receive
personalized workout plans
and guidance from certified
trainers.
- Group Fitness Classes: The
gym offers a variety of group
fitness classes such as yoga,
spinning, HIIT, and strength
training.
- Equipment Use: Members
have access to a range of
exercise equipment including
cardio machines, weight
machines, and free weights.
- Facility Maintenance:
Regular maintenance of
equipment and facilities to
ensure cleanliness, safety, and
functionality.
- Feedback and
Improvement: Gathering
feedback from members to
continuously improve services
and facilities.

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2. Service Blueprint:

Frontstage: Reception Area

- Reception Area: Where
potential members inquire
about memberships and
existing members check-in.
- Fitness Floor: Where
members use exercise
equipment, participate in group
classes, and interact with
trainers.
- Personal Training Area:
Dedicated space for one-on- Fitness Floor
one training sessions.

Backstage:
- Staff Offices: Where
administrative tasks such as
scheduling, billing, and
member inquiries are handled.
- Maintenance Room:
Where equipment
maintenance and repairs take Personal Training Area
place.
- Support Processes:
- Online Membership Portal:
Allows for online membership
sign-ups, class reservations,
and account management.
- Training and Certification:
Ensuring all trainers are
certified and continually
updating their skills.
Staff Offices
- Cleaning Schedule:
Regular cleaning and
sanitation protocols to maintain
a clean and hygienic
environment.

3. Strategic Positioning:
- Target Market: Identify the
target demographic, such as
fitness enthusiasts, beginners,
athletes, or specific age
groups.
- Differentiation: Highlight
unique selling points such as

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state-of-the-art equipment,
expert trainers, specialized
classes, or a focus on holistic
wellness.
- Pricing Strategy: Determine
pricing options such as monthly
memberships, class packages,
or pay-per-session rates,
balancing affordability with
value.
- Location: Select a
convenient and accessible
location with sufficient space
for facilities and parking.
- Branding and Marketing:
Develop a strong brand identity
and marketing campaigns to
attract and retain members,
leveraging social media, local
advertising, and community
events.
- Partnerships: Forge
partnerships with local
businesses, health
professionals, or fitness
influencers to expand reach
and enhance credibility.

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Facility 1. Servicescapes: The gym’s
Design environment should be
designed to evoke a sense of
energy, motivation, and well-
being. Bright colors,
motivational quotes, and
energetic music can create an
uplifting atmosphere.
Additionally, clean and well-
maintained equipment and
facilities are essential to instill
trust and professionalism.
2. Architecture: The gym’s
architecture should prioritize
functionality and flexibility. It
should accommodate various
workout zones such as cardio
areas, strength training
sections, and functional
training spaces. Additionally,
ample natural light and
ventilation can enhance the
overall ambiance and
contribute to a pleasant
workout experience.
3. Process Flows: Efficient
process flows are crucial for
smooth operations. This
includes the check-in process,
equipment maintenance
schedules, and cleaning
routines. Designing clear
pathways within the gym to
navigate between different
workout areas and ensuring
easy access to amenities like
water stations and locker
rooms can enhance user
experience and streamline
operations.
4. Layout: The layout should
be organized and intuitive, with
clear signage and designated
zones for different types of
workouts. Cardio equipment
could be placed near the
entrance for easy access, while
weightlifting areas may be

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 located towards the back for a
more focused environment.
Group fitness studios should
be separated from individual
training areas to minimize
distractions. Additionally,
creating designated spaces for
stretching, foam rolling, and
cooldown exercises can
enhance the overall
functionality of the gym layout.
Location 1. Geographic Demand:
- Analyze demographics:
Understand the demographic
profile of the area, including
age, income levels, lifestyle
preferences, and fitness
interests.
- Market research: Assess
the demand for fitness services
in the local community by
conducting surveys, studying
competitor offerings, and
analyzing trends.
- Population density:
Consider the population
density and growth trends in
the area to gauge the potential
customer base.
- Lifestyle factors: Evaluate
factors such as health
consciousness, urbanization,
and recreational preferences
that influence the demand for
gym services.

2. Site Selection
- Accessibility: Choose a
location that is easily
accessible to the target market,
with good visibility and
proximity to major roads or
public transportation hubs.
- Parking availability: Ensure
ample parking space for
members, considering both on-
site parking and nearby
options.

