9-1

Part 4

ALIGNING
SERVICE DESIGN
AND STANDARDS
 9-2

Provider Gap 2
 9-3

Key Factors Leading to Provider Gap 2

 Chapter9-4
Service Innovation and Design 8

 Challenges of Service Innovation and

Design
 New Service Development Processes
 Types of Service Innovations
 Stages in Service Innovation and
Development
 Service Blueprinting
 High-Performance Service Innovations
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Objectives for Chapter 8 9-5

:
Service Innovation and Design
 Describe the challenges inherent in service
innovation and design.

 Present the stages and unique elements of the

service innovation and development process.

 Demonstrate the value of service blueprinting and

how to develop and read service blueprints.

 Present lessons learned in choosing and

implementing high-performance service
innovations.
CHALLENGES OF SERVICE INNOVATION AND DESIGN 9-6

There are a number of inherent in attempting to Describe

Services in words alone

 Oversimplification

 Incompleteness

 Subjectivity

 Biased Interpretation
1.Oversimplification 9-7

-Service systems involving networks of service firms,

customers, and evolution of offering over time. within this
complex systems, the risks of oversimplification are even
more apparent.
• Words are not enough as service system is complex.
• Vacation trip/tour = pleasing but how pleasing?
• Banking service = Customer first, really?
2. Incompleteness
• Omitting the details or unfamiliar elements of the service.
• Flight Delay, Food being served late.
3.Subjectivity
• Description of the service is influenced by Previous
experience and
• Degree of exposure(contact) to the service
NEW SERVICE DEVELOPMENT PROCESSES 9-8

Types of Service Innovations

1.major or radical innovations:
-are new services for markets as yet undefined. past example
include first broadcast television services.
-concerned with exploration of new technology,
-is fundamentally different from incremental innovation
(series of small improvements) that is concerned with
exploitation of existing technology.
-It creates such a dramatic change in processes, products, or
services that they transform existing markets or industries,
or create new ones.
2.start-up businesses
 -already serve by existing product that meet the generic needs,-exp.
online banking for financial transactions.
 9-9
3. new services for the currently served market
-offer existing to customers a service which is not
previously available for the company
-exp. retailing adding a coffee bar or children’s play areas.
4.service line extensions
-augmentation of the existing service line
-Restaurant add new menu items service improvements
5.Service Improvements:
-Changes in features of services already offered. It might
involve
*faster execution of an existing service process,
*extended hours of service, or
*augmentations such as added amenities in hotel room (e.g.,
the addition of wireless internet connections.)
5.style changes-changing the color of a restaurant
STAGES IN SERVICE INNOVATION AND DEVELOPMENT 9-10

PROCESS
A. Front-End planning 9-11

1.Business strategy development or review

-Review the vision and mission
-the specific new service strategy and specific new
service ideas must fit within the larger strategic
mission and vision of the organization.
2.New service strategy development
-by defining a new service innovation strategy, the
org. will be in a better position to begin generating
specific ideas.
-in terms of particular markets or market segments
etc.
-one way to begin formulating a new service strategy
is to use framework shown in figure 9.2 for identifying
growth matrix
New Service Strategy Matrix for Identifying Growth
9-12

Opportunities
3.Idea Generation: The process of creating, developing, and9-13
communicating ideas which are abstract, concrete, or visual.
-Formal brain storming, solicitation of ideas from employees
and customers are methods for searching ideas.
-observing customers and use the firm’s product and service
can generate ideas
4.Service concept development and evaluation
-after clear definition of the concept, to produce a description of
the service that represents its specific features and
characteristics.
-discuss the reasons for offering new service, itemize the
service process and its benefits and provides a rational for
purchase services.
-describe the Role of delivery process
-evaluate by asking employees and customers whether they
understand, favorable or feel satisfies of the ideas.
5.Business analysis 9-14

-Estimates service concepts, economic feasibility and

potential profit implications
-demand analysis, revenue projections, cost analysis,
and potentiality are assessed at this stage
B. Implementation
1.Service Prototype Development and Testing
-A prototype is an early sample, model, or release of
a product built to test a concept or process or to act as
a thing to be replicated or learned from
-Customers and contact employees as well as
functional representatives from marketing, operations
and human resources are involved
 9-15
2.Market Testing
-new service might be offered to employees of the
org. and their families for a time to asses their
response to variations in the marketing mix
-presenting service to customer with hypothetical
mixes
-To do a final run of service to be sure that operational
are functioned smoothly.
3.Commercialization
-Service goes live and is introduced to the market
-monitor all aspects of the service during introduction
and through the complete service cycle.
-Every details of the service should be assessed:
phone calls, billing etc.
 9-16
4.Post Introduction Evaluation
-information gathered about the delivery process,
staffing or marketing mix variables on the basses of
actual market response to the offering during
commercialization of the services.
Service Blueprinting 9-17

 A tool for simultaneously depict(portray) the

service process, the points of customer
contact, and the evidence of service from the
customer’s point of view.
 9-18

