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STUDY GUIDE

Topic 4:

BMSV5103 Service Marketing

Aligning Service Design and Standards

Learning Outcomes
By the end of this topic, you should be able to:
1.

Describe the challenges inherent in and important considerations for


service innovation and design;

2.

Present an array of different types of service innovations;

3.

Develop and read service blueprints;

4.

Discuss factors necessary for appropriate service standards;

5.

Describe the development of customer-defined service standards;

6.

Explain the profound impact of physical evidence;

7.

Illustrate differences in types of servicescapes and roles played by the


servicescapes;

8.

Present the framework for understanding effects of servicescapes on


behaviour; and

9.

Elaborate the guidelines for physical evidence strategy.

Topic Overview
This topic will enable you to learn to identify the causes of gap 2 as well as
effective strategies for closing this gap.

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STUDY GUIDE

BMSV5103 Service Marketing

Focus Areas and Assigned Readings


Focus Areas

Assigned Readings
Zeithaml, V. A., Bitner, M. J., & Gremler,
D. D. (2013). Services marketing:
Integrating customer focus across the
firm (6th ed). Singapore: McGraw-Hill.

4.1

Challenges of Service Innovation


and Design

Chapter 8, pp 218-219.

4.2

Important Considerations for


Service Innovation

Chapter 8, pp 219-223.

4.3

Types of Service Innovation

Chapter 8, pp 224-226.

4.4

Stages in Service Innovation and


Development

Chapter 8, pp 226-234.

4.5

Service Blueprinting

Chapter 8, pp 234244.

4.6

Standardisation of Service
Behaviours and Actions

Chapter 9, pp 252-255.

4.7

Types and Development of


Customer-Defined Service
Standards

Chapter 9, pp 256-273.

4.8

Physical Evidence

Chapter 10, pp 278-282.

4.9

Types and Strategic Roles of


Servicescapes

Chapter 10, pp 282-288.

4.10 Framework for Understanding


Servicescape Effects on Behaviour

Chapter 10, pp 288-297.

4.11 Guidelines for Physical Evidence


Strategy

Chapter 10, pp 298-303.

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Content Summary
4.1

Challenges of Service Innovation and Design


x
x
x
x

4.2

The characteristics of services, which were discussed in Topic 1,


are the heart of the challenges involved in designing services.
Because services cannot be touched, examined or tried out,
people frequently resort to words in their efforts to describe them.
There are four risks of attempting to describe services in word
alone: oversimplification, incompleteness, subjectivity and biased
interpretation.
All these risks become very apparent in the innovation and
service development process, when organisations may be
attempting to design complex services never before experienced
by customers.

Important Considerations for Service Innovation


x

x
x
x

Because services are intangible and process based, and because


they frequently involve interactions among and between
customers and employees, it is important to involve both
customers and employees at various points in the innovation
process.
The fact that services are intangible makes it more imperative for
a new service innovation to have four characteristics: (1) it must
be objective, not subjective; (2) it must be precise, not vague; (3)
it must be fact driven, not opinion driven and (4) it must be
methodological, not philosophical.
However, it should not become overly rigid or bureaucratised.
Common sense must dictate when flexibility and speed will
override the structure.
It is also important to use a system or design mindset, sometimes
referred to as design thinking, to be sure all elements are
considered and integrated.

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STUDY GUIDE

4.3

Given the interdisciplinary and interactional nature of service


design and its focus on customer experiences, a set of five
principles has been proposed as central to service design
thinking: (1) user-centred; (2) co-creative; (3) sequencing;
(4) evidencing; and (5) holistic.

Types of Service Innovation


x
x
x

x
x
x
x

4.4

BMSV5103 Service Marketing

There are several types of service innovations, including service


offering innovation, innovating around customer roles and
innovation through service solutions.
As the new service development process was described,
remember that not all new services are new to the same degree.
New service options can run the gamut from major innovations to
minor style changes: major or radical innovations, start-up
businesses, new services for the currently serviced market,
service line extensions, service improvements and style changes.
In addition, it is also possible that service innovations may come
about when the customers usage or co-creation role is redefined.
Many radical innovations effectively redefine the customers role
in these ways.
Todays customers are not looking for one stand-alone product or
service but, rather, innovative solutions to their problems.
When companies begin to think in terms of solutions for
customers, they start to spend more time with customers,
listening to and observing their problems and identifying pain
points that can be addressed through innovative solutions.

Stages in Service Innovation and Development


x

New service development is rarely a completely linear process.


Many companies are finding that to speed up new service
development, some steps can be worked on simultaneously, and
in some instances a step may even be skipped.
The process of new service development is divided into two
sections: front-end planning and implementation.