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 - Foot traffic: Select a
location with high foot traffic or
within a busy commercial area
to attract potential customers.
- Zoning regulations: Verify
that the chosen site complies
with local zoning regulations
and permits for commercial
use, fitness facilities, and
signage.
- Competition analysis:
Evaluate the proximity and
offerings of existing gyms and
fitness centers in the area to
identify gaps and opportunities
for differentiation.

3. Location Strategy:
- Convenience: Position the
gym in a convenient location
for the target market,
considering factors such as
proximity to residential areas,
workplaces, and shopping
centers.
- Brand alignment: Ensure
that the location aligns with the
brand image and target
demographic of the gym
business, whether it's a luxury
boutique gym, a budget-
friendly chain, or a specialty
fitness center.
- Market saturation: Avoid
oversaturated areas with
numerous competing gyms
unless there is a clear
opportunity to offer a unique
value proposition or target
underserved segments.
- Expansion potential:
Evaluate the scalability and
growth potential of the location,
considering factors such as
available space for expansion,
lease terms, and market
dynamics..

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Capacity 1. Strategic Role: FitFlex Gym
Planning needs to strategically plan its
capacity to meet the demands
of its members while
maintaining profitability. This
involves forecasting
membership growth,
understanding seasonal
trends, and adjusting capacity
accordingly. Additionally, the
gym should consider the
strategic role of its amenities
and services in attracting and
retaining members, such as
offering diverse fitness classes
or investing in specialized
equipment.
2. Queuing Models:
Implementing queuing models
can help optimize resource
utilization and minimize wait
times for members. FitFlex
Gym can utilize queuing theory
to determine the optimal
number of staff members
needed at peak times, allocate
equipment efficiently, and
schedule group fitness classes
to distribute demand evenly
throughout the day. This
ensures a smoother and more
enjoyable experience for
members while maximizing
revenue potential.
3. Planning Criteria: FitFlex
Gym’s capacity planning
criteria should consider factors
such as facility size, equipment
availability, staff availability,
and member preferences. By
analyzing historical data and
conducting surveys or
feedback sessions with
members, the gym can identify
peak hours, popular amenities,
and areas for improvement.
Planning criteria should also
account for potential

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 fluctuations in demand due to
external factors such as
holidays or local events,
allowing the gym to adapt its
capacity accordingly.

Managerial
Element Application to the business Photo/s
Information 1. Technology: With the
integration of technology and the
internet, FitFlex can offer
accessibility to their services
beyond physical locations. This
includes providing online workout
plans, virtual classes, and
personalized fitness tracking tools
FitFlex accessible through mobile
apps or web platforms. It ensures
that customers can engage with the
gym's offerings anytime, anywhere,
making fitness more convenient
and flexible.
2. Scalability: Leveraging
technology and the internet allows
gym businesses to scale their
services efficiently. For example,
virtual classes can accommodate a
larger number of participants
without physical space limitations.
Online membership management
systems streamline administrative
processes, enabling gyms to
handle growing memberships
seamlessly.
3. Use of Internet: Utilizing
internet-based platforms and tools
enables FitFlex to enhance
customer experiences and
streamline operations. For
instance, FitFlex can implement
online booking systems for classes
and appointments, allowing
members to schedule their
workouts conveniently. Internet-
connected fitness equipment can
track workout data and provide
real-time feedback to users,

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 enhancing the effectiveness of their
workouts.
Quality 1. Measurement: Implementing
precise metrics to quantify the
performance of the gym facilities,
equipment, staff, and customer
satisfaction levels. This involves
gathering data on key performance
indicators such as equipment
uptime, member retention rates,
average wait times, and feedback
scores.
2. Design Quality: Utilizing Six
Sigma methodologies to design
and develop gym facilities,
services, and programs that meet
and exceed customer
expectations. This includes
understanding customer needs,
identifying areas for improvement,
and designing solutions that
enhance the overall gym
experience.
3. Recovery: Establishing strong
processes for handling customer
complaints, feedback, and service
recovery. Six Sigma tools like Root
Cause Analysis (RCA) can help in
identifying the underlying causes of
issues and implement effective
corrective actions to prevent
recurrence.
4. Tools: Leveraging Six Sigma
tools such as DMAIC (Define,
Measure, Analyze, Improve,
Control) to systematically improve
our business processes. These
tools provide a structured approach
to problem-solving, process
optimization, and continuous
improvement.
5. Six-Sigma: Providing
comprehensive training and
certification programs in Six Sigma
methodologies to the staff. This
empowers employees at all levels
to contribute to quality
improvement initiatives, drive

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 efficiency gains, and foster a
culture of continuous improvement
within the organization.

