Service Operations (SO) Post Graduate Program for Working Executives Week 3

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1 Service Operations (SO) Post Graduate Program for Working Executives Week 3 Vinay Kumar Kalakbandi Assistant Professor Operations & Systems Area 09/11/2014 Vinay Kalakbandi 1 This week on Service Operations Recap Service Design fundamentals Servicescapes Service blueprinting 09/11/2014 Vinay Kalakbandi 2 1

2 Recap Service characteristics Service classifications Service economy Strategic Service Vision 09/11/2014 Vinay Kalakbandi 3 SERVICE SYSTEM DESIGN 09/11/2014 Vinay Kalakbandi 4 2

3 Services comprises of Service outcome Service experience Which is important? 11/6/2016 Vinay Kalakbandi 5 Service design elements Structural Delivery system, Facility design, Location Servicescapes Capacity planning Queuing models Managerial Service quality management Managing supply and demand Yield management, demand steering Managing the service encounter Degree and nature of interaction between customer and server Information: and how you use it! 3

4 Service/Product Bundle Element Core Goods Example Core Service Example Business Custom clothier Business hotel Core Business suits Room for the night Peripheral Goods Peripheral Service Garment bag Deferred payment plans Bath robe In house restaurant Variant Coffee lounge Airport shuttle 11/6/2016 Vinay Kalakbandi 7 The Service Package Supporting Facility: The physical resources that must be in place before a service can be sold. Examples are golf course, ski lift, hospital, airplane. Facilitating Goods: The material consumed by the buyer or items provided by the consumer. Examples are food items, legal documents, golf clubs, medical history. Information: Operations data or information that is provided by the customer to enable efficient and customized service. Examples are patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi. 4

5 The Service Package (cont.) Explicit Services: Benefits readily observable by the senses. The essential or intrinsic features. Examples are quality of meal, attitude of the waiter, on-time departure. Implicit Services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. Examples are privacy of loan office, security of a well lighted parking lot. Peripheral/Ancillary services and their service packages! The Service Package Supporting Facility Explicit Services Service Experience Information Implicit Services Facilitating Goods 09/11/2014 Vinay Kalakbandi 10 5

6 Exercise Cook it yourself restaurant Drive through car wash Car Sharing service Mobile wedding chapel Pet boarding facility 09/11/2014 Vinay Kalakbandi 11 SERVICESCAPES 09/11/2014 Vinay Kalakbandi 12 6

7 09/11/2014 Vinay Kalakbandi 13 09/11/2014 Vinay Kalakbandi 14 7

8 What place is this? 09/11/2014 Vinay Kalakbandi 15 What place is this? 09/11/2014 Vinay Kalakbandi 16 8

9 Physical evidence The environment in which the service is delivered and where the firm and the customer interact, and any tangible commodities that facilitate performance or communication of the service. 09/11/2014 Vinay Kalakbandi 17 Elements of Physical Evidence

10 Examples of Physical Evidence from the Customer s Point of View Examples of Physical Evidence from the Customer s Point of View 10

Typology of Service Organizations Based on Form and Use of the Servicescape Whom the servicescape will affect 10-21 How Does Physical Evidence

11 Typology of Service Organizations Based on Form and Use of the Servicescape Whom the servicescape will affect How Does Physical Evidence Affect the Customer Experience? Flow of the experience Meaning customers attached to it Satisfaction Emotional connections to company

12 Roles of the Servicescape Important elements used in positioning a service organization. Package: wrap the service and convey what is inside conveys expectations influences perceptions Facilitator facilitates the flow of the service delivery process provides information (how am I to act?) facilitates the ordering process (how does this work?) facilitates service delivery Eg. International traveler find the a poorly designed airport with few signs, poor ventilation, and few places to sit or eat Clue management: the process of clearly identifying and managing all the various clues that customers use to form their impressions and feelings about the company Speedi-Lube Spells Out the Service Offering

13 Package Facilitator 13

and employees customers and fellow customers Employees and fellow employees

14 Roles of the Servicescape (continued) Socializer: Helps to convey expected roles, behaviors, and relationships facilitates interaction between: customers and employees customers and fellow customers Employees and fellow employees Differentiator sets provider apart from competition in the mind of the consumer Socializer: 14

environment Proposition: Dimensions of the servicescape will affect customers and employees and they

15 Differentiator Understanding Servicescape Effects on Behavior Stimulus-organism-response theory Stimulus = multidimensional environment Organism = customers and employees Response = behaviors directed at the environment Proposition: Dimensions of the servicescape will affect customers and employees and they will behave and respond in different ways depending on their internal reactions to the servciescape

