Services Marketing notes part 2of5
The concept of services and service design
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A service is an activity or set of activities that fulfill a need or a want for a customer or a user. Service design is the process of designing and organizing people, infrastructure, communication, and material components of a service in order to improve its quality and the interaction between the service provider and the customer. It involves understanding the needs and wants of the customer, as well as the capabilities and resources of the service provider, in order to create a service that meets those needs in an efficient and effective way. Service design can be applied to a wide range of industries, such as healthcare, transportation, finance, and government.
Definition of services
A service is an activity or set of activities that fulfill a need or a want for a customer or user. Services can be tangible, such as a haircut or a car repair, or intangible, such as financial advice or a phone call. Services are often provided by businesses, but they can also be provided by individuals, organizations or governments. Services can be either a product or a process and can be classified into three types:
- Core services: The primary service that an organization provides to its customers.
- Supporting services: Additional services that enhance the customer experience or make the core service more convenient or efficient.
- Ancillary services: Services that are not directly related to the core service, but are offered to customers as an additional benefit.
Services are often differentiated from goods by their intangibility, variability and inseparability of production and consumption.
Components
The components of a service can be broadly categorized into four areas:
- People: The employees or individuals who provide the service, as well as the customers or users who receive the service.
- Infrastructure: The physical and technological resources that are necessary to provide and support the service, such as equipment, facilities, and systems.
- Communication: The methods and channels used to communicate information and instructions related to the service, such as advertising, customer service, and feedback.
- Material: The tangible goods or materials that are necessary to provide the service, such as products, supplies, or tools.
Service design considers how each of these components interacts with one another to create a cohesive and effective service experience for the customer.
Characteristics
Services have several characteristics that differentiate them from goods:
- Intangibility: Services cannot be seen, touched, or held and are often experienced through a process or interaction.
- Inseparability: Services are produced and consumed at the same time, and the customer's presence is often required during the service delivery.
- Variability: Services can vary in quality and can be influenced by the skills and abilities of the service provider, as well as the customer's own expectations and perceptions.
- Perishability: Services cannot be stored for future use and are often time-sensitive.
- Heterogeneity: Services provided by different providers may be heterogeneous, meaning that the quality, process and outcome of the service may vary.
- Lack of ownership: Services cannot be owned and controlled after delivery, unlike goods.
Understanding these characteristics is important in designing and delivering a service that meets customer expectations and provides a positive experience.
Classification of services
There are several ways to classify services, but one common method is based on the degree of tangibility and the type of customer contact:
- Tangible services: Services that involve a tangible product or component, such as a car repair or a haircut.
- Intangible services: Services that do not involve a tangible product or component, such as financial advice or a phone call.
- High contact services: Services that involve face-to-face or direct contact with the customer, such as a personal trainer or a customer service representative.
- Low contact services: Services that do not involve face-to-face or direct contact with the customer, such as online banking or a self-service kiosk.
Another way to classify services is based on the stage of production process, it can be grouped into three categories:
- Product-dominant services: Services that are closely tied to a physical product, such as car repair or appliance repair.
- People-dominant services: Services that rely heavily on the skills and interactions of the service provider, such as consulting or education.
- Possession-dominant services: Services that involve the customer obtaining ownership or control of an asset, such as rental or leasing.
These classifications provide a general framework for understanding the different types of services and their unique characteristics, but it is important to note that there may be overlap between different classifications.
Differences between goods and services
| Goods | Services |
|---|---|
| Tangible | Intangible |
| Can be stored | Perishable |
| Can be inspected before purchase | Quality can vary |
| Separable from production | Inseparable from production |
| Can be owned | Cannot be owned |
| Ex: Apples, shirts, cars | Ex: Haircuts, phone calls, financial advice |
Goods are physical products that can be seen, touched, and stored. They can be inspected before purchase and the quality is usually consistent. They can be separated from the production process and can be owned after purchase. Examples of goods include apples, shirts, and cars.
