chapter 4 new service development. learning objectives 1. new service development process. 2....
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Chapter 4Chapter 4New Service New Service DevelopmentDevelopment
Learning ObjectivesLearning Objectives
1.1. New service development New service development process.process.
2.2. Service blueprinting.Service blueprinting.
3.3. Dimensions of divergence and Dimensions of divergence and complexity.complexity.
4.4. Taxonomy of service processes.Taxonomy of service processes.
5.5. Generic approaches to service Generic approaches to service system design.system design.
Levels of Service Levels of Service InnovationInnovation
I. Radical InnovationsI. Radical Innovations Major InnovationMajor Innovation Start-up BusinessStart-up Business New Services for the Market Presently New Services for the Market Presently
ServedServed
II. Incremental InnovationsII. Incremental Innovations Service Line ExtensionsService Line Extensions Service ImprovementsService Improvements Style ChangesStyle Changes
Technology Driven Service Technology Driven Service InnovationInnovation
Power/energyPower/energy Physical designPhysical design Materials Materials Methods Methods InformationInformation
Service Design Service Design ElementsElements
StructuralStructural- Delivery system- Delivery system- Facility design- Facility design- Location- Location- Capacity planning- Capacity planning
ManagerialManagerial- Service encounter- Service encounter- Quality- Quality- Managing capacity and demand- Managing capacity and demand- Information- Information
New Service New Service Development CycleDevelopment Cycle
People
Technology Systems
Product
Full Launch Development
Design Analysis
Org
aniz
atio
nal
Con
text Team
s
Tools
Enablers
• Formulation of new services objective / strategy• Idea generation and screening• Concept development and testing
• Business analysis• Project authorization
• Full-scale launch• Post-launch review
• Service design and testing• Process and system design and testing• Marketing program design and testing• Personnel training• Service testing and pilot run• Test marketing
Service Blueprint of Service Blueprint of Luxury HotelLuxury Hotel
Strategic PositioningStrategic Positioning Through Process Structure Through Process Structure
Degree of ComplexityDegree of Complexity
Measured by the number of steps in the Measured by the number of steps in the service blueprint. (clinic vs. hospital)service blueprint. (clinic vs. hospital)
Degree of DivergenceDegree of Divergence
Amount of discretion permitted the Amount of discretion permitted the server to customize the service. server to customize the service. (attorney vs. paralegal) (attorney vs. paralegal)
Structural Alternatives for a Structural Alternatives for a
RestaurantRestaurant
No Reservations
Self-seating. Menu on BlackboardEliminate
Customer Fills Out Form
Pre-prepared: No Choice
Limit to Four Choices
Sundae Bar: Self-service
Coffee, Tea, Milk onlyServe Salad & Entree Together:
Bill and Beverage Together
Cash only: Pay when Leaving
TAKE RESERVATIONSEAT GUESTS, GIVE MENUSSERVE WATER AND BREAD
TAKE ORDERSPREPARE ORDERS
Salad (4 choices)
Entree (15 choices)
Dessert (6 choices)
Beverage (6 choices)SERVE ORDERS
COLLECT PAYMENT
Specific Table SelectionRecite Menu: Describe Entrees & SpecialsAssortment of Hot Breads and Hors D’oeuvresAt table. Taken Personally by Maltre d’
Individually Prepared at table
Expand to 20 Choices: Add Flaming Dishes;Bone Fish at Table; Prepare Sauces at TableExpand to 12 Choices
Add Exotic Coffees; Sherbet betweenCourses; Hand Grind Pepper
Choice of Payment. Including House Accounts:Serve Mints
LOWER COMPLEXITY/DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCE
Taxonomy of Service Taxonomy of Service ProcessesProcesses
Low divergence High divergenceLow divergence High divergence (standardized service) (customized service)(standardized service) (customized service) Processing Processing Processing Processing Processing ProcessingProcessing Processing Processing Processing Processing Processing of goods Information of people of goods Information of peopleof goods Information of people of goods Information of people Dry Check Auto repair ComputerDry Check Auto repair Computer No Cleaning processing Tailoring a programmingNo Cleaning processing Tailoring a programming Customer Restocking Billing for a suit Designing a Customer Restocking Billing for a suit Designing a Contact a vending credit card buildingContact a vending credit card building machine machine Ordering SupervisionOrdering Supervision Indirect groceries of a landingIndirect groceries of a landing customer from a home by an aircustomer from a home by an air contact computer controllercontact computer controller No Operating Withdrawing Operating Sampling Documenting Driving aNo Operating Withdrawing Operating Sampling Documenting Driving a customer- a vending cash from an elevator food at a medical rental carcustomer- a vending cash from an elevator food at a medical rental car service machine an ATM Riding an buffet dinner history Using a service machine an ATM Riding an buffet dinner history Using a worker Assembling escalator Bagging of worker Assembling escalator Bagging of health club health club interaction premade interaction premade groceries Searching for facility groceries Searching for facility (self- furniture information(self- furniture informationDirect service) in a libraryDirect service) in a libraryCustomer Customer Food Giving a Providing Home Portrait HaircuttingCustomer Customer Food Giving a Providing Home Portrait HaircuttingContact service service in a lecture public carpet painting PerformingContact service service in a lecture public carpet painting Performing worker restaurant Handling transport- cleaning Counseling a surgicalworker restaurant Handling transport- cleaning Counseling a surgical interaction Hand car routine bank a tion Landscaping operation interaction Hand car routine bank a tion Landscaping operation washing transactions Providing servicewashing transactions Providing service mass mass vaccinationvaccination
Generic Approaches to Generic Approaches to Service DesignService Design
1. Production-line 1. Production-line McDonald’sMcDonald’s• • Limit Discretion of PersonnelLimit Discretion of Personnel mufflers mufflers• • Division of LaborDivision of Labor MRI tech MRI tech• • Substitute Technology for PeopleSubstitute Technology for People greeting card reorder greeting card reorder• • Standardize the ServiceStandardize the Service franchising - Starbucks franchising - Starbucks
2. Customer as Coproducer 2. Customer as Coproducer Pizza Hut Pizza Hut buffetbuffet
• Self Service• Self Service automatic check-in at airlines automatic check-in at airlines• Smoothing Service Demand• Smoothing Service Demand midweek ski lift midweek ski lift
discountdiscount
3. Customer Contact 3. Customer Contact front office/back officefront office/back office• Degree of Customer Contact • Degree of Customer Contact laundry at a hospital laundry at a hospital• Separation of High and Low Contact Operations• Separation of High and Low Contact Operations
Airline reservationists/baggage handlerAirline reservationists/baggage handler
4. Information Empowerment4. Information Empowerment IT – it’s not just for nerds IT – it’s not just for nerds anymoreanymore
• Employee• Employee cancelled airline flight cancelled airline flight• • Customer Customer package tracking package tracking
Customer Value EquationCustomer Value Equation
erviceuiringtheSCostsofAcqicePr
tyocessQualiProducedPrsultsReValue
Discussion QuestionsDiscussion Questions
1.1. What are the limits in the production-line What are the limits in the production-line approach to service?approach to service?
2.2. Give examples of a service in which Give examples of a service in which substituting technology for people would substituting technology for people would be inappropriate.be inappropriate.
3.3. What are some drawbacks of customer What are some drawbacks of customer participation in the service delivery participation in the service delivery process?process?
4.4. What ethical issues are raised in the What ethical issues are raised in the promotion of sales during a service promotion of sales during a service transaction?transaction?
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