CH 7 Service

CHAPTER 7
SERVICE DESIGN AND

DEVELOPMENT
The concept of design
• Decisions have to be made in respect of color, styling, durability,
reliability, materials, cost of manufacture and so on.
• Service design therefore, should encapsulate all aspects of that
experience:-
 The role of the customer

The impact of technology, e.g. the involvement of equipment
The location of service consumption (e.g. a fixed single facility, multi-
site, mobile)
Employee skills/behavior and degree of discretion
 The nature of the service process, e.g. standardized, customized
The significance of procedures
The nature and channels of communication
The contribution of the physical evidence to service satisfaction
How design advances operational efficiency and service quality.
NEW SERVICE DEVELOPMENT
• Service concept is a detailed description of what is to be done for the
customer and how this is to be achieved
• A service can be termed as a new service when it is innovative,
created and offered by the company to the world for the first time.
• Some new services are adaptive replacements. They are the improved
versions of the existing service product either in technology, style,
status or performance.
Categories of new service
• i) Style: It represents the simplest type of innovation, involving no
changes in either processes or performance.
• However they often are highly visible, create excitement, and may
serve to motivate employees
• For example, changing the color scheme of a restaurant, revising the
logo for an organization or redesigning a website
ii) Service improvements: It is the most common type of innovation.
• It involves modest changes in the performance of current products,
including improvements to either the core product or to existing
supplementary services.
• iii) Supplementary service innovations: It take the form of adding
new facilitating or enhancing service elements to an existing core
service or of significantly improving an existing supplementary
service.
• Multiple improvements may have the effect of creating what
customers perceive as an entirely new experience, even though it is
built around the same core.
• For example, cafes are design to keep customers entertained with
aquariums, waterfalls, monkeys and complete with lightening.
• iv) Service-line extension: It represent augmentations of the existing
service line, such as restaurant adding new menu item, airline offering
new routes, a law firm offering additional legal services and an
university adding new courses or degrees.
• vii) Start up businesses: This consists of new services for a market
already served by existing products that meet the same generic
needs.
• For example, on line banking for financial transactions.
• Service development is different why?

New Service Development Stages
• 1. Idea Generation: The main point of idea generation is to find, in a
structured, goal oriented manner, new ways to service the customer
in a meaningful way.
• An innovative organization conducts a formal search of the market for
new service ideas.
Sources of New Service Ideas
• New service ideas are available from internal as well as external

sources which are explained in the following
• External sources and internal sources ?
Trade customers, Intermediaries, Consumer feedback, Complaints
Customers
and Suggestions.
Competitors Imitation, Improvements/Enhancements,
Specialist Consultants, Market research agencies
Others Suppliers, Joint ventures

• 2. Screening:
• 3. Concept Development and Testing: Concept Development means
the translation of an idea into description form in accurate terms.
Concept Development is especially difficult for service firm because of
the specific characteristics of service.
• A popularly used technique for development of service concept is
‘service blueprinting’.
• It provides a clear picture of service process to different people
involved in service production and consumption.
• 4. Business Analysis: The ideas which appear attractive to the
market are then subject to more detailed analysis.
• This allows the company to assess the market size, potential sales,
and revenue against development and launch costs.
• The use of sensitivity costing will be applied at this stage, where a
series of adjustments are made to factors such as price, packaging
and customer take- up, and revenue implications evaluated.
• On this basis minimum and maximum revenue potential will be
projected.
• 5. Service Development: This is also the stage at which promotion,
distribution and pricing strategies are developed.
• The development stage involves production of prototype or sample of
new offering.
• For example, in banking sector, the development phase of new
savings product would require the modification of savings computer
system by programming staff, the design of forms and documents to
be used in setting up the accounts, branch staff to follow in
completing the forms and processing them.
• 6. Test Marketing: Now the services are ready for sale.
• To know how the service offer could really provide satisfactory
experiences, it is necessary to test it among different groups of
customers.
• 7. Commercialization: The new service developed is now offered for

the sale.
• At this stage the service firms have to incur huge costs, particularly in
external marketing.
• The major task is to create awareness in the market and persuade the
target market to use the service.

CH 7 Service

Uploaded by

Copyright:

Available Formats

CH 7 Service

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CH 7 Service

Uploaded by

Copyright:

Available Formats

CHAPTER 7

SERVICE DESIGN AND

 The role of the customer

• Service development is different why?

• New service ideas are available from internal as well as external

Competitors Imitation, Improvements/Enhancements,

Specialist Consultants, Market research agencies

Others Suppliers, Joint ventures

• 7. Commercialization: The new service developed is now offered for

You might also like