PONDICHERRY UNIVERSITY

(A Central University)

DIRECTORATE OF DISTANCE EDUCATION

Customer Relationship and

Services Management
Paper Code : MBTM 4004

MBA - TOURISM
IV - Semester
2
 Lesson 4.2 - Service Design and Development

Learning Objectives

➢ To study the importance and perspectives of service design

➢ To understand the characteristics of service design.
➢ To know the major factors in service design.
➢ To elucidate on service blueprinting.
➢ To analyse the challenges of service designing.
➢ To study the need and stages of new service development
➢ To examine the methodology of service design.

Introduction

“Service can be designed but experience cannot be designed”

Service is an act or performance. It is provided by the service

delivery system comprising facilities, processes and skills. The service
package includes:

a. The physical resources

b. The goods that are purchased or used by the customer
c. Explicit services
d. Implicit services

Service design is the activity of planning and organizing people,

infrastructure, communication, and material components of a service is
order to improve its quality of delivery and the interaction and relationship
between service providers and customers. Service design methodologies
imbibe customer-centric approaches, thereby infusing user- friendly and
competitive attributes in the services. The main focus is on the relevance
of services to the customers. The mainstay of this process is developing an
understanding of the behavior of the customers, their needs, desires, and
motivations. Customer involvement and their insights through feedback enable
the service designers to frame a concrete plan. The observations are processed
to generate concepts and ideas that are visually projected, say for instance in
sketches or service prototypes.

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 Service design tends to draw the changes to an existing service or development
of new services. All service organizations go through varied choices about the types
of products to offer and the operational mechanisms involved in creating them. In
an organization with a customer–centric approach, these choices are often lead by
market factors, with companies seeking to address the explicit needs of niche
market segments and to differentiate the features and characteristics of
their offerings against those of the competitors.

Service design is focused towards creating for the existing services

of a company new methods of delivery that bring about a makeover in the nature
of the service experience eventually promising new benefits. For example the
development of online banking service design makes use of technological
advancements to further nourish the tangible and intangible aspects of
service (like the online music stores) to satisfy the latent needs
unexpressed by the customers.

A service product is composed of a core product bundled with a range

of different service elements. The core elements of service address the need for a
basic benefit, such as treatment for a specific health problem, a professional
solution to a technological problem, or the repair of a malfunctioning device.
The supporting services facilitate and improve the use of the core service.
They range from dissemination of information, consultation, warranties
and documentation to trouble shooting and hospitality offerings.

Service designing is a challenging task because it requires an ideal

creative vision about processes, people, and experiences as well as outputs and
benefits. Processes may be recorded through blue prints that determine tasks of
staff and their operational sequences. It also checks the experiences of the
customers at every step of service delivery. One of the main objectives of
service design is to prepare a blueprint for a service operation.

The various stages in service design may be presented in a nutshell as

service design and testing, processes and operations design and testing marketing
functions design and testing, human resources training, service verification
process, and test marketing.

Service Development involves creation of new service aims and

strategies, idea screening, and concept development and testing.

Service design is driven by the incredible progress made by

Information and Communication Technology (ICT). It serves to introduce
new services in the existing markets. Service design also augments
existing service line of businesses. For example the innovative menus in
restaurant chains. Service improvements are the much desired outcomes
of service design which transform the features of currently offered
services.
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E-commerce through Internet taps the information revolution and is an apt
illustration for technology driven service innovation. The modern aircrafts too
subscribes to the latest designed jet planes, enabling travelers to reach the
destinations at a fast pace with great comfort.

The goal of service design is to find ideal solutions to the customers’

problems by ensuring that all the employees strive to put together products and
services in such a fashion as to work efficiently. The blue printing, which is
part of service design saves customers the time and energy and offers
them value added service. Customization of services is another advantage of
an impeccable service design. Quality service design aids to provide exactly what
the customers want and deliver it where it is required. Retail businesses adopt
finest service design mechanism to ensure utmost customer satisfaction.
Moreover, service delivery facilitates high degree of customer contact. As
regards the production line, it defines division of labour and standardise
the services.

Service design must be a rational and systematic process. While designing a

service, the processes constituting the service need to be identified, areas of
potential service short falls outlined, the time required for service delivery
determined, and a standard of service delivery time must be set to ensure
good prospects. Alternative/contingency methods of delivery must be
examined and means of emphasizing tangible symbols of the service for
consumers should also be identified. Performance Standards of services will
be enhanced which is a positive outcome of an efficient service delivery.
Another positive result is that the credibility of service will also improve a
lot. Modelling and blue printing of service offer a system for marketers
which can eventually lead to the kind of management and experimentation
required for service innovation and development.

