1. McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 8
Service Processes

3. OBJECTIVES Service Strategy: Focus & Advantage
8-3
OBJECTIVES
Service Strategy: Focus & Advantage
Service-System Design Matrix
Service Blueprinting
Service Fail-safing
Characteristics of a Well-Designed Service Delivery System 2

4. 8-4
Service Businesses
A service business is the management of organizations whose primary business requires interaction with the customer to produce the service
Facilities-based services: Where the customer must go to the service facility
Field-based services: Where the production and consumption of the service takes place in the customer’s environment 5

5. The Customer Centered View
8-5
The Customer Centered View
The Service
Strategy
The
People
Systems
A philosophical view that suggests the organization exists to serve the customer, and the systems and the employees exist to facilitate the process of service.
The
Customer 7

6. Service-System Design Matrix
8-6
Service-System Design Matrix
Exhibit 7.6
Degree of customer/server contact
Buffered
Permeable
Reactive
High
core (none)
system (some)
system (much)
Low
Face-to-face
total
customization
Face-to-face
loose specs
Sales
Opportunity
Production
Efficiency
Face-to-face
tight specs
Phone
Contact
Internet &
on-site
technology
Mail contact
Low
High 9

7. 8-7
Characteristics of Workers, Operations, and Innovations Relative to the Degree of Customer/Service Contact

8. Example of Service Blueprinting
8-8
Example of Service Blueprinting 11

9. Service Fail-safing Poka-Yokes (A Proactive Approach)
8-9
Service Fail-safing Poka-Yokes (A Proactive Approach)
Keeping a mistake from becoming a service defect
How can we fail-safe the three Ts?
Task
Tangibles
Treatment 13

10. Three Contrasting Service Designs
8-10
Three Contrasting Service Designs
The production line approach (ex. McDonald’s)
The self-service approach (ex. automatic teller machines)
The personal attention approach (ex. Ritz-Carlton Hotel Company) 15

11. Managing Customer Introduced Variation
8-11
Managing Customer Introduced Variation
Arrival variability
Request variability
Capability variability
Effort variability
Subjective preference variability 15

12. Accommodation Strategies
8-12
Accommodation Strategies
Classic accommodation
Low cost accommodation
Classic reduction
Uncompromised reduction

13. Characteristics of a Well-Designed Service System
8-13
Characteristics of a Well-Designed Service System
1. Each element of the service system is consistent with the operating focus of the firm
2. It is user-friendly
3. It is robust
4. It is structured so that consistent performance by its people and systems is easily maintained 17

14. Characteristics of a Well-Designed Service System (Continued)
8-14
Characteristics of a Well-Designed Service System (Continued)
5. It provides effective links between the back office and the front office so that nothing falls between the cracks
6. It manages the evidence of service quality in such a way that customers see the value of the service provided
7. It is cost-effective 18

15. Applying Behavioral Science to Service Encounters
8-15
Applying Behavioral Science to Service Encounters
The front-end and back-end of the encounter are not created equal
Segment the pleasure, combine the pain
Let the customer control the process
Pay attention to norms and rituals
People are easier to blame than systems
Let the punishment fit the crime in service recovery 8

16. Service Guarantees as Design Drivers
8-16
Service Guarantees as Design Drivers
Recent research suggests:
Any guarantee is better than no guarantee
Involve the customer as well as employees in the design
Avoid complexity or legalistic language
Do not quibble or wriggle when a customer invokes a guarantee
Make it clear that you are happy for customers to invoke the guarantee

17. Which of the following is an example of a Service Business?
8-17
Question Bowl
Which of the following is an example of a Service Business?
Law firm
Hospital
Bank
Retail store
All of the above
Answer: e. All of the above 7

18. Answer: d. All of the above
8-18
Question Bowl
According to the Chase and Dasu (2001) study which of the following are behavioral concepts that should be applied to enhance customer perceptions of a service encounter?
Flow of the service experience
Flow of time
Judging encounter performance
All of the above
None of the above
Answer: d. All of the above 7

19. Answer: e. All of the above
8-19
Question Bowl
Service strategy development begins by selecting which of the following as an operating focus or performance priority?
Price
Quality
Variety
Treatment
All of the above
Answer: e. All of the above 7

20. Listening to the customer
8-20
Question Bowl
Which of the following “best practices emphasized by service executives” had the highest mean emphasize rating?
Leadership
Accessibility
Quality values
Customer orientation
Listening to the customer
Answer: b. Accessibility (Had the highest mean rating at 4.02 on a 5 point scale.) 7

21. Face-to-face loose specs Phone contact Internet and on-site technology
8-21
Question Bowl
Based on the Service-System Design Matrix, which of the following has a lower level of “production efficiency”?
Face-to-face loose specs
Phone contact
Internet and on-site technology
Face-to-face tight specs
Mail contact
Answer: a. Face-to-face loose specs 7

22. 8-22
End of Chapter 8