Services, on the other hand, are activities or benefits that fulfill a need or want. They are intangible, meaning that they cannot be seen, touched, or held. They are perishable, meaning that they cannot be stored for future use and are often time-sensitive. They are inseparable from the production process, meaning that the customer is often present during the service delivery. Services can vary in quality, and the quality of the service is often dependent on the skills and abilities of the service provider. Examples of services include haircuts, phone calls, and financial advice.
Service design
Service design is the process of designing and organizing the components of a service in order to improve its quality and the interaction between the service provider and the customer. It involves understanding the needs and wants of the customer, as well as the capabilities and resources of the service provider, in order to create a service that meets those needs in an efficient and effective way. Service design can be applied to a wide range of industries, such as healthcare, transportation, finance, and government.
The process of service design typically includes the following steps:
- Research and understanding of customer needs, wants, and pain points.
- Analysis of the current service offering and identification of areas for improvement.
- Conceptualization and prototyping of new service ideas.
- Testing and validation of the service concept with customers.
- Implementation and ongoing evaluation of the service.
Service design can be a complex and iterative process that involves the participation of multiple stakeholders and teams, including designers, researchers, service providers, and customers. The goal of service design is to create a service that is user-centered, efficient, and effective, and that meets the needs of both the customers and the service provider.
Factors to be considered in designing service process
There are several factors to be considered when designing a service process, including:
- Customer needs and expectations: Understanding the needs and expectations of customers is essential in designing a service that meets their requirements and provides a positive experience. This includes understanding their pain points, preferences and behaviors.
- Service quality: The quality of the service is critical in determining customer satisfaction and loyalty. Factors to consider include reliability, responsiveness, assurance, empathy and tangibles.
- Efficiency and effectiveness: The service process should be designed to be as efficient and effective as possible in order to minimize costs, reduce errors and improve productivity.
- Flexibility and scalability: The service process should be flexible enough to accommodate changes in demand and to be able to scale up or down as needed.
- Technology and automation: Technology and automation can be used to improve the service process, such as self-service kiosks, online booking systems, or automated phone systems.
- Staffing and training: The service process should be designed to ensure that staff is properly trained and equipped to provide the service.
- Legal and regulatory compliance: The service process should be compliant with any applicable laws and regulations.
- Continuous improvement: The service process should be continuously evaluated and improved to ensure that it remains relevant and effective in meeting customer needs over time.
Service design is a continuous process, it is important to keep track of the customer feedback and make necessary adjustments.
Guiding principles
Guiding principles are a set of fundamental beliefs or values that serve as a guide or framework for decision-making and action. They are used to provide direction and focus for an organization, project, or team, and help ensure that actions align with the organization's overall goals and objectives.
In service design, guiding principles can be used to inform the design and delivery of a service, by providing a framework for decision-making and ensuring that the service aligns with the organization's overall mission and goals. These principles can be used to guide the overall design process, as well as the development of specific components of the service, such as customer interactions, staff training, and technology integration.
Examples of guiding principles for service design could include:
- User-centered design: Putting the customer at the center of the design process.
- Efficiency: Designing a service that is as efficient as possible while still meeting customer needs.
- Innovation: Encouraging and embracing new and creative ideas.
- Sustainability: Incorporating environmental and social sustainability into the service design.
- Accessibility: Ensuring that the service is accessible to all customers regardless of ability.
- Data-driven decision making: Using data to inform decision making and improve the service over time.
Guiding principles are important in service design as they provide a common understanding and shared vision among the team members and stakeholders, and can help ensure that the service is designed and delivered in a way that aligns with the organization's overall mission and goals.
Management models of service design
There are several management models that can be used to guide the service design process, including:
- Lean service design: This model focuses on minimizing waste and maximizing value for the customer. It emphasizes the use of customer feedback, experimentation, and continuous improvement to design and deliver a service that meets customer needs in the most efficient and effective way possible.
- Design Thinking: This model emphasizes the importance of empathy and user-centered design. It encourages a human-centered approach to service design, involving users and customers in the design process to understand their needs and wants, and using this information to design a service that meets their needs.
- Service Blueprinting: This model is a visual representation of the service process, showing all the customer and internal interactions, touchpoints and the flow of the service. It helps to identify all the components of the service and the interactions between them, and allows teams to identify and improve areas of the service that are causing friction or delays.
