MKT 4050 Chapter 8 (Service Innovation and Design)

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Services Marketing
Chapter 8
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1

Challenges of service innovation and design

risks in describing services in words alone: oversimplification, incompleteness, subjectivity, and biased interpretation.

2

Oversimplification

words are simply inadequate to describe a complex service system.

3

Incompleteness

in describing services, people tend to omit details or elements of the service with which they were not familiar.

4

Subjectivity

any one person describing a service in words will be biased by personal experiences and degree of exposure to the service.

5

Biased interpretation

now two people will define " responsive," "quick," or "flexible" in exactly the same way.

6

Involve Customers and Employees

because services are produced, consumed, and co-created in real time and often involve interaction between and among employees and customers, it is critical that innovation and new service development processes involve both employees and customers.

7

Employ service design thinking and techniques

services often occur as a sequence if interrelated steps and activities and engage a number of people, processes, and tangible elements.

8

5 principles of design

user-centered, co-creative, sequencing, evidencing, and holistic.

9

User-centered

services should be experienced and designed through the customer's eyes

10

Co-created

all stakeholders should be included in the service design process.

11

Sequencing

a service should be visualized as a sequence of interrelated actions.

12

Evidencing

Intangible services should be visualized in terms of physical artifacts.

13

Holistic

The entire environment of a service should be considered.

14

Types of service innovation

major or radical innovations, start up businesses, new services for a currently served market, service line extensions, service improvements, and style changes.

15

Major or radical innovations

new services for markets as yet undefined. examples: FedEx and Skype

16

Start-up businesses

consists of new services for a market already served by existing products that meet the same generic needs. example: Gentle Giant Moving Company

17

New services for the currently served market

represent attempts to offer existing customers of the organization a service not previously available from the company. example: Pet Smart's Pet Hotels

18

Service line extensions

represent augmentations of the existing service line, such as a restaurant adding new menu items such as an airline offering new routes. examples: McCafe

19

Service improvements

represent perhaps the most common type of service innovation, changes in features of services already offered might involve faster execution of an existing service process. such as extended hours. example: Blockbuster

20

Style changes

represent the most modest service innovations, although they are often highly visible and can have significant effects on customer perceptions, emotions, and attitudes. example: UPS, Burger King, Wendy's, and Starbucks

21

Front end planning

business strategy development or review, new service strategy development, idea generation, service concept development and evaluation, and business analysis.

22

Business strategy development or review

the new service strategy and specific new service ideas must fit within the larger strategic mission or vision of the organization.

23

new service strategy development

research suggest that a product portfolio strategy and a defined organizational structure for new product or service development are critical and are the foundations for success.

24

Idea generation

formal brainstorming, solicitation of ideas from employees and customers, lead user research, and learning about competitors' offering are some of the most common approaches.

25

Service concept development and evalution

Drawing pictures and describing an intangible service in concrete terms are difficult, particular when the service is not standardized and may be co-created in real time with customers.

26

Business analysis

the development of service concepts is so closely tied to the operation system of the system of the organization, this stage will involve preliminary assumptions about the costs of personnel hiring and training, delivery system enhancements, facility changes, and any other projected operations costs.

27

Implemenations

service prototype development and testing, market testing, commercialization, and post introduction evaluation.

28

Service prototype development and testing

during this phase, the concept is refined to the point at which a detailed service blueprint illustrating the customer experience and the implementation plan for the service can be produced.

29

Market Testing

because new service offerings are often intertwined with the delivery system for existing services, it is difficult to test new services in isolation.

30

commercialization

this service goes live and is introduced to the marketplace and has two primary objectives. building and maintaining acceptance of the new service among the large number of the service delivery personnel who will be responsible day to day for service quality and monitor all aspects of the service during introduction and through the complete service cycle.

31

Post introduction evaluation

no service will ever stay the same, whether deliberate or unplanned, changes will always occur so formalizing the review process to make those changes that enhance service quality from the customer's point of view is critical.

32

Service blueprint

a picture or map that portrays the customer experience and the service system, so that the different people involved in providing the service can understand it objectively, regardless of their roles or their individual points of view.

33

Blue print components

customer actions, onstage/visible contact employee actions, onstage technology actions, backstage contact employee actions, support process, physical evidence, lines of interaction of visibility and of internal interaction, arrows, failpoints, and decisions.

34

Customer actions

the steps, choices, activities, and interactions that the customer performs in the process of purchasing, experiencing, and evaluating service.

35

Onstage/ visible contact employee actions

the activities that the contact employee performs that are visible to the customer.

36

Onstage technology actions

support the onstage employee actions.

37

Backstage contact employee actions

those contact employee actions that occur behind the scenes to support the onstage activities.

38

Support process

covers the internal services, steps, and interactions that take place to support the contact employees in delivering the service.

39

Physical evidence

typically above each point of contact, the physical items in the environment of the the service.

40

Line of interaction

represents direct interactions between the customer and the organizations.

41

Line of visibility

separates all service activities visible to the customer from those not visible.

42

Line of internal interaction

separates customer contact employee activities from those of other service support activities and people.

43

Arrows

connecting actions throughout the blueprint.

44

Failpoints

a step or stage in a process that cause the entire process to slow down or stop.

45

Decisions

the selection of a belief or a course of action among several alternative possibilities in a step or stage of the process.

46

Building a blueprint

identify process to be blueprinted, identify the customer or customer segment, map the process for the customer point of view, map contact employee (or technology) actions, link contact activities to needed support functions, and add evidence of service at each customer action.