Service 1. Encounter Triad: FitFlex thrives

Encounter on the Encounter Triad,
emphasizing interactions among
service providers, customers, and
fellow gym-goers. Staff members
are trained to offer guidance and
assistance and to cultivate an
atmosphere of inclusivity and
motivation during workouts.
Customers are encouraged to feel
welcomed, valued, and supported
in their fitness journey, creating a
sense of belonging and
camaraderie within the gym
community.
2. Culture: Establishing a strong
and positive gym culture is
essential for shaping the service
encounter. This culture revolves
around promoting health, fitness,
and well-being as core values,
permeating every aspect of the
gym's operations. Regular
communication and engagement
activities, such as group classes,
fitness challenges, and social
events, are organized to strengthen
the gym's culture and foster a
sense of community among
members.
3. Supply Relationships: Building
strong relationships with suppliers
and vendors is crucial for ensuring
the availability of high-quality
equipment, amenities, and
supplies in the gym. Negotiating
favorable terms and contracts with
suppliers helps in minimizing costs
while maintaining quality standards
and reliability.
4. Outsourcing: Outsourcing
certain non-core activities, such as
janitorial services, maintenance, or

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 IT support, can streamline
operations, reduce costs, and allow
the gym to focus resources on core
competencies. Clear
communication channels and
performance metrics with
outsourced partners ensure
accountability and adherence to
service level agreements.

Managing 1. Strategies: FitFlex Gym can

Capacity & implement several strategies to
Demand manage capacity and demand.
These include offering different
membership tiers with varying
access levels, implementing a
reservation system for popular
classes or peak hours, providing
promotions for off-peak hours,
optimizing group fitness class
schedules, and implementing peak
pricing for high-demand services.
2. Yield Management: FitFlex
Gym can utilize yield management
techniques to dynamically adjust
pricing and capacity based on
demand. This includes
implementing dynamic pricing,
utilizing member analytics to
optimize pricing strategies, setting
capacity controls for different areas
of the gym, and offering flexible
membership options such as pay-
per-use passes.
3. Queue Management: FitFlex
Gym can optimize queue
management practices to reduce
wait times and improve the
member experience. This includes
implementing digital check-in
systems, virtual queues for popular
classes or equipment, providing
real-time queue updates and
estimated wait times, offering

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 priority access for premium
members or those with
reservations, and strategically
allocating staff resources to
manage queues effectively.

Rubric for each application:

Description Points
The explanation is logical, complete, and consistent, and it provided 4
photos that visually presents the idea.
The explanation is logical, complete, and consistent, but no photos were 3
provided.
The explanation is neither logical, complete, nor consistent. 2
No explanation provided. 0

3. Determine one (1) the service design approach that will be applied in the selected
business. (6 points)
Reason for
Approach Specific Approach How it will work
Selection
Customer Contact Degree of Customer This approach is FitFlex Gym
Approach Contact ideal for FitFlex ensures a high
Gym because it degree of customer
emphasizes the contact through
importance of personalized
direct interaction training sessions
between the led by certified
fitness trainers fitness trainers.
and clients. Since Trainers conduct
personalized initial
training sessions assessments, offer
are a core service hands-on guidance
offering, during sessions,
maximizing and provide
customer contact ongoing support to
ensures that help clients
clients receive achieve their
individualized fitness goals safely
attention, and effectively.
guidance, and This personalized
support tailored approach creates a
to their specific supportive
fitness goals and environment,
needs. This maximizing the
approach fosters effectiveness of
strong each session and
relationships with

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 clients, enhancing overall
understand their client satisfaction.
preferences and
progress, and
provide a
superior service
experience.

Rubric:
Description Points
The explanation is comprehensively connected to the approach, and it is 3
logical, complete, and consistent.
The explanation is connected to the approach, and it is logical, complete, 2
and consistent.
The explanation is neither logical, complete, nor consistent. 1
No explanation provided. 0

4. Determine one (1) mode of contact that will be utilized by the selected business. (6 points)
Mode of Specific Mode
Reason for Selection How it will work
Contact of Contact
Face-to-Face Technology- FitFlex business is 1. Online Membership
Contact Facilitated considered a Management: FitFlex
Service technology-facilitated Gym offers online
Encounter service encounter due platforms or mobile
to the widespread use apps where members
of technology in various can sign up for
aspects of its memberships, book
operations. This classes, manage their
includes membership accounts, and even
management systems, track their fitness
fitness tracking apps progress. These digital
and wearables, virtual platforms enhance
training platforms, convenience and
digital equipment, and accessibility for
online communities. members, allowing
These technological them to engage with the
tools enhance the gym's services
overall service remotely.
experience by providing
convenience, 2. Fitness Tracking
personalization, and Devices: With the
connectivity for proliferation of wearable
members, making it fitness trackers and
easier for them to track apps, gym-goers can
their progress, engage monitor their workouts,
with the gym's offerings, track their performance

