Unit- 2

Service Design
What is a Service?
• Service is an act or performance that one party
can offer to another that is essentially
intangible and does not result in the ownership
of anything.
New Service
 New Service Development
• New service development is a relatively new
area of research when compared to the new
product development.
• The need to have a well structured service
development model is a necessary factor in
order to realize a launch of successful service.
• Research suggests that products that are
designed and introduced in a structured
planning framework have a greater like hood
of ultimate success than those not developed
within a framework .
 New Service Development Process
1. Business Strategy Development or review
2. New Service Strategy development
3. Idea Generation
4. Concept Development and Evaluation
5. Business Analysis
6. Service Development & Testing
7. Market Testing
8. Commercialization
 New Service Development Process
1.Idea generation - to capture new ideas.
2.Idea distillation - to screen out those ideas not
worth taking forward.
3.Concept definition - to consider specifications
such as technical feasibility and market potential.
If you're planning a new product, you should
consider the design process now.
4.Strategic analysis - to ensure your ideas fit into
your business' strategic plans.
5.Concept development - to create a prototype
product or pilot service.
6. Test marketing and finalising the concept - to
ensure your product or service can be modified
according to customer, manufacturer and support
organisations' feedback. This means deciding the
best timing and process for piloting your new
product or service.
7. Product launch - the trickiest stage. Before setting
a date you must determine how to sell, promote
and support your product or service. Getting it
right first time is essential. But any decisions to
delay your launch should be balanced against the
danger that your competitors will beat you to
market.
 New Service Development Cycle
• Full-scale launch
• Post-launch review

Full Launch Enablers Development

• Formulation

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of new services

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objective / strategy
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• Idea generation
• Service design
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and screening
and testing

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• Concept
• Process and system
development and
design and testing Product
• Marketing program testing
design and testing
• Personnel training Technology Systems
• Service testing and
pilot run
• Test marketing Tools

