McGraw-Hill© 2000 The McGraw-Hill Companies 1 S M S M McGraw-Hill © 2000 The McGraw-Hill Companies Part 3 ALIGNING STRATEGY, SERVICE DESIGN AND STANDARDS

McGraw-Hill© 2000 The McGraw-Hill Companies 2 S M CUSTOMER COMPANY GAP 2 Customer-Driven Service Designs and Standards Company Perceptions of Consumer Expectations Provider GAP 2 Part 3 Opener

McGraw-Hill© 2000 The McGraw-Hill Companies 3 S M S M McGraw-Hill © 2000 The McGraw-Hill Companies Chapter 8 SERVICE DEVELOPMENT AND DESIGN

McGraw-Hill© 2000 The McGraw-Hill Companies 4 S M Objectives for Chapter 8: 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

McGraw-Hill© 2000 The McGraw-Hill Companies 5 S M Figure 8-1 Risks of Relying on Words Alone to Describe Services Oversimplification Incompleteness Subjectivity Biased Interpretation

McGraw-Hill© 2000 The McGraw-Hill Companies 6 S M Figure 8-2 New Service Development Process Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal  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

McGraw-Hill© 2000 The McGraw-Hill Companies 7 S M Figure 8-3 New Service Strategy Matrix for Identifying Growth Opportunities Markets Offerings Existing Services New Services Current CustomersNew Customers SHARE BUILDING DIVERSIFICATION MARKET DEVELOPMENT SERVICE DEVELOPMENT

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 customer’s point of view. Service Mapping Process Points of Contact Evidence McGraw-Hill © 2000 The McGraw-Hill Companies

McGraw-Hill© 2000 The McGraw-Hill Companies 9 S M 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

McGraw-Hill© 2000 The McGraw-Hill Companies 10 S M 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 SUPPORT PROCESS CONTACT PERSON (Back Stage) (On Stage) CUSTOME R PHYSICAL EVIDENCE 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

McGraw-Hill© 2000 The McGraw-Hill Companies 11 S M Overnight Hotel Stay SUPPORT PROCESS CONTACT PERSON (Back Stage) (On Stage) CUSTOMER Hotel Exterior Parking Cart for Bags Desk Registration Papers Lobby Key Elevators Hallways Room Cart for Bags Room Amenities Bath MenuDelivery 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 PHYSICAL EVIDENCE

McGraw-Hill© 2000 The McGraw-Hill Companies 12 S M Figure 8-8 Building a Service Blueprint Building a Service Blueprint Step 1 Identify the process to be blue- printed. Step 1 Identify the process to be blue- printed. Step 2 Identify the customer or customer segment. Step 2 Identify the customer or customer segment. Step 3 Map the process from the customer’s point of view. Step 3 Map the process from the customer’s point of view. Step 4 Map contact employee actions, onstage and back- stage. Step 4 Map contact employee actions, onstage and back- stage. Step 5 Link customer and contact person activities to needed support functions. Step 5 Link customer and contact person activities to needed support functions. Step 6 Add evidence of service at each customer action step. Step 6 Add evidence of service at each customer action step.

McGraw-Hill© 2000 The McGraw-Hill Companies 13 S M Application of Service Blueprints New Service Development concept development market testing Supporting a “Zero Defects” Culture managing reliability identifying empowerment issues Service Recovery Strategies identifying service problems conducting root cause analysis modifying processes

McGraw-Hill© 2000 The McGraw-Hill Companies 14 S M Blueprints Can Be Used By: Service Marketers –creating realistic customer expectations service system design promotion Operations Management –rendering the service as promised managing fail points training systems quality control Human Resources –empowering the human element job descriptions selection criteria appraisal systems System Technology –providing necessary tools: system specifications personal preference databases