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and stay connected with metrics such as heart
fellow members and rate and calories
trainers. burned, and set fitness
goals. Integration with
these devices allows
gyms to provide
personalized
recommendations and
feedback to members
based on their activity
levels and progress.

3. Virtual Training and

Classes: FitFlex gym
offers a virtual training
sessions and on-
demand workout
classes through
streaming platforms or
interactive apps. This
technology allows
members to access
professional guidance
and participate in group
fitness sessions from
the comfort of their
homes, extending the
reach of the gym's
services beyond its
physical location.

4. Equipment
Integration: Modern
gym equipment is
increasingly equipped
with technology
features such as touch
screens, interactive
displays, and built-in
workout programs.
These features
enhance the user
experience by providing
real-time feedback,
instructional videos, and
personalized workout
routines, making the
gym environment more

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 engaging and effective
for members.

5. Data Analytics and

Personalization:
FitFlex Gym leverages
data analytics to gain
insights into member
behavior, preferences,
and performance
trends. By analyzing
this data, gyms can
tailor their services,
marketing efforts, and
facility layout to better
meet the needs and
preferences of their
members, enhancing
the overall service
experience.

6. Communication
Channels: Technology
enables seamless
communication
between gym staff and
members through
various channels such
as email, text
messaging, social
media, and instant
messaging apps. This
allows gyms to provide
timely updates,
reminders, and
customer support,
fostering stronger
relationships and
engagement with
members.

Rubric:
Description Points
The explanation is comprehensively connected to the mode of contact, 3
and it is logical, complete, and consistent.

16
 The explanation is connected to the mode of contact, and it is logical, 2
complete, and consistent.
The explanation is neither logical, complete, nor consistent. 1
No explanation provided. 0

5. Determine of the dimensions of service quality will be applied to the selected business to
ensure that customer expectations will be met. (15 points)
Dimension Application to the business
Reliability FitFlex Gym ensures consistency and dependability in delivering its
fitness services. This includes providing reliable access to gym
facilities, and personalized training sessions as promised to clients.
Also, it entails maintaining equipment in optimal working conditions
to avoid disruptions during workouts.
Responsiveness It demonstrates responsiveness by promptly addressing customer
inquiries, concerns, and feedback. This includes providing timely
responses to membership inquiries, scheduling changes, and
resolving any issues or complaints that may arise during training
sessions.
Assurance FitFlex Gym instills confidence and trust in its clients through the
assurance of quality service delivery. This involves employing
certified fitness trainers who possess the necessary expertise and
qualifications to guide clients effectively towards their fitness goals.
Additionally, the gym ensures a safe and supportive environment
conducive to achieving optimal results.
Empathy Also, it practices empathy by understanding and addressing the
individual needs and preferences of its clients. This involves
attentive listening to client goals, concerns, and limitations, and
customizing fitness programs accordingly. Trainers demonstrate
empathy by providing encouragement, motivation, and support
throughout the fitness journey.
Tangibles It emphasizes the physical facilities, equipment, and amenities
provided to enhance the overall customer experience. This includes
maintaining a clean and well-equipped gym environment, offering
modern exercise equipment, and providing amenities such as locker
rooms, showers, and refreshment areas to ensure client comfort and
satisfaction.

Rubric:
Description Points
The explanation is comprehensively connected to the dimension, and it is 3
logical, complete, and consistent.
The explanation is connected to the dimension, and it is logical, complete, 2
and consistent.
The explanation is neither logical, complete, nor consistent. 1
No explanation provided. 0

