GREAT WINE CAPITALS International Research Grant 2013-2014

EXECUTIVE REPORT

The application of ‘Service Design’

in wine tourism destinations: Enhancing customer experience in Mendoza’s wine tourism products.

Valentina Raffaelli Politecnico di Milano valenraf@gmail.com Mendoza, Argentina 1st October 2013

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The application of ‘Service Design’ in wine tourism destinations: Enhancing customer experience in Mendoza’s wine tourism products.

ABSTRACT

As the service economy gets more evident, there is a trend on the search for tourism

destinations from an experiential level. Equally, the role of service and strategic design had

shown to be valid when it comes to better understand user experiences and contribute to

regional development. Therefore, the impact of service design in wine tourism destinations

can bring a different perspective from both a qualitative and strategic approach. From an

experiential and qualitative level, the implementation of these methodologies could be

relevant as long as they articulate the conception of new service propositions; this means

the design of each service touchpoint in the experience of visiting a ‘winescape’. On the

other hand and from a strategic level, service design tools foresee and anticipate new

service features and preferences, starting from identifying customers expectations,

evaluating service flows and gathering costumer feedback. We consider this double-tier

approach particularly relevant towards the topics of destination management as it

demonstrates a customer-centric strategy that differs from the traditional business practices

developed by wineries and tour operators in Mendoza wine country. Ultimately, the purpose

of this study is to look forward, through the case of Mendoza wine country, emphasizing on

the analysis of three holistic experiences offer by Atamisque, Vistalba and Zuccardi

wineries. It also seek out for improvements on the wine tourism services having as main

challenge the stages of gathering and disseminating costumer satisfaction alongside the

touchpoints of the wine tourism experience.

KEY WORDS

Service design, Wine tourism, Costumer experience, Customer satisfaction, Mendoza

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INTRODUCTION

Over the last decade there has been an attempt to frame the definition of wine tourism, and

consequently find out the motivations of millions of tourists when it comes to visit wine

destinations. Due to the commercial relevance of this topic, there is always more and more

research on wine tourism even though almost a quarter of the literature comes from countries

coming from the so-called "new-world" of wine. Due to this fact, there is a need on making

more in depth research on different populations and locations and to employ more

sophisticated research methods for their examination (Mitchell & Hall, 2006). On the other

hand, changes in the design context had started to view the inclusion of services as part of

the discipline. Moving from the design of tangibles products to the design of more complex

service processes, has led to the emergence of ‘Service Design’ as a new field. In this new

scenario a multidisciplinary and systematic approach is needed in order to cope with the

complexity of intangible services by evidencing their systems as well as placing the customer

at the heart of the process (Stickdorn, 2009).

It is said that the user’s experience is what makes the success of the tourism products;

therefore, here is when service design can make the difference in the value chain of the wine

tourism industry. Corresponding, the main issue in Mendoza's wine tourism industry is the

lack of complementary streams of revenues different from the in-cellar selling. Significant

investments on architecture and brand emerged in order to give value and enhance wine

tourism but still lot of resources are required to sustain tourism, making wineries resist to this

business activity. According to a market survey conducted in 2011 by the Great wine capital

network in the last 5 years, the region showed a negative perception of the viability of the

wine tourism activity, but a considerable percentage believed that wine tourism remains a

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good alternative to face economic crisis periods. It becomes now evident that Mendoza wine

country needs to tackle the problem through the adoption of strong strategies leveraging on a

holistic and experiential approach that can differentiate it from the rest of wine destinations.

OBJECTIVES

The main aim of this project is to explore and build understanding on how practical

application of service design can impact a wine tourism journey in wineries. This includes

considerations on the understanding of the wine tourist at an experiential level and the

relevant factors that affect his expectations and satisfaction taking into account the

distinctive characteristics of Mendoza as a wine tourism destination. Moreover through the

implementation of an empiric prototype, I attempt to draw recommendations on the process

of gathering and disseminating costumer satisfaction insights.