The key aspect of service design is to increase the volume of service

to a level sufficient enough to achieve efficiency and use systems and
technologies which produce stable, dependable, fast, and low–cost service
results. Service industrialization needs a set of processes and management that
is much different from that employed in the functional production of goods.
Service design enables service encounters to enhance customers’
expectations during the processes as well as track their recollections of the
process after it is completed. Service design or redesign should be closely linked to
an organisations strategy. Health and safety must be primary concerns of
service design.

History of Service Design

Shostack (1982; 1984) delved on the activities of designing service

which was considered to be part of the marketing and management
disciplines. He proposed the integrated design of material components
(products) and immaterial components
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(Services). According to Shostack, this design process can be recorded and
finetuned using a service blue print to map the sequences of events in a service
and its essential performances in an objective and explicit manner. It was in
the year 1991 that service design was first introduced as a design
discipline by Prof. Dr. Michael Erlhoff at Koln International School of Design
(KISD), and [Link] Mager has played a significant role for furthering the
study of service design at KISD. In 2004, the Service Design Network was launched
by KISD, Carnegie, Mellon University, Linkopings Universitet, Domus
Academy, and Politecnico di Milano for creating an international network
for academics and professionals of service design.

Major Factors in Service Design

➢ Cost
➢ Quality
➢ Comfort
➢ Speed
➢ Manpower
➢ Marketing
➢ Maintenance
➢ Customer Involvement
➢ Customer Satisfaction
➢ Customer Delight
➢ Competitive advantage.

Need for Service Design

➢ Transition of Markets
➢ New Opportunities
➢ Macro Environmental Threats

 Economic - implication of low demand, inflation, needs to reduce

costs, loans, and overwhelming warranty claims
 Social and Demographic – ageing population, growing disposable
income, social values & customs
 Political – unstable governments, biased policies, coalition, new
regulations, autocracy, safety and security issues, serving
moneyed sources

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  Legal- Stringent legal framework, rigid laws
 Competitive – new or changed services, new campaign
 Cost- raw materials, labour cost, cost of components
 Technological processes- switch over to new practices, outdated
technology, lack of human touch

Objectives of Service Design

Main Focus

➢ Identifying customer needs

➢ Understanding customer wants
➢ Attracting and motivating potential customers
➢ Customer satisfaction

Secondary Focus

➢ Service function
➢ Cost / profit
➢ Quality of service
➢ Service delivery
➢ Service channels
➢ Ease of service
➢ Customer feedback and evaluation

Lack of effective service design may lead to

➢ Low productivity
➢ Substandard quality
➢ Increased costs
➢ Time Wastage
➢ Deterioration of professionalism
➢ De-motivation of HR
➢ Customer Dissatisfaction.

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Characteristics of Service Design

1. Service design is the specification and construction of technologically

organised social practices that deliver value-based benefits to a
particular customer.
2. Service design outcome is intangible by nature.
3. Characterised by simultaneous production and consumption.
4. In an abstract sense, services can be called networked intelligence.
5. Services cannot be inventoried or stored.
6. Services may involve artefacts and other things including communication,
interface, environment and behaviours.
7. Location is crucial for service.
8. Degree and duration of customer contact is far more in service and hence
the range of service system is very wide.
9. No service designer can prescribe the form and characteristics of any
emotional value produced by the service.
10. Demand variability creates underutilisation or unutilisation of service
resources.
11. Service design is always from the customer perspective.
12. Cost and efficiency are key variables in service design.
13. Personalised service makes more impact.
14. Customer participation is very high in service.
15. Service design has to be user friendly.
16. It has to be sustainable.
17. Must provide value to customers.
18. There are strong linkages with back office.
19. Service design must ensure reliability and high quality.

Major Challenges of Service Design

1. Distinctive and varied demands.

2. Services cannot be measured or evaluated.
3. Customer contact is very high.
4. Customer’s expectation during service encounter fluctuates and
hence cannot be determined.

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 5. Achieving competitive advantage is very difficult.
6. Customization has many imperatives.
7. There is a need for continuous improvement in service design.
8. Time to market is very less.

Service Design Methodology

Service design requires tools and methods to develop and control

new elements of the design process such as the speed, efficiency, time and
the communication between the players. Morelli (2006) proposed a general
view of the methodologies for designing services.