17
6. Determine one (1) cost per cost category that will be incurred by the business to ensure
quality. (24 points)
Cost Category Costs to be incurred and Purpose of monitoring the
explanation cost
Prevention Investment in Staff Training - Monitoring the cost of
Programs staff training programs
- FitFlex Gym will incur costs allows FitFlex Gym to
related to staff training assess the
programs to prevent effectiveness of its
service quality issues and investment in
ensure that employees preventing service
possess the necessary quality issues. By
skills and knowledge to tracking expenses
deliver high-quality fitness related to training
services. This investment initiatives and
includes expenses such as evaluating their impact
hiring professional on reducing errors,
trainers, conducting enhancing employee
regular training sessions competence, and
on fitness techniques, improving customer
customer service skills, experiences, the gym
and safety protocols. By can make informed
investing in staff training, decisions about
the gym aims to prevent resource allocation and
errors, accidents, and continuous
customer dissatisfaction, improvement efforts.
ultimately improving Regular monitoring
service quality and helps ensure that the
customer satisfaction. cost of prevention
remains justified by the
benefits of improved
service quality and
customer satisfaction.
Detection Implementation of Quality - It enables FitFlex Gym
Control Measures to proactively identify
- It will incur costs and address any
associated with service quality issues
implementing quality before they escalate,
control measures to detect ensuring that customers
any deviations from receive consistent and
service standards and satisfactory
identify potential issues experiences. By
early on. This includes allocating resources to
expenses related to detection activities, the
regular inspections of gym can maintain high
equipment and facilities, service standards,
conducting performance minimize the risk of

18
 assessments of trainers, customer complaints or
and gathering feedback dissatisfaction, and
from members. protect its reputation in
Additionally, investments the market. Regular
in monitoring tools and monitoring helps
technology to track service evaluate the
quality metrics and effectiveness of
customer satisfaction detection efforts and
levels contribute to the allows for adjustments
detection cost. to improve the overall
quality management
process.
Internal Failure Employee Training and - It allows FitFlex Gym to
Development Programs mitigate the risk of
- FitFlex Gym will invest in internal failures, such
employee training and as inadequate service
development programs to provision or errors in
minimize internal failures instruction, which can
related to service delivery. lead to customer
These costs include dissatisfaction and
expenses associated with reputational damage.
conducting training By investing in
sessions for staff employee skill
members, hiring qualified development, the gym
trainers, and providing aims to enhance
ongoing education to service quality, increase
ensure that employees customer satisfaction,
possess the necessary and minimize the
skills and knowledge to occurrence of internal
deliver high-quality failures that may impact
services. Additionally, business operations
resources allocated to and profitability.
performance improvement Regular evaluation of
initiatives, such as training effectiveness
mentorship programs and helps identify areas for
skill enhancement improvement and
workshops, contribute to ensures that employees
reducing internal failure remain equipped to
costs by addressing any meet customer
deficiencies in service expectations.
delivery within the
organization.
External Failure Customer Compensation and - It helps FitFlex Gym
Recovery Efforts manage the financial
- may incur costs related to impact of external
external failures, such as failures and mitigate
customer compensation potential losses
and recovery efforts, to resulting from customer

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 address service dissatisfaction. By
deficiencies that result in allocating resources to
customer dissatisfaction or address service
complaints. These costs deficiencies promptly
include refunds, discounts, and effectively, the gym
or complimentary services aims to retain customer
provided to affected loyalty, minimize
customers as a form of reputational damage,
compensation for any and safeguard long-
service failures term business
experienced. Additionally, sustainability. Regular
expenses associated with evaluation of external
implementing recovery failure costs allows the
strategies, such as gym to assess the
outreach programs, effectiveness of its
apology letters, or follow- customer recovery
up communications to initiatives and make
regain customer trust and necessary adjustments
loyalty, contribute to to improve service
external failure costs. quality and prevent
recurrence of similar
issues in the future.

Rubric:
Description Points
The explanation is comprehensively connected to the dimension, and it is 3
logical, complete, and consistent.
The explanation is connected to the dimension, and it is logical, complete, 2
and consistent.
The explanation is neither logical, complete, nor consistent. 1
No explanation provided. 0

7. Determine one (1) service recovery approach that will be used by the selected business.
(6 points)
Approach Reason for selection How it will work
Systematic This approach involves For example, the gym
Response Approach implementing standardized establishes a protocol for
procedures or protocols for handling equipment
handling common service malfunctions. When a member
issues. It can be useful for reports a malfunctioning
streamlining the service treadmill, staff follow a
recovery process and ensuring predetermined procedure to
consistency in how problems tag the equipment as out of
are addressed. order, notify maintenance, and

20
 offer the member alternative
workout options.

Rubric:
Description Points
The explanation is comprehensively connected to the dimension, and it is 3
logical, complete, and consistent.
The explanation is connected to the dimension, and it is logical, complete, 2
and consistent.
The explanation is neither logical, complete, nor consistent. 1
No explanation provided. 0

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