16 10-31 Responses to the servicescape Physiological Pupil Dilation Tears, perspiration etc Beliefs Categorizations Symbolic meaning Cognitive Affective Arousal Complexity Pleasure Personal control Natural elements Behavior Approach Avoidance 09/11/2014 Vinay Kalakbandi 32 16

17 Individual Behaviors in the Servicescape Environmental psychologists suggest that people react to places with two general, and opposite forms of behavior: Approach: all positive behaviors that might be directed to a place Desire to stay, explore, work, affiliate Shopping enjoyment, spending time and money Avoidance: negative behaviors Desire not to stay, etc Social Interactions in the Servicescape All social interaction is affected by the physical container in which it occurs Customer-employee Customer-customer Scripts (particular progression of events) Physical proximity Seating arrangements Size Flexibility

18 Variations in Individual Response Personality differences Arousal seekers vs. arousal avoiders Enjoy high levels of stimulation/prefer lower levels of stimulation Environmental screeners Able to experience a high level of stimuli but not be affected by it Purpose for being in the servicescape Business/pleasure Temporary mood state A person after a day at work/ a person after holiday Servicescape dimensions and impact Ambient conditions Effects on the five senses Perfume at mall entrance Cookies in the mall Oxygen in the casino Music played in the supermarket Familiarity Tempo 09/11/2014 Vinay Kalakbandi 36 18

19 Servicescape dimensions and impact Spatial layout and functionality The new supermarkets! Self service restaurants Signs, symbols, and artefacts explicit or implicit communication of meaning Important in forming first impressions Visual metaphor of the organization s offering Way-finding labels: Aiga symbols Professor s office 09/11/2014 Vinay Kalakbandi 37 Guidelines for Physical Evidence Strategy Recognize the strategic impact of physical evidence. Blueprint the physical evidence of service. Clarify strategic roles of the servicescape. Assess and identify physical evidence opportunities. Update and modernize the evidence. Work cross-functionally

Managerial Implications Careful and creative management of servicescape necessary Helps firms achieve both external marketing goals and internal organizational goals Servicescape is a visual metaphor

20 Managerial Implications Careful and creative management of servicescape necessary Helps firms achieve both external marketing goals and internal organizational goals Servicescape is a visual metaphor for the organization s offering Servicescape is the packaging of the service It facilitates and nurtures a certain type of interaction Helps as a key differentiator 09/11/2014 Vinay Kalakbandi 39 SERVICE BLUEPRINTING 09/11/2014 Vinay Kalakbandi 40 20

21 Service Blueprinting A picture or map that accurately portrays the service system so that the different people involved in its development can understand and deal with it objectively regardless of their roles or their individual point of view. 09/11/2014 Vinay Kalakbandi 41 Service Blueprint Physical/Tangible Evidence Customer Actions Line of interaction Onstage/Visible Contact Employee/Technology Actions Line of visibility Backstage/Invisible Contact Employee Actions Line of internal interaction Support Processes 09/11/2014 Vinay Kalakbandi 42 21

Service Blueprint of Luxury Hotel Steps in designing a blueprint 1. Identify the service to be blueprinted Basic business concept A service within a family of services A specific service component 2.

22 Service Blueprint of Luxury Hotel Steps in designing a blueprint 1. Identify the service to be blueprinted Basic business concept A service within a family of services A specific service component 2. Identify the customer segment that receives the service 3. Map the service from the customer s point of view 4. Draw the lines of interaction and visibility 5. Map the service from the customer contact person s point of view 6. Draw the line of internal interaction 7. Link customer and contact person activities to needed support functions 8. Add physical evidence 09/11/2014 Vinay Kalakbandi 44 22

23 How will the blueprint help? Identifying key processes necessary along with what needs to be visible to the customer Identifying failure points and arranging for necessary fail safe mechanisms Helps choreograph an ideal service encounter Aid service improvement efforts 09/11/2014 Vinay Kalakbandi 45 Blueprinting exercise Cook it yourself restaurant Drive through car wash Car Sharing service Paragliding service Mobile wedding chapel Pet boarding facility 09/11/2014 Vinay Kalakbandi 46 23

24 THANK YOU 09/11/2014 Vinay Kalakbandi 54 24

McGraw-Hill/Irwin. Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin. Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Physical Evidence and the Servicescape Chapter 10 Physical Evidence Types of Servicescapes Strategic Roles of the