LITERATURE REVIEW

This literature review had analyzed two different branches of research. On the first place,

Service design and literature regarding service innovation on the tourism sector. On the

second place, I reviewed the topics of Wine tourism, and destination management (cp.

Buhalis, 2000; Weaver and Oppermann, 2000; Buhalis and Cooper, 1998; Palmer and

Bejou, 1995) leveraging on authors dealing with wine tourism in the experiential level (Felitti

and Fiore, 2012). One of the results encountered and proven by different authors is the

mutual benefit that exists between service design and tourism (cp. Zehrer & Stickdorn,

2009; Strnad 2008; Miettinen, 2007). In addition, this research has scanned studies and

research results that seek for best practices and performers in the context of the Great

Wine Capitals Global Network (Bouzdine-Chameeva, Durrieu, Faugère, Pesme, 2013).

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Service Design

Service design is a new field developing since approximately the beginning of 1990’s.

According to the Design Dictionary (Erlhoff and Marshall, 2008) and Birgit Mager (2007;

2008) service design is " a human-centred and holistic approach that integrates user-

oriented, team based methods", so "Service designers visualise, formulate, and

choreograph solutions to problems that do not necessarily exist today; they observe and

interpret requirements and behavioural patterns and transform them into possible future

services". Indeed Stefan Moritz (2005) in his publication entitled "Service Design Practical

Access to an Evolving Field" includes a common-ground definition of the role and limits of

this discipline. He defines service design as what "helps companies to innovate (create

new) or improve (existing) services and to make them more useful, usable, desirable for

clients and efficient as well as effective for organizations. It’s a new holistic, multi-

disciplinary, integrative field". Equally Stickdorn and Schneider (2010) define the concept of

service design as an interdisciplinary approach, which can be outlined along five basic

principles: user-centred, co-creative, sequencing, evidencing and holistic. However in the

current years there is a focus on expanding the knowledge of Service Design towards two

approaches or trends. The first one is more theoretical, willing to widen the theoretical

scope of service design research. The other one has a more practical approach focusing

more on design tools adopted by practitioners and innovation consultancies. In general

terms the literature coming from the second trend attempts to describe the service design

process according to the number of steps during a project. In this direction Mager (2009)

and Van Oosterom, (2009) explains 3 main phases at follows: "The identification and

discovery phase is about understanding the service context and the users, as well as the

business environment of the client. The building, conceptualizing and creation phase is

about visualizing, co-creation, participatory design and prototyping. The main aim in

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comparing service concepts is to find out what the profitability of the service would be and if

the created services would be valuable to customers. The implementation phase,

incorporating the IT process, development and training, is also often included in the

process ". As a conclusion we can say, that the new focus on Service Design has changed

from the early research. There has been an attempt to connect service design to other

disciplines and to differentiate it from other design fields. Some authors started establishing

service design as a new discipline (Manzini, 1993; Maffei, Mager & Sangiorgi, 2005) using

sources from other fields and applying their knowledge from other design fields to gradually

create what is called today “Service Design”.

On the other hand, literature has shown a new term that tackles the topic of service

innovation and value creation within the context of organizations. The Service Dominant

logic (S-D logic) concept was first adopted by Steve Vargo and Robert Lusch in 2004 and is

consider among the topics within service marketing /management. Essentially what Service

Dominant logic discusses is that a company cannot create and deliver value, they can only

propose value and provide service as an input until the customer realizes it, and therefore it

suggests a commitment to collaborative processes with employees, customers and other

stakeholders. In fact the fundamental of S-D logic is the exchange of services or

competences (knowledge and skills) for the benefit of a party. This theory takes for granted

that all firms are service firms and all markets are service-exchange centred, this means

and ultimately all economies and societies are service based. As a matter of fact the

Service Dominant logic embraces concepts of the value-in-use and co-creation of value

(contrary to the G-D logic) and this takes us to the concept of co-creation in service design

and innovation. In the purely design research arena, this new concept is known as Co-

creation (Sanders and Stappers, 2008) and its definition is widely accepted among

designers.