Service Blueprint Components

Customer Actions
line of interaction

Visible Contact Employee Actions

line of visibility

Invisible Contact Employee Actions

line of internal interaction

Support Processes
Line of interactions: Direct interaction between the9-19
customers and the organization.
• Line of visibility: Separates all service activities
visible to customers from those not visible.
• Line of internal in interactions: Separates
customer-contact employees activities from those of
other service support activities and people.
• The most significant difference between service
blueprint and other process flow diagrams is the
primary focus on customers and their experience with
the service process.
Customer actions: Covers the steps, choices, 9-20

activities and interactions that the customer performs in

the process of purchasing, experiencing &
evaluating the service.
• On stage contact employee actions: The activities
that the contact employee performs that are visible to
the customers.
• Backstage/Invisible contact employee actions:
These activities occur behind the scenes to support the
onstage activities.
• Support processes: This section covers the internal services,
steps and interactions that take place to support the contact
employees in delivering the service.
• Physical evidence: Usually placed at the very top of the
blueprint. decoration, clothing
Service Blueprint Components 9-21
Blueprint for Express Mail Delivery Service
9-22
Blueprint for Overnight Hotel Stay Service
9-23
Building a Service Blueprint 9-24
Application of Service Blueprints 9-25

 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
 Blueprints Can Be Used By: 9-26

 Service Marketers  Human Resources

 creating realistic Management
customer expectations:
 empowering the human
 service system design
 promotion
element:
 job descriptions
 selection criteria
 appraisal systems
 Operations
Management
 System Technology
 rendering the service as
promised:  providing necessary tools:
 managing fail points  system specifications
 training systems  personal preference
 quality control databases
 9-27

Benefits of Service Blueprinting

 Provides a platform for innovation.
 Recognizes roles and interdependencies among functions,
people, and organizations.
 Facilitates both strategic and tactical innovations.
 Transfers and stores innovation and service knowledge.
 Designs moments of truth from the customer’s point of
view.
 Suggests critical points for measurement and feedback in
the service process.
 Clarifies competitive positioning.
 Provides understanding of the ideal customer experience.
 9-28

Common Issues in Blueprinting

 Clearly defining the process to be blueprinted
 Clearly defining the customer or customer segment
that is the focus of the blueprint
 Who should “draw” the blueprint?
 Should the actual or desired service process be
blueprinted?
 Should exceptions/recovery processes be
incorporated?
 What is the appropriate level of detail?
 Symbology
 Whether to include time on the blueprint
 9-29

Parking Interior
CUSTOMER EVIDENCE

Cleanliness
PHYSICAL

Exterior Design Drink Plates

of Table
Building Hostess Station Glasses
Silverware
Waiting Stand Appearance Menu Presentation Menu
Napkins
Area Appearance of Bar and Food
Sauces
Outdoor of Staff Bartenders Drinks
Centerpiece
Seating

Approach Wait/Order Order Specify Receive

Arrive at Consume Be Seated Order
Hostess Drinks Drinks/ “Spiciness” Drinks/
Restaurant
Stand at Bar
Drinks at Table
Appetizers of Sauce Appetizers
Entree Next Slide

Greet and Take Drink/ Prepare Deliver

Greet and Deliver Escort
Take Appetizer Sauce Drinks/
CONTACT PERSON

Give Buzzer Drinks to Table

Drink Order Order at Table Appetizers
(Visible)

Prepare
Drinks

Process Input Order Check

PROCESS (Invisible)

“Buzz”
Seating at Bar/ Accuracy
Customer
Requests Kitchen of Order
SUPPORT

Computerized Prepare
Receive
Seating Drinks/
Order
System Appetizers
 9-30
CUSTOMER EVIDENCE
PHYSICAL

New Portfolio
Plates Silverware with Check
Doggie
Menu Food Menu Plates Enclosed
Bags
Presentation Food Fortune
Presentation Cookies

Consume Ask for

Order Receive Eat Finish Order Eat Ask for Pay
Refills, Doggie
Entree Entree Food Meal Dessert Dessert Bill Bill
Extra Sauce Bag

Take Offer Deliver Pick-up Bring Show

Deliver Deliver Deliver
Entree Refills, Drinks, Empty Boxes to Dessert
CONTACT PERSON

Order Dessert Bill and

Order Extra Sauce Plates/ Customer Menu
(Visible)

Extra Sauce
Fortune
Clean off
Cookies
Table
Pack up Take
Food Order

Enter Order Refill Enter Total Bill

PROCESS (Invisible)

into Drinks, Take Plates

Dessert Order at
Computer Extra Sauce to Kitchen
Into Computer Computer
SUPPORT

Receive Order/
Receive Prepare Wash Print
Prepare
Food Order Food Dishes Bill
Dessert
 9-31

Tangible Cues or Indicators of Quality

 Exterior and Interior Design

 Presentation of Food/Drinks
 Appearance of Staff
 Cleanliness of Tables,
 Cleanliness of Restrooms
 Location of Restaurant
 Appearance of Surrounding Customers
 9-32

Possibility of Standardization

 Hostess Greeting
 Pre-Prepared Sauces (Mild, Medium and
Hot)
 Time Standards
 Food and Drink Quality Standards
 Bill Standards
 9-33

Potential Fail Points and Fixability

 Bar
 train to make drinks; create ample seating space for wait area overflow
 Food
 revise food presentation; create quality control checks to ensure order is
correct before delivering to customer
 Staff
 training; set number of times to check-in on customers; behavioral and
attitude guidelines; dress code
 Billing
 standards for when to bring bill, how to deliver, when to pick-up, how quickly
to process transaction; ensure one fortune cookie per customer
 Cleanliness
 standards for amount of time it takes to clear and clean tables; regular
restroom checks