Flashcards
Lecture 5
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- 1Service Innovation and DesignMeeting customer expectations of service requires understanding their expectations but also taking action on that understanding.
Challenges: The complexity increase with increased amount of time over which a service is provided (10-day vacation, 6-month weight loss program) - 2New service development processesMany services are produced and consumed and co-created in real-time and often involve the interaction between employees and customers > it is critical that innovation and new service development process involve both employees and customers.
- 3Types of new services- Major or radical innovations:
o New services for markets not yet defined (ex. eBay);
- Start-up businesses
o New services for a market that is already served by existing products that meet the same generic needs (ex. Amazon);
- New services for the currently served market;
o Attempt to offer existing customers a service not previously available form the company (ex. Tesco offering insurance, health club offering nutritional classes)
- Service line extensions:
o Augmentations of the existing service line (ex. restaurant adding new menu items);
- Service improvements:
o Most Common;
o Changes in features of already existing services (ex. extended hours, adding Wi-Fi in hotel rooms);
- Style changes:
o Most modest but highly visible and can have significant effects on customer perceptions (ex. Changing color scheme, revising logo, redesign website); - 4Stages in Service Innovation & Development1. front end planning:
- this determines what service concepts will be developed
- this is often where problems occur “fuzzy” because of it so abstract – not tangible
2. implementation:
- this executes or implements the service concept
Challenges:
- Defining services in their early stages of the development process;
- Prototype development stage;
- Require coordination of HR, technology, internal processes and facilities with already existing systems; - 5Stages in Service Innovation & Development: Front end planning- Business strategy development or review: new ideas must fit with in firm’s larger strategic mission and vision;
- New service strategy development: matrix shows 2 growth opportunities by offering new or existing services to either new customers or existing customers. Without a clear new product/service strategy, front-end decisions become ineffective;
- Idea generation: Lots of ways – Brainstorming, solicitation of ideas from employees and customers, lead user research and learning from competitors’ offerings. Other options include collaborating with outsiders through licensing, joint ventures;
- Service concept and evaluation – this stage is when an idea has been deemed a good fit&is ready for development. This is formulating the basic product definitions and then presenting consumers with descriptions&drawings of the service.
- Business analysis: assuming it is accepted favorably by customer&employees, the service is then judged based on its economic feasibility and potential profitability: demand analysis, revenue projections, cost analysis and operations feasibility - 6Stages in Service Innovation & Development: Implementation- Service development and testing: prototyping and customer acceptance. Need to make sure all operational details are inline otherwise good service can fail. One way is to blueprint at service.
- Market testing: can take place on a limited number of locations to determine market acceptance as well as other market mix variables: price, promotion, distribution channels. When multiple locations are not available – roll out can be tested on employees and their family members first. Pilot runs are also important.
- Commercialization: This is when the service is introduced to the marketplace. Goal is to build and maintain acceptance of the new service by the personnel delivering the service.
- Post-introduction evaluation: review and make changes to delivery process, staffing, marketing mix variables. - 7Service blueprintingA tool for simultaneously represent the service process, the points of customer contact, and the evidence of service from the customer’s point of view.
Useful in the design stage of service development. It provides a way to break down a service into its logical components and to depict the steps in the process - 8Components of blueprinting1. Physical Evidence: what the customer sees;
2. Customer actions: steps, choices, activities and interactions that the customer performs;
3. Line of interaction: contact employee and customer interact;
4. Onstage Contact: all activities the contact employee has with customer (face-to-face);
5. Line of visibility: activities that are visible & not visible to customers;
6. Backstage Contact: employee actions that occur behind closed doors (prep);
7. Line of internal interaction: separated contact and support personnel;
8. Support Process: internal services that support the contact employee in delivering the service. - 9Application of service blueprintso New service development:
- concept development;
- market testing;
o Supporting a “zero defects” culture:
- managing reliability;
- identifying empowerment issues;
o Service recovery strategies:
- identifying service problems;
- conducting root cause analysis;
- modifying processes; - 10Uses of service blueprintso Service marketers:
- Creating realistic customer expectations:
- Service system design;
- Promotion;
o Operations Management:
- Rendering the service as promised:
- Managing fail points;
- Training systems;
- Quality control;
o HR Management:
- Empowering the human element:
- Job descriptions;
- Selection criteria;
- Appraisal systems;
o System Technology:
- Providing necessary tools:
- System specifications;
- Personal preference databases; - 11High performance service innovationsOften too many new ideas from which to choose how to develop and design new services due to such things as:
- Technology;
- Changes in customer needs;
- Deregulation;
- Competitors;
o Success is determined by:
- Choosing the right project;
- Doing the projects right;
o Integrated new services
o Consider multiple measures of success
o Maintain some flexibility
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- Flashcards on Lecture 5, created by Roberta Daugelai on 28/03/2016.
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- Roberta Daugelai
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