Design Analysis
• Business analysis
• Project authorization
3-8
Service Design Elements
• Structural
– Delivery system: Process structure, service blueprint,
strategic positioning
– Facility design: Services capes, architecture, process flows,
layout
– Location: Geographic demand, site selection, location
strategy
– Capacity planning: Strategic role, queuing models, planning
criteria
• Managerial
– Information: Technology, scalability, use of Internet
– Quality: Measurement, design quality, recovery, tools, Six
Sigma
– Service encounter: Encounter triad, culture, supply
relationships, outsourcing
– Managing capacity and demand: Strategies, yield
management, queue management
Service Blueprint
• Picture or map that accurately portrays the
service system.
• Displays the service by simultaneously
depicting the process of delivery , the points of
customer contact, the role of customers and
employees and visible elements of service.
 Strategic Positioning through Process Structure
• Degree of Complexity
– Measured by the number of steps in the service
blueprint.
– For example, a medical clinic is less complex than a
general hospital.
• Degree of Divergence
– Amount of discretion permitted the server to
customize the service.
– For example, a high-end vs. low-end hotel has more
personalized services.
Generic Approaches to Service Design
1.Production Line Approach
• The Production Line Approach to service
system design attempts to translate a
successful manufacturing concept into the
service sector and several features contribute
to its success.
Key Points
– Limit Discretion of Personnel
– Division of Labor
– Substitute Technology for People
– Standardize the Service (low divergence)
2. Customer as Co-Producer
• Customer participation can increase the degree
of customization.
• For most service systems the customer is
present when the service is being performed.
Key Points
– Self-Service (matching capacity with
demand)
– Smoothing Service Demand (appointments,
reservations, waiting)
– Customer-Generated Content
3. Customer Contact Approach
• The manufacture of products is conducted in a
controlled environment.
• This separation of activates can result in an
customer perception of personalized service.
Key Points
– Degree of Customer Contact
– Separation of High and Low Contact
Operations
– Sales Opportunity and Service Delivery
Options (channels
 Retail Design Strategy
Retail Design
• A Clear and Define Plan outlined by the retailer
to tap the market. A plan to build a long term
relationship with the customer.
• Retail design involves developing your floor
space to best appeal to your
• Retail design strategy to inspire your clients to
spend more time, and more money, in your
retail store. customers.
Retail Store Design Tips
1. Perfect the storefront: The storefront is your
first priority. If you don't get people in the
store, then the rest of your strategies and
efforts won't matter much.
• In order to design and execute a flawless
storefront, you need to understand who your
target customer is and what motivates them to
shop with you.
2. Use way finding signs strategically
• Few retail store design elements are as
important as in-store signage.
• It helps people find what they're looking for
and visually breaks the larger store down into
individual arrangements and sections.
3. Encourage impulse purchases
• Research shows that some 60 percent of
shoppers succumb to spontaneous purchases
on an occasional basis.
• Many of these impulse buys come while
customers are waiting in line at the checkout
counter.
4. Place popular items at the back of the store
• Have you ever ordered an item from
Walmart.com and selected the option to pick it
up in the store?
• If so, then you know that you have to walk all
the way to the back of the store to pick the item
up.
 Store Size/Layout
1. Grid Store Layout
1. Grid Store Layout
• The grid store layout design is a familiar, repetitive
pattern favored by retail drugstores like Walgreens
and hardware stores like Ace Hardware.
• Customers can move quickly through an efficient floor
space using standard fixtures and displays. 
• The presentation is uniform and comfortable due to
its popularity, creating a seamless customer
experience. 
• Design simplifies inventory control for the retailer - a
key to retail strategy that leverages store design to
maximize profitability. 
2. Loop Store Layout
2. Loop Store Layout
• To describe the way a loop store layout uses a
path to lead customers from the entrance of
the store to the checkout area. 
• This layout for a larger retail space (over 5,000
square feet) and encourages a clear and visible
loop for customer flow. 
• Designers accomplish the loop effect by making
the floor path a standout color, lighting the
loop to guide the customer, or using a different
floor material to mark the loop. 
3. Straight Store Layout 
3. Straight Store Layout 
• The straight store layout is efficient, simple to
plan, and capable of creating individual spaces
for the customer.
• Merchandise displays and signage is used to
keep customers moving and interested. 
• Liquor stores, convenience stores, and small
markets use the straight design efficiently.
4. Diagonal Store Layout
4. Diagonal Store Layout
• Small stores can benefit from this space
management option, and it is excellent for self-
service retailers because it invites more
movement and better customer circulation. 
• When the checkout is located in the center and
possibly raised up, the diagonal layout offers
better security and loss prevention due to the
extra sightline effect. 
5. Mixed Store Layout
5. Mixed Store Layout
• The mixed store layout uses design elements
from multiple layouts to create a flexible option
for retailers.
• Department stores use a compelling mix of
straight, diagonal, and angular concepts,
among other design elements, to create a
dynamic flow through a range of departments
featuring a variety of merchandise. 
 Network Configuration
• Network configuration is the process of
setting a network's controls, flow and
operation to support
the network communication of an
organization and/or network owner.
Waiting Time Management
 Waiting Time Management
• The waiting line management is a critical part
of service industry. It deals with issue of
treatment of customers in sense reduce wait
time and improvement of service.
• Waiting line management deals with cases
where the customer arrival is random;
therefore, service rendered to them is also
random.
• A service organization can reduce cost and thus
improve profitability by efficient waiting line
management.
  Strategies for Managing Customer Wait Times
1.  Employee Training
• Employees on the front-line are the ones who
can help make a great customer experience.  
• Employees need to be trained and equipped on
how to manage customers, communicate
information and resolve issues. 
• Well-trained employees can help turn a
negative customer experience into a positive
one.
2.  Set the Expectation
• Setting the expectation for the length of a wait
psychologically prepares the customer and
gives the customer options. 
3.  Communicate with the Customer
• Things happen and delays are inevitable – and
most customers are understanding and
forgiving.  That is why giving the customer an
idea about how long the wait will be,
accompanied by an apology, goes a long way in
showing respect for the customer and their
time.
4. Appoint a service leader to coordinate
customer-employee interactions. 
• Perceived wait time is reduced when an
employee greets customers directly, learns the
purpose of their visit and then directs them
accordingly. 
5.  Service Recovery
• As with any bad customer experience,
employees should be equipped to
perform service recovery and make things
right for the customer.