1. Lecture 5 09 08 2009

2. Service Development and Design

3. 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:

4. (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.

5. (c) Process characteristics: -marketing -predevelopment -technological and launch proficiencies (d) Marketplace characteristics: -relates to the market potential of the new service

6. 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

7. 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

8. -major innovations -startup business -new services for the currently served market -service line extensions -service improvements -style changes TYPES OF NEW SERVICES

9. New Service Development Process

10. New Service Strategy Matrix

11. 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.

12. 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

13. 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.

14. Blueprint for Hotel stay service Line of interaction Line of visibility Line of internal visibility

15. Customer Defined Service Standards

16. 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

17. The type of standards that close GAP 2 are Customer Defined Standards

18. Gaps Model of Service Quality Perceived service Perceived service Expected sevice Expected sevice External communications to customers Customer-driven service designs and standards Service delivery Gap 4 Customer gap Gap 2 Gap 3 Customer Company gap 1

19. 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

20. “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

21. “SOFT” Customer Defined Standards Can be quantified by measuring customer perceptions & beliefs Provide Direction, guidance and feedback Eg. American Express Customer Priorities Customer Defined Standard Resolution of Problem Resolve problem at first contact Take all the time necessary Treatment Listen, do everything possible to help Courtesy of representative Put card member at ease Address card member by first name

22. 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

23. Process for setting Customer-Defined Standards Employee monitoring P- D- C -A

24. 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

25. Case Study Discussions Gp 2, 3 & Gp 4

26. Thank You