- Servitization: This model involves the transformation of a product-based business into a service-based business. It focuses on designing and delivering services that are closely tied to the product, such as maintenance, repair, and upgrade services.
- Agile Service Design: This model emphasizes the importance of flexibility, collaboration, and rapid iteration in service design. It encourages teams to work in short sprints, with frequent customer feedback and testing, to design and deliver a service that is responsive to customer needs and can adapt to change.
Each of these models has its own strengths and weaknesses and can be applied in different situations depending on the specific needs and goals of the service design project. It's important to understand the context and the goals of the project and select the most appropriate model accordingly.
Services marketing system
A services marketing system is a set of interrelated components that work together to design, deliver, and promote a service. The main components of a services marketing system include:
- Service design: This includes the development of the service concept, the design of the service process, and the selection of the service delivery channels.
- Service delivery: This includes the actual delivery of the service to customers, including the management of the service process, the management of service providers, and the management of service quality.
- Service promotion: This includes the communication of the service to potential customers, including advertising, public relations, personal selling, and sales promotion.
- Service pricing: This includes determining the price of the service, and pricing strategies that will be used to attract and retain customers.
- Service distribution: This includes the management of the service delivery channels and the management of the service delivery process.
- Service recovery: This includes the management of service failures and the management of customer complaints and service recovery processes.
- Service evaluation and control: This includes the measurement of service quality and the management of service performance.
Service process planning
Service process planning is the process of designing and organizing the service delivery process in order to meet customer needs and improve the overall service experience. The main steps in service process planning include:
- Defining the service concept: This includes identifying the needs and wants of the target market, the service benefits, and the key elements of the service.
- Designing the service process: This includes identifying the steps and activities involved in delivering the service, the service flow and the interactions between customers and service providers.
- Selecting the service delivery channels: This includes determining the most appropriate methods for delivering the service, such as face-to-face, self-service, or remote delivery.
- Planning the service delivery: This includes determining the resources, personnel, and equipment required to deliver the service, as well as scheduling and coordinating the service delivery.
- Managing the service quality: This includes developing quality control processes and procedures to ensure that the service meets customer needs and expectations.
- Continuously improving the service: This includes ongoing evaluation of the service process and making changes as necessary to improve the service and adapt to changing customer needs and market conditions.
Service process planning can also include the use of service blueprinting, process mapping, and flowcharting techniques to visualize and optimize the service process. It is important to involve the customers and other stakeholders in the planning process to ensure that their needs and expectations are taken into account.
Blue printing
Service blueprinting is a visual representation of the service process that shows all the customer and internal interactions, touchpoints, and the flow of the service. It is used to identify all the components of the service and the interactions between them, and to understand how the service is delivered from the customer's perspective.
The service blueprint can be used to identify and improve the areas of the service that are causing friction or delays, and to understand the impact of changes on the service and the customer. It is also useful in identifying opportunities for innovation and creating a more efficient service.
Service blueprinting can be a valuable tool for service design and service process planning, it is a collaborative and visual way of understanding and optimizing the service.
Components of service blue prints and its stages
The main components of a service blueprint are:
- The customer's journey: This shows the steps that the customer goes through in interacting with the service, including touchpoints, activities, and decision points.
- The service delivery process: This shows the internal activities and processes that are required to deliver the service, including the roles and responsibilities of the staff.
- Supporting processes: This shows the processes and systems that support the service delivery, such as technology, logistics, and communication.
- Standards and quality: This shows the standards and quality control processes that are used to ensure that the service meets customer needs and expectations.
- Feedback and evaluation: This shows how customer feedback is collected and used to evaluate and improve the service.
The stages of creating a service blueprint typically include:
- Defining standards and quality controls: This includes identifying the standards and quality control processes that are used to ensure that the service meets customer needs and expectations.
- Identifying feedback and evaluation mechanisms: This includes identifying how customer feedback is collected and used to evaluate and improve the service.
- Visualizing the service blueprint: This includes creating a visual representation of the service process, including the customer's journey, the service delivery process, and the supporting processes.