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STUDY GUIDE

x
x

x
x
x

4.5

BMSV5103 Service Marketing

The front-end determines what service concepts will be


developed, whereas the back-end executes or implements the
service concept.
The first process of front-end planning is business strategy
development or review, followed by new service strategy
development, idea generation, service concept development and
evaluation and business analysis.
The front-end is sometimes called fuzzy because of its relative
abstractness, which is even more apparent with intangible and
variable services that with manufactured products.
Once the new service concept has passed all the front-end
planning hurdles, it is ready for the implementation stage of the
process.
The implementation stage involves service development and
testing, market testing, commercialisation and post-introduction
evaluation.

Service Blueprinting
x

x
x

x
x

A service blueprint is a picture or map that accurately portrays the


service system to the different people involved in providing it so
that they can understand and deal with it objectively regardless of
their roles or their individual points of view.
Service blueprinting is a useful tool for designing and specifying
intangible service process.
It is particularly useful at the design stage of service development.
The key components of service blueprints are customer actions,
onstage contact employee actions, backstage contact employee
actions and support process.
In designing effective service blueprints, it is recommended that
the diagramming start with the customers view of the process
and to work backward into the delivery system.

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STUDY GUIDE

4.6

The basic steps in building a blueprint are as follows:


(a)

Identify the process to be blueprinted;

(b)

Identify the customer or customer segment;

(c)

Map the process from the customers point of view;

(d)

Map contact employee actions, onstage and backstage,


and/or technology actions; link contact activities to needed
support functions; and

(e)

Add evidence of service at each customer action step.

Service blueprinting is a particularly useful technique for service


innovation and design. It can make a complex service concrete
through its visual depiction of all the steps, actors, processes and
physical evidence of the service.
Its key feature is the focus on the customer the customers
experience is documented first and is kept fully in view as the
other features of the blueprint are developed.

Standardisation of Service Behaviours and Actions


x

x
x

x
4.7

BMSV5103 Service Marketing

Standardisation of service can take three forms:


Substitution of technology for personal contact and human effort
(e.g. automatic teller machines, automatic car washes and airport
X-ray machines);
Improvement in work methods (e.g. restaurant salad bars, routine
tax and accounting services developed by firms); and
Combination of these two methods.
Standardisation, whether accomplished by technology or by
improvements in work processes, reduces gap 2.

Types and Development of Customer-Defined Service Standards


x

The types of standards that close provider gap 2 are


defined standards: operational goals and measures
pivotal customer requirements that are visible to and
by customers rather than on company concerns
productivity or efficiency.
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customerbased on
measured
such as

STUDY GUIDE

x
x

x
x
x

BMSV5103 Service Marketing

Two major types of customer-defined service standards can be


distinguished: hard and soft.
An example of hard customer-defined standards can be found in
all the Federal Express standards that comprise the Service
Quality Index which falls into the category of hard standards and
measures: things that can be counted, timed or observed through
audits.
Another example of customer-defined hard standards in the
Internet service is the set summary metrics that Dell Computer
uses for fulfilment.
Soft customer-defined standards are opinion-based measures
and cannot be directly observed, which must be collected by
talking to customers, employees or others.
For example, Mini Maid Services, a firm that franchises home and
office janitorial services, successfully built a business by
developing a repertoire of 22 customer-defined soft standards for
daily cleaning chores.
The steps for setting customer-defined service standards are as
follows:
(a)

Identify existing or desired service encounter sequence;

(b)

Translate customer expectations into behaviours/actions;

(c)

Determine appropriate standards;

(d)

Develop measurements for standards;

(e)

Establish target levels for standards;

(f)

Track measures against standards;

(g)

Provide feedback about performance to employees; and

(h)

Update target levels and measures.

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STUDY GUIDE

4.8

Physical Evidence
x
x
x
x

x
x

4.9

BMSV5103 Service Marketing

Physical evidence is defined as the environment in which the


service is delivered and in performance or communication of the
service.
Effective design of physical, tangible evidence is important for the
closing of provider gap 2.
General elements of physical evidence include all aspects of the
organisations physical facility (the servicescape) as well as other
forms of tangible communications.
Elements of the physical servicescape that affect customers
include both exterior attributes (e.g. signage, parking, landscape,
etc) and interior attributes (e.g. design, layout, equipment, decor,
etc).
Internet is a more recent form of physical evidence that companies
can use to communicate about the service experience.
Physical evidence of the service will influence the flow of the
experience, the meaning customers attach to it, their satisfaction
connections with the company delivering the experience and their
social and personal interactions with others experiencing the
service.

Types and Strategic Roles of Servicescapes


x

x
x
x

Three types of service organisations that differ on who actually


comes into the service facility are self-service (customer only),
interpersonal service (both customer and employee) and remote
service (employee only).
Self-service is an environment where the customer performs most
of the activities and few if any employees are involved (e.g.
ATMs, movie theatres, check-in kiosks at airports, etc).
Remote service has little or no customer involvement with the
servicescape (e.g. utilities, many professional services, etc).
Interpersonal services are called when both the customer and the
employee are present and active in the servicescape (e.g. hotels,
educational settings, hospitals, etc).