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Wine Tourism

Perhaps the most quoted definition in Wine tourism is “visitation to vineyards, wineries,

wine festivals and wine shows for which grape wine tasting and/or experiencing attributes

of a grape wine region are the prime motivating factors for visitors” (Hall & Macionis, 1998).

Also a common-ground definition of Wine tourism appears to be brought by authors dealing

with wine tourism experience (Mitchell et al., 2000) and more updated definitions coming

from authors dealing with wine tourism and region development (e.g., Getz & Brown, 2004;

Jaffe & Pasternak, 2004; Getz & Brown, 2006). The evolving nature of this concept has

extended besides the traditionally notion of travelling around wine-producing regions

towards a more aesthetic and experiential dimension. According to Williams (2001) ‘"there

is a need to focus greater attention on identifying those experiential attributes which bind

the various physical components of the wine tourism experience together’’. I believe this

new trend towards wine tourism will help identify more experiences and destinations

specifically tailored to certain types of tourists. In relation to this, the concept of Destination

Management had shed some light as tourism organizations try to coordinate and combine

the functionalities and offerings of local stakeholders in order to create a consistent brand

and increase destination reliability. On this subject research by Buhalis and Cooper (1998)

initiated a path towards the notion of a holistic view on tourism products. As tourism

destinations gained importance literature bloomed in regards to the complexity of

destination management networks and organizations. (Buhalis, 2000; Weaver and

Oppermann, 2000). In the same way Zehrer and Stickdorn (2009) stated, "Holistic

destination management is crucial for a sustainable tourism success".

Following this idea, the 4E’s model of the experience economy framework by Pine and

Gilmore’s (1999) provides a holistic view on wine tourism. In fact this theory has already

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been associated and re-adapted to wine tourism, providing a new theoretical direction.

Demonstrations of this application can be frame within the publication entitled "Experience

Economy constructs as a framework for understanding wine tourism" by Donna Quadri

Felitti and Ann Marie Fiore (2012). These two authors in the attempt to construct a

framework to understand wine tourism at an experiential level had made a clear

differentiation about how each realm of an experience could create categories for wine

tourism activities. It attempts to explain each categories and the kind of experience and the

implication with the tourist. What’s more, it has been a categorization and division of the

authors that has included or talked about wine tourism in these levels of experience.

Equally, in a recent attempt to measure the performance of wine tourism products in

several regions in the world, a study have been carried out based on data analysis

recovered from an international survey launched by the GWCGN. One of the findings is the

clear contrast between Bordeaux and other wine destinations like Mendoza, Mainz,

Firenze, Porto and Cape Town (Group 1). It was found that these regions’ wine tourism

products put more emphasis on a holistic tourism experience, aiming at creating an

emotional attachment with the user and a strong relationship with tour operators; instead

Bordeaux wineries put their emphasis on investing on the cultural and historical aspect and

reputation of their wines, leveraging on it regional capital (Bouzdine-Chameeva, Durrieu,

Faugère, Pesme, 2013). As the authors outline, wineries within wine regions of ‘Group 1’

perform better when they incorporate and adapt some few strategies from the traditional

wine tourism, as seen in Bordeaux, and also on the other way around happens to be valid

to incorporate strategies such as employee training, service improvements, online visibility,

to improve business performance and service quality.

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METHODOLOGY

1) Explore-define

2) Design-validate

This study has been developed through two complemented stages. The first, an explorative

stage that has been carried out simultaneously with the literature revision pursuing

theoretical insights. In this stage a questionnaire was sent to 58 managers, owners and

employers of Mendoza wineries, in order to figure out their current wine tourism situation in

all the service periods. As I needed to go deep into a field research, I inquired about the

possibility of visiting the wineries to get in contact with tourists and other stakeholders. Few

wineries were interested in hosting me in order to work from inside the wine tourism

experience. Therefore, I chose 3 wineries based on a convenience factor and the level of

embracing a holistic approach towards the touristic product. This stage had the aim of

collecting an initial qualitative audit (characterization of the tourist, assessment of the

experience and innovation opportunities) of the service proposition and status. In this same

stage I conducted an immersive fieldwork where I had the opportunity to work with a

sample of 26 tourists in total, where they were asked about their expectations towards the

wine tourism experience, based on the 4 realms of the experience economy framework by