- Review and testing: This includes reviewing the service blueprint with the stakeholders and testing it with customers to ensure that it is accurate and effective.
- Implementing and continuously improving the service: This includes implementing the service blueprint and continuously monitoring and evaluating it to make improvements as needed.
Process layout out and its types
Process layout refers to the arrangement of resources and equipment within a facility in order to improve the efficiency and effectiveness of the service delivery process. There are several different types of process layout, including:
- Functional layout: This type of layout is used in organizations that produce similar products or services, such as a factory that produces a single product. It groups together resources and equipment that perform the same function, such as all the drilling machines in one area.
- Process-focused layout: This type of layout is used in organizations that produce a variety of products or services, and it groups together resources and equipment that are used in a specific process, such as all the machines used in the assembly process.
- Cellular layout: This type of layout is used in organizations that produce small batches of products or services. It groups together resources and equipment that are used to produce a specific product, such as all the machines used to produce a specific car model.
- Flexible layout: This type of layout is used in organizations that need to be able to quickly adapt to changing product or service demands. It allows for the movement of resources and equipment to different areas of the facility as needed.
- Hybrid layout: This type of layout combines elements of different types of layout to create a layout that is tailored to the specific needs of the organization.
It's important to note that the choice of process layout will depend on the type of service, the volume of service and the level of customization required. By choosing an appropriate process layout, organizations can improve the efficiency and effectiveness of their service delivery process and increase customer satisfaction.
Benchmarking
Benchmarking is the process of comparing the performance of an organization's service delivery process with that of other organizations in order to identify areas for improvement. It involves identifying best practices and industry standards, and comparing the organization's performance against those standards. Benchmarking can be used to evaluate various aspects of the service delivery process, including service quality, efficiency, and customer satisfaction.
There are several different types of benchmarking, including:
- Internal benchmarking: This involves comparing the performance of different departments or divisions within the same organization.
- Competitive benchmarking: This involves comparing the performance of the organization to that of its competitors.
- Functional benchmarking: This involves comparing the performance of the organization in a specific function, such as customer service, to that of other organizations.
- Generic benchmarking: This involves comparing the performance of the organization to that of best-in-class organizations in any industry.
The process of benchmarking typically includes the following steps:
- Identifying the areas to be benchmarked
- Identifying potential benchmarking partners
- Collecting data and performance metrics
- Analysing and comparing the data
- Identifying best practices and areas for improvement
- Implementing improvements and monitoring progress
By benchmarking, organizations can identify areas where they can improve their service delivery process and gain a competitive advantage. It also allows organizations to learn from others and to adopt best practices. Benchmarking can be a valuable tool for continuous improvement and for staying ahead in the industry.
Service mapping is a technique used to visually represent the service delivery process and the interactions between customers, service providers, and other stakeholders. It is used to identify all the components of the service and the interactions between them, and to understand how the service is delivered from the customer's perspective. Service mapping is a powerful tool for improving the service delivery process and can be used in a variety of service industries such as healthcare, retail, and banking.
Service mapping
The process of service mapping typically includes the following steps:
- Defining the service concept: This includes identifying the needs and wants of the target market, the service benefits, and the key elements of the service.
- Identifying customer touchpoints: This includes identifying all the points at which the customer interacts with the service, including before, during, and after the service is delivered.
- Mapping the service process: This includes identifying the internal activities and processes that are required to deliver the service, and how they relate to the customer's journey.
- Identifying support processes: This includes identifying the processes and systems that support the service delivery, such as technology, logistics, and communication.
- Visualizing the service map: This includes creating a visual representation of the service process, including the customer's journey, the service delivery process, and the supporting processes.
- Review and testing: This includes reviewing the service map with the stakeholders and testing it with customers to ensure that it is accurate and effective.
- Implementing and continuously improving the service: This includes implementing the service map and continuously monitoring and evaluating it to make improvements as needed.
Service mapping can be a valuable tool for service design, process improvement, and customer experience management, it provides a clear and visual understanding of the service process and the customer's journey.
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I'm Raja Kumar R, writer and explorer. I explore the world through writing.
