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MKT 4050 Chapter 8 (Service Innovation and Design)

front 1

Challenges of service innovation and design

back 1

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

front 2

Oversimplification

back 2

words are simply inadequate to describe a complex service system.

front 3

Incompleteness

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

front 4

Subjectivity

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

front 5

Biased interpretation

back 5

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

front 6

Involve Customers and Employees

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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.

front 7

Employ service design thinking and techniques

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

front 8

5 principles of design

back 8

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

front 9

User-centered

back 9

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

front 10

Co-created

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all stakeholders should be included in the service design process.

front 11

Sequencing

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

front 12

Evidencing

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Intangible services should be visualized in terms of physical artifacts.

front 13

Holistic

back 13

The entire environment of a service should be considered.

front 14

Types of service innovation

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

front 15

Major or radical innovations

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

front 16

Start-up businesses

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

front 17

New services for the currently served market

back 17

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

front 18

Service line extensions

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

front 19

Service improvements

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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

front 20

Style changes

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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

front 21

Front end planning

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

front 22

Business strategy development or review

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

front 23

new service strategy development

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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.

front 24

Idea generation

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

front 25

Service concept development and evalution

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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.

front 26

Business analysis

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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.

front 27

Implemenations

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

front 28

Service prototype development and testing

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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.

front 29

Market Testing

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

front 30

commercialization

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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.

front 31

Post introduction evaluation

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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.

front 32

Service blueprint

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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.

front 33

Blue print components

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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.

front 34

Customer actions

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

front 35

Onstage/ visible contact employee actions

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

front 36

Onstage technology actions

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support the onstage employee actions.

front 37

Backstage contact employee actions

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

front 38

Support process

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

front 39

Physical evidence

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

front 40

Line of interaction

back 40

represents direct interactions between the customer and the organizations.

front 41

Line of visibility

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

front 42

Line of internal interaction

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

front 43

Arrows

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connecting actions throughout the blueprint.

front 44

Failpoints

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

front 45

Decisions

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

front 46

Building a blueprint

back 46

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.