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SABYASACHI

Chapter 8
Service Development and
Design
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Challenges of Service
Design
Lynn Shostack, (Four risks in services)
Oversimplification
Simplification is difficult as it is intangible. (diagnosis)
Incompleteness
Since services are complex process, so people tend to avoid
details. (ATM)
Subjectivity
Services are biased by personal experiences.
Biased interpretation
No two people will define service in one way. Responsive,
quick or flexible.
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New Service Development
New service development system have four
basic characteristics:

1. It must be objective, not subjective
2. It must be precise, not vague
3. It must be fact driven, not opinion driven
(justified foundation)
4. It must be methodological, not
philosophical
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New Service Development
Major Innovation
Start up business
New services
Service line extension
Service improvement
Style change
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Types of New Services
Major innovation:
Major innovations are new service for markets as
yet undefined. e.g. FedEx.

Start-up business:
Start-up business consist of new service for the
market that is already served by existing products
that meet the same generic needs. e.g. online
Banking .
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Types of New Services
New Service for the currently served market:
New Service for the currently served market
represent attempts to offer existing customers of
the organization a service not previously available
from the company. e.g. airlines offering fax,
phone, online service.
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Type of new Services
Service line extension:
Service line extension represent augmentations of
the existing service line. e.g. Restaurants adding
new menu items, airline offering new routes.

Service improvements:
Service improvements represent the most common
type of service innovation. Changes in features of
service that are already offered might involve faster
execution of an existing service process e.g. 24
hours Banking or library.
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Type of new Services
Style changes:
Style changes represent the most modest service
innovations, although they are often highly visible
and can have significant effects on customer
perceptions, emotions and attitude.
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Service Redesign
Self service (production mode)
Direct service (home delivery)
Pre service (preadmission)
Bundled service (multiple services)
Physical service (services cape)
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Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.
Front End
Planning
Implementation
New Service Development
Process
Business Strategy Development or Review
New Service Strategy Development
Idea Generation
Concept Development and Evaluation
Business Analysis
Service Development and Testing
Postintroduction Evaluation
Commercialization
Market Testing
Screen ideas against new service strategy
Test concept with customers and employees
Test for profitability and feasibility
Conduct service prototype test
Test service and other marketing-mix elements
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Stage in New Service
Development
Business strategy: vision, mission, capabilities and
growth plan
New service strategy: product market expansion
matrix.
Idea generation (Brain storming , solicitation,
competitors and customer observation): library,
movie, food court.
Idea screening: on the basis of organizations basic
strategies.
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Stage in New Service
Development
Concept development: basic concepts of ideas
Concept testing: over consumers by focusing
benefits, rationality and process.
Business analysis: demand, revenue, cost and
operational feasibility analysis.
Service development and testing: service blueprint is
developed and tested.

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Stage in New Service
Development
Market testing: service is tested over a small group
of customers.
Commercialization: when, how and to whom
service will be introduced. acceptance of new
service among personnel and apply internal
marketing.
Post introduction evaluation: any changes in
service mixes if necessary.
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New Service Strategy Matrix for
Identifying Growth Opportunities
Markets
Offerings
Existing
Services
New
Services
Current Customers New Customers
Share Building
Diversification
Market Development
Service development
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Service Blueprinting
A service blueprint is a picture or map that
accurately portrays the service system so that the
different people involved in providing it can
understand and deal with it objectively regardless
of their roles or their individual point of view.

Process
Points of contact
Roles of employees
Evidence
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Service Blueprint Components
CUSTOMER ACTIONS
line of interaction
ONSTAGE CONTACT EMPLOYEE ACTIONS
line of visibility
BACKSTAGE CONTACT EMPLOYEE ACTIONS
line of internal interaction
SUPPORT PROCESSES
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Service Blueprint Components
Physical evidence
Customer actions
Line of interaction
Onstage Contact
employee action
Line of visibility
Backstage Contact
employee action
Line of internal interaction
Support processes
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Blue print Components
The customer action area:
Customer action area encompasses the steps,
choices, activities, and interactions that the
customer performs in the process of purchasing,
consuming and evaluating the service.

On stage employee actions:
Steps and activities that the contact employee
performs that are visible to the customer are the
onstage employee actions.
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Blue print Components
Back stage Contact employee action:
Those contact employee actions that occur behind
the scenes to support the onstage activities are
backstage contact employee actions.

The support processes:
The support process section of the blue print
covers the internal service, steps, and interactions
that take place to support the contact employees in
delivering the service.

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Blueprint Components
The four key action areas separated by the three
horizontal lines:

Line of interactions:
First the line of interaction representing direct
interactions between the customer and
organization.

Line of visibility:
This line separates all service activities that are
visible to the customer from those that are not
visible.


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Blueprint Components

Line of internal interaction:
Which separates contact employee activities from
those of the other service support activities and
people.

Physical evidence:
At the very top of the blueprint you see the
physical evidence of the service. Typically above
each point of contact the actual physical evidence
of the service is listed.
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Express Mail Delivery Service
Driver
Picks
Up Pkg.
Dispatch
Driver
Airport
Receives
& Loads
Sort
Packages
Load on
Airplane
Fly to
Destinatio
n
Unload
&
Sort
Load
On
Truck
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Customer
Calls
Customer
Gives
Package
Truck
Packaging
Forms
Hand-held
Computer
Uniform
Receive
Package
Truck
Packaging
Forms
Hand-held
Computer
Uniform
Deliver
Package
Customer
Service
Order
Fly to
Sort
Center
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Overnight Hotel Stay
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Hotel
Exterior
Parking
Cart for
Bags
Desk
Registration
Papers
Lobby
Key
Elevators
Hallways
Room
Cart for
Bags
Room
Amenities
Bath
Menu Delivery
Tray
Food
Appearance
Food
Bill
Desk
Lobby
Hotel
Exterior
Parking
Arrive
at
Hotel
Give Bags
to
Bellperson
Check in
Go to
Room
Receive
Bags
Sleep
Shower
Call
Room
Service
Receive
Food
Eat
Check out
and
Leave
Greet and
Take
Bags
Process
Registration
Deliver
Bags
Deliver
Food
Process
Check Out
Take Bags
to Room
Take
Food
Order
Registration
System
Prepare
Food
Registration
System
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Benefits of Service
Blueprinting
Provides an overview of the service and thus
reinforce a customer oriented focus among
employees.
Identifies fail points and reveals the areas requiring
improvement
Line of interactions sheds light on the customers
role in the service process
Line of visibility helps to develop physical
evidence in the services location.
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Benefits of Service
Blueprinting
Helps to improve quality through integrating the
different departmental functions
Stimulates strategic discussions by illuminating the
elements and connections that constitute the
service.
Provides a basis for identifying and assessing cost
revenue and capital invested in each element of the
service.
Facilitates top-down, bottom-up approach to
quality improvement
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Building a blueprint
Step 1: Identify the service process to be blueprinted.

Step 2: Identify the customer or customer segment.

Step 3: Map the process from the customers point of view.

Step 4: Map contact employee actions, onstage and
backstage and technology actions.

Step 5: Link contact activities to needed support functions.

Step 6: Add evidence of service at each customer action step.