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STUDY GUIDE

x
x
x
x
x

4.10

Within the cells of the typology, the servicescape can play many
strategic roles simultaneously. It is frequently one of the most
important elements used in positioning a service organisation.
Similar to a tangible products package, the servicescape and
other elements of physical evidence essentially wrap the service
and convey to consumers an external image of what is inside.
The servicescape can also serve as a facilitator in aiding the
performance of persons in the environment.
The design of the servicescape aids in the socialisation of both
employees and customers in the sense that it helps convey
expected roles, behaviours and relationships.
In addition, the design of the physical facility can differentiate a
firm from its competitors and signal the market segment that the
service is intended for.

Framework
Behaviour
x
x

4.11

BMSV5103 Service Marketing

for

Understanding

Servicescape

Effects

on

The framework for underlying servicescape effects on behaviour


follows from basic stimulus-organism-response theory.
In the framework, the multidimensional environment is the
stimulus, the consumers and employees are the organisms that
respond to the stimuli and the behaviours directed at the
environment are the responses.
The framework represents a comprehensive stimulus-organismresponse model that recognises complex dimensions of the
environment, impact on multiple parties (customers, employees
and their interactions), multiple types of internal responses
(cognitive, emotional and physiological) and a variety of individual
and social behaviours that can result.

Guidelines for Physical Evidence Strategy


x

Some general guidelines for an effective physical evidence


strategy are:
(a)

Recognise the strategic impact of physical evidence;

(b)

Blueprint the physical evidence of service;

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BMSV5103 Service Marketing

(c)

Clarify strategic roles of the servicescape;

(d)

Assess and identify physical evidence opportunities;

(e)

Update and modernise the evidence; and

(f)

Work cross-functionality.

Study Questions
1.

Research by Tuli, Kohli and Bharadwaj (2007) shows that service


solutions, as defined by customers, are not bundles of products and
services at all, but rather they are sets of customer-facing process.
Explain what they mean with the help of an example.

2.

Service blueprinting has been used effectively to design technologydelivered services including self-service websites and interactive
kiosks. With an example, elaborate the service blueprints for any
technology-delivery service you have chosen.

3.

As Albert Einstein said, Not everything that counts can be counted,


and not everything that can be counted, counts. In business, not all
customer priorities can be counted, timed or observed through audits.
Why?

4.

Discuss two situations where servicescape can be an important


element when it is used in positioning a service firm.

5.

Many items in the physical environment such as signs, symbols and


artefacts serve as explicit or implicit signals that communicate about
the place to its users. With examples, describe how signs, symbols and
artefacts can serve as explicit or implicit communicators.

6.

Based on the following case study, answer the questions that follow.

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BMSV5103 Service Marketing

Case study
KTM Out to Upgrade Services and Create Higher Standards
Keretapi Tanah Melayu (KTM) Berhad president Dr Aminuddin Adnan has
pledged to increase the commuter train frequency, reduce crowding, create
safer coaches with auxiliary police force presence and even have an express
train service for certain destinations. We are on a quest to create higher
standards that are consistent with train stations in progressive nations. Our
aim is to increase the frequency of train services from every 30 minutes to
just 10. Our plans are unfolding in stages. Now, we have 11 sets of six-car
electric trains from Shanghai, China, that are running well. This is part of the
38 new sets of trains for KTM Komuter, which is funded by the Government
Transformation Programmes (GTP) Urban Public Transport National Key
Results Area (NKRA), he said. Dr Aminuddin said the NKRA initiative would
improve the quality of the service. He said KTM was also studying the
possibility of introducing an express service from Port Klang to KL Sentral if
there was demand. For example, the all-women coaches received good
support with 60 per cent females. At the moment we are working out the
time frame where by June we would be able to achieve the 10-minute target
once we receive all the trains, he said after accompanying Federal
Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal
Abidin on a Komuter train ride. Nong Chik boarded the Komuter train at the
Pantai Dalam station and alighted at the Bank Negara station and walked to
his office in Jalan Raja Laut. People using the trains are happy that the new
six-car coaches from China have helped to reduce crowding. When all the
new trains hit the track, waiting time will be reduced from half an hour to just
10 minutes and this will encourage more people to use the Komuter, he
said. Nong Chik said the additional coaches had improved service. The
trains will reduce overcrowding in KTM trains along the popular routes and
our aim is to reduce the number of cars coming into the city, thus cutting
down on carbon footprint, he said.
Source:
http://thestar.com.my/metro/story.asp?file=/2012/4/13/central/11093900&sec
=central
(a)

KTM Berhad is on a quest to reach higher standards that are consistent


with train stations in progressive nations. What are the factors that can
affect KTM's efforts to reach higher standards?

(b)

Explain how KTM Berhad can develop the process for setting its
customer-defined standards.

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