Lecture 5

09 08 2009

Service Development and Design

• For a good service idea to succeed, it is important to focus on development, design and specification of service.

• To develop or launch a new service, the following characteristics need to be studied in detail:

(a) Service characteristics: -meeting the need of the customer -advantage over the competitors in the

market. -technological edge.

(b) Strategy characteristics: -dedicated workforce who believe in the

new service -dedicated R&D focus on the new service

initiative.

(c) Process characteristics:

-marketing

-predevelopment

-technological and launch proficiencies

(d) Marketplace characteristics:

-relates to the market potential of the new service

CHALLENGES

• It is difficult to describe services verbally due to the intangible and heterogeneous characteristics of services.

The risks involved are

(1) oversimplification

(2) incompleteness

(3) subjectivity

(4)biased interpretation

NEW SERVICE DEVELOPMENT

• New services should be developed in a systematic step by step framework, which

-must be objective, not subjective.

-must be precise, not ambiguous.

-must be based on facts, not on opinions.

-must be methodological, not philosophical

-major innovations

-startup business

-new services for the currently served market

-service line extensions

-service improvements

-style changes

TYPES OF NEW SERVICES

New Service Development Process

New Service Strategy Matrix

Market Development

Diversification

Existing Service

New Service

MarketsOfferings

Current Customers New Customers

Share Building

Service Development

SERVICE BLUEPRINTING

• It is a pictorial representation that accurately portrays the service system so that it can be easily understood.

• It visually displays the service by depicting the various processes involved in the service delivery, points of customer contact, the roles of customer and employees etc.

• Components of service blueprint:

In the diagramatic representation the components could be are the:-

-customer actions area

-onstage contact employee action area

-backstage contact employee action area

-support process

• Building a Blueprint:(a) Identify the process to be blueprinted(b) Identify the customer or customer

segment.(c) Map the process from the customer’s

point of view.(d) Map contact employee actions, onstage

backstage and technological actions.(e) Link contact activities to needed support

functions.(f) Add evidence of service at each customer

action step.

Blueprint for Hotel stay service

Line of interaction

Line of visibility

Line of internal visibility

Customer Defined Service Standards

Requirements of effective Service Standards

• Standardization of Service Behaviors & Actions– Through technology– Improvement in work methods– Both

• Formal Service targets & goals– Specific, quantified measurable service goals

• Customer – Not Company - Defined standards

The type of standards that close GAP 2 are

Customer Defined Standards

Gaps Model of Service Quality

Company perceptions of consumer expectations

Perceivedservice

Perceivedservice

Expectedsevice

Expectedsevice

External communicationsto customers

Customer-driven service designsand standards

Service delivery

Gap 4

Customergap

Gap 2

Gap 3

Customer

Company

gap 1

Types of Customer-Defined Standards

• “HARD” Customer-Defined Standards

• “SOFT” Customer-Defined Standards

• One-Time Fixes

• Building Blocks– Service encounters are the building blocks of

service quality

“HARD” Customer Defined Standards

• Counted, timed or observed through audits

• Eg.Dell Computer Customer Priorities Customer Defined Standard

On Time delivery STT

Computer works properly IFIR, OTFTF

“SOFT” Customer Defined Standards

• Can be quantified by measuring customer perceptions & beliefs

• Provide Direction, guidance and feedback

• Eg. American ExpressCustomer Priorities Customer Defined StandardResolution of Problem Resolve problem at first contact

Take all the time necessaryTreatment Listen, do everything possible to help

Courtesy of representative Put card member at ease Address card member by first name

One- Time Fixes and Waiting in Line

• These are technology, policy or procedure changes that when instituted address customer requirements

• Accomplished by hard technology

• Single Line vs. Multiple waiting line• The Airline way• The McDonald Way• The Indian Railways way

Process for setting Customer-Defined Standards

Employee monitoring

P- D- C -A

Select Behaviors & Actions for Standards

• The standards are based on behaviors & actions that are important to customers

• The standards cover performance that needs to be improved or changed

• The standards cover behaviors & actions employees can improve

• The standards are accepted by employees• The standards are predictive rather than reactive• The standards are challenging but realistic

Case Study Discussions

Gp 2, 3 & Gp 4

Thank You