S

M

Chapter 9
SERVI CE I NNOVATI ON
AND DESI GN
Objectives for Chapter
Service Development and Design

Describe the challenges inherent in service design
Present steps in the new service development
process
Show the value of service blueprinting and quality
function deployment (QFD) in new service design
and service improvement
Present lessons learned in choosing and
implementing high-performance service
innovations
Challenges
Risks of Relying on Words Alone to
Describe Services (Line Shostack)
Oversimplification
Incompleteness
Subjectivity
Biased Interpretation

Oversimplification
Words are not enough as service system is
complex
Vacation trip = pleasing but how pleasing

Incompleteness

Omitting the unfamiliar elements

Flight Delay

Subjectivity

Description is influenced by

Previous experience and
exposure to the service

IUB faculty / Management

Interpretation

Single service dimension is interpreted differently

Responsiveness ((sensitive, alert)

Confusion / description risks should be
eliminated

Types of New Service
New service !!! May be not completely new

Major Innovation: New service is undefined

New service meeting same Generic Need

New service for currently served market


Types of New Service (Cont.)

Service Line Extension: Augmentation
Regent Air, IUB

Service improvement / Up gradation
Faster Execution / Extended Hours of Operation

Style Change
Visible attributes > perception
Figure 8-2
New Service Development Process
Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.
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
Front End
Planning
Implementation
Figure 8-3
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
Figure 8-4

Service Blueprinting

Success of New Service Development depends on
portraying an useful Blueprint.
Figure 8-4

Service Blueprinting

Map of the Service Process.

Process of service delivery
Roles of employees and Customers
Evidence / visible elements

Figure 8-4

Service Mapping/Blueprinting
A tool for simultaneously depicting the service
process, the points of customer contact, and the
evidence of service from the customers point of
view.
Service
Mapping
Process
Points of Contact
Evidence
Service Blueprint Components


CUSTOMER ACTIONS
ONSTAGE CONTACT EMPLOYEE ACTIONS
BACKSTAGE CONTACT EMPLOYEE ACTIONS
SUPPORT PROCESSES

Service Blueprinting

Customer Action:

Steps / Interactions / activities /choices of
customers.

Service Blueprinting

Onstage Contact Employee Action:

Steps / activities of contact employees that are
visible.

Service Blueprinting

Backstage Contact Employee Action:

Steps / activities of contact employees that are
not visible.

Service Blueprinting

Support Process:

Internal Steps / activities / actions to support
the contact employees.
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
Driver
Picks
Up Pkg.
Dispatch
Driver
Airport
Receives
& Loads
Sort
Packages
Load on
Airplane
Fly to
Destinatio
n
Unload
&
Sort
Load
On
Truck
Express Mail Delivery Service
S
U
P
P
O
R
T

P
R
O
C
E
S
S

C
O
N
T
A
C
T


P
E
R
S
O
N

(
B
a
c
k

S
t
a
g
e
)

(
O
n

S
t
a
g
e
)

C
U
S
T
O
M
E
R

P
H
Y
S
I
C
A
L

E
V
I
D
E
N
C
E

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
Overnight Hotel Stay
S
U
P
P
O
R
T

P
R
O
C
E
S
S

C
O
N
T
A
C
T

P
E
R
S
O
N

(
B
a
c
k

S
t
a
g
e
)

(
O
n

S
t
a
g
e
)

C
U
S
T
O
M
E
R

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
P
H
Y
S
I
C
A
L

E
V
I
D
E
N
C
E

Figure 8-8
Building a Service Blueprint
Step 1

Identify the
process to
be blue-
printed.
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
back-stage.
Step 5

Link customer
and contact
person
activities to
needed
support
functions.
Step 6

Add
evidence of
service at
each
customer
action step.