Pine & Gilmore (1999). What’s more, I mapped the experience by evidencing the customer

journey touchpoints in a wine tour. I applied different service design tools to explore the

experiences such as shadowing, ethnography, customer journey, personas and service

prototyping respectively in the Vistalba, Zuccardi and Atamisque wineries to collect

insights. It is important to say that this research has an explorative approach, and has been

iterative in all its stages, following the principle methods of service design thinking.

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On the second stage, I conducted the last validation survey. I sent it by mail to 133 wineries

and 45 tourists to study the importance of evidencing customer satisfaction and how this

could represent an advantage to design services. It also seeked to demostrate the

relevance of a new application called ‘My Winescape Journal’. A prototype of a tool

designed with the purpose of evaluating and re-constructing the customer experience. It

seeks for innovation in the way wineries meet their tourist’s preferences and expectations

and evidence levels of satisfaction of the services provided in different periods of the wine

tours. (see Full Report for more details about ‘My Winescape Journal’ project)

RESULTS

The first questionnaire sent by email to 58 wineries of Mendoza was focused on the three

periods of the service offer, previous to the experience (booking, expectations, searching,

decisions, preparation, anticipation) during the experience (experiencing, enjoying, on-site

buying, on-site evaluation, short-term decisions) and post-experience (sharing, evaluating,

memories, brand loyalty building and spreading). The most relevant results are shown in

the following figures (1,2,3):

Pre-experience

Figure 1: How do tourists arrive/ get to know the wineries

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Figure one shows that the mayority of tourists are mainly linked to wineries through tourism

operators. And according to another inquire about the relationship between them, it was

found that 80% of the wineries showed a good and necessary relationship with a tour

operator/agency, whilst 10% did not have any relationship and the other 10% had a bad

relationship.

According to the services offered by this wineries (taking into consideration that all the

wineries contacted were able to host tourism) we can see in Figure 2 that they all offer

experiences related to guided wine tours and tastings, some of them include the outside of

the winery, and not just the cellar-door. Wine purchase at the winery is a very important

channel for their wine sales. Some of the wineries’ strategies include restaurants and

food/wine pairings. Other activities and services offered are cycling tours, cooking classes,

art galleries, olive oil tasting, golf, harvesting grapes, horse riding, picnics and concerts in

the vineyards.

Experience

Figure 2: Most popular wine tourism services offered by wineries

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Post-Experience

Figure 3: Evaluation of customer satisfaction in wineries

Figure 3 shows a lack of gathering customer feedback after the wine tour. While 76% of the

wineries don`t keep in touch with their tourists or evaluate customer satisfaction, the rest

24% do it through suggestions book, comments, email, newsletters and social networks.

The second part of this first stage had the aim of collecting insights from the

3 wineries cases and tourists experiences analysed with service design tools. In order to

summarize results (see Table 1), I explored and characterized the existing offer and

experience provided. This assesment consists in potential recommendations on how to

tackle problems or find opportunities in the service periods in order to redesign them.

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Table 1: Wineries case studies summary

What’s more, the tourists were asked about the expectations of their wine tourism

experience, according to their level of interest on different wine tourism activities,

cathegorized within the four realms of the experience economy framework by Pine &

Gilmore (1999) entertainment, education, escapist and aesthetics.

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Table 2: Tourists evaluation of wine experiences

Table 2 indicates that tourists are motivated to travel to Mendoza for ‘guided wine tours and

tastings’ highlighting this item as the most important experience with a 90,1% of positive

interest from the respondents. Second and third item: ‘consumption of the winescape’ in the

aesthetic level with 88% and ‘wine routes and signage’ with the 87%. Less important

activities were cultural events (51,3%) and escapist active participation, like vineyard horse

riding (50%) However, none of the wine tourism activities or items experienced in Mendoza

was ‘not interesting’. This analysis pointed out the necessity of focusing on the activities

that create more expectations in the tourist.

During the second stage, according to the insights obtained on the first stage, a design

prototype was created with the aim of gathering service insights of the tourists during the

customer journey and diseminating the wine tours’ experiences through online channels.

Therefore, the prototype of ‘My Winescape Journal’ was tested through an online survey

showing a positive result of the main features offered by the tool.

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By wineries

By tourists

Figure 4: Service periods of the experience

wineries would measure

Figure 5: Use of the ‘My winescape Journal’ platform

with the narrative data collected by tourists to

improve their services.

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Figure 6: Use of technologies during touristic experiences

Figures 4 and 5 show the interest and curiosity of the wineries to use such tool to measure

customer satisfaction, as they would use it in their wineries to improve all their service

moments.

Figure 6 shows that tourists in Mendoza make use of new technologies very often. The

technology item less used by travelers was ‘tourism applications’. However, 100% of the

respondents said they would use an application to evaluate an experience in a winery and

the motivations were, in first place, to compare experiences with different wineries and to

keep their memories from the special moments of the experience (see Figure 7).

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Figure 7: Motivations to use ‘My Winescape Journal’ app

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CONCUSIONS AND IMPLICATIONS FOR GREAT WINE CAPITALS

There are few research attempts to empirically validate wine tourism experiences from the

customer’s point of view. This research followed the methods of service design thinking,

with the intention of drawing recommendations for innovative solutions to existing

problems/opportunities in Mendoza’s wineries. This approach allowed me to evaluate

customer-centric and experience-oriented services associated with wine tourism. The

overall findings outstanded the importance of creating experiences for wineries cellar-

doors, tours in the vineyards and tastings; and put focus on the third period of the service.

The results showed that few wineries evaluate customer satisfaction in Mendoza.

Consequently, this gives pertinance to the application ‘My Winescape Journal’, giving this

promising tool a chance to takle the problem of receiving customer feedback, enabling

wineries to recontruct the tourist experience, evaluate weak points across the touchpoints

and re-design or improve the service moments. And at the same time, the content shared

by the tourists in real moment could benefit Internet presence of Mendoza’s wineries and

dissemination of this region.

The results also highlighted that the aesthetic dimension of Mendoza’s winescape is an

important component in the wine tourists expectations, but it’s difficult to understand how

this realm could be effectively enhanced. Thus, wine tourism stakeholders should optimize

the link within existing wine routes and improve signage and paths.

So, I would like to underline the following managerial implications:

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-The application of service design methods and tools had improved customer relationship

in-cellar. Giving a different approach in the way the wineries "perceived" their customers

and how to mapped and visualized their preferences.

-For the design of wine tourism experiences it is important to consider the emotional side of

the service, therefore it is fundamental to gather customer’s motivations and expectations

previously to the proposal of new service touchpoints.

-The period of gathering and disseminating customer satisfaction is crucial to deliver more

innovative services and provide new experiences.

-Web developers and mobile technologies manufacturer have an important role, providing

portable and permanent infrastructure in order to interact with wineries websites and app

tools. Therefore, Internet presence and content update is of high importance for wineries.

-Future scenarios to design services are recommended within the main realms of

aesthetics and entertainment to enhance customer experiences. Wine tourists are enriched

by sensual environments and more engage by performances, taking a more passive

participation when immersed in Mendoza’s wine country destination.

This study shows limitations in the samples of tourists, being difficult to co-work or conduct

workshops during the field research to gain more in-depth understanding of the tourist. It

might also be necessay to try the mobile application for real to see the acceptance of

certain tourists and the willing of wineries to use the platform and this information to

improve their services and customer journeys. Nevertheless, we have seen through the

validation survey the approval of this start-up idea prototyped and the interest of this project

to take place in Mendoza’s wineries, with the possibility to scale it up to other wine

destinations. The study was able to derive some success factors for future wine tourism

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experiences. Comparisons with other wine regions may enable researchers to reveal

benchmarks for the creation of memorable experiences in wine tourism.

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