The three main directives of the proposal are:

➢ Determining the players involved in the dynamics of the service, using

appropriable analytical tools.

➢ Defining possible service opportunities, verifying cases, sequences of

performances and players role, in order to define the requirements
for the service and its logical and organizational structure.

➢ Portraying the service, using techniques that illustrate all the

components of the service, including physical aspects, interactions,
logical links, and temporary sequences.

In service design methodology, the analytical tools refer to social studies,

ethnogra- phy, anthropology, demography, and technology profiles. Appropriate
descriptions of the tools have been proposed with video ethnography (Buur,
Binder,et al. 2000; Buur and So- endergaard, 2000), and various observation
techniques to collect data about user’s behav- ior (Kumar, 2004). Certain
other methods such as cultural probes have been developed in service
design discipline, which aim at gathering information on customers in their
context of use (Gaver, Dunne et al. 1999; Lindsay and Rocchi, 2003).

The tools of service design aim at creating a blue print of the service, which
explains the nature and characteristics of the encounters in the service. Design
tools include service scenarios (which describe the interaction) and use cases
(which outline the details of time sequences in a service encounter). When used
in service design, the techniques are adopted to include more information on
material and immaterial components of a service, time sequences, and
physical flows (Morelli 2006). Other techniques namely IDEFO and Total
Quality Management (TQM) are used to produce functional models of the
service system

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and to control and monitor its processes. However, such tools seem to be
too rigid to describe services wherein customer participation is more and there is
continuous variation related to the customer’s behaviour.

The end users are not accustomed or familiar with the technical language
and hence to facilitate effective communication of the inner mechanism of
services to the customers, representation techniques are of crucial
importance in service design. Video sketching, video prototypes, etc. are used
to produce fast and effective tools to stimulate customer’s involvement in the
development of the service and their pro-active participation in the value
production process.

Service Blueprinting

Service Blueprinting is a method used in service design to explain

and analyse a proposed service delivery. It is widely considered as the most
useful tool for conceptualizing a service delivery system.

The major steps in service blueprinting are:

a) Establishing frameworks and objectives

b) Determining sequence of customer interface (a flowchart is prepared)
c) Development of time estimates
d) Identifying and planning for potential shortfalls.

Apart from service blue printing, customer experience map is another

service design tool that is used by some prominent service companies.

It is true that the customer perspective needs to be integrated in the service

design process. To analyze new processes, multidisciplinary and
participatory work can be used through prototype testing or performance
analysis.

In the service system, blueprints simplify service complexities by

representing the operations of existing systems. The current set of
operations gives directions to the management to chalk out plans for
operations in future. The service blueprints are task oriented and focus on
observable actions or events. It also assists managers in the decision making
processes related to framing strategies, resources allocation, integration of service
functions, and evaluation of performances. Marketers use blueprints for
developing advertising and promotional campaigns. They can also determine the
key service elements that lead to customer satisfaction. Detailed blueprints
are used extensively in Research

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and Development (R&D) functions. Human Resource managers use service
blueprints for preparing job descriptions, selection criteria, performance
review and appraisal, and compensation package. Managers engaged in
training can use the blueprints for setting training objectives and developing
task based training materials. Detailed service blueprint is a flow chart and
technology experts can evaluate the need for new customised softwares by
adopting the service blue prints.

New Service Development

New service development is the most important phase of service

management. A dynamic organisation’s vision will extend beyond its
existing service. In this context, the innovative capabilities in terms of
service design and development is the essence of growth of the organisation.
The 21st century is witnessing rapid scientific and technological advancements. The
service businesses must align with the progressive attributes of the age and offer
new services. Further, like products, services too will pass through their life
cycle and therefore offering new services in lieu of services moving to the
maturity or decline stage turn out to of paramount importance. New service
development is considered to be an opportunity to meet the unrealised/unmet
needs of the customers. Customer retention is directly related to the
newness of a service or product. To retain customers, service companies
introduce new services. New service development can also go a long way in the
optimum utilization of the spare capacity.

Types of New Services

Philip Kotler stated the following reasons for a product to be labeled as a new
one.

1. New to the world.

2. New to the market
3. New to the firm.

Because of the intangible characteristics of service, Lovelock identifies five

types of new services, which may range from cosmetic style change to
major innovation.

a. Style change- This refers to changing only the tangible elements of the
service, for example, the change in uniform of a restaurant staff or
make-over of the physical evidence of the restaurant.

b. Service improvements- This refers to the changes in the basic features

of the service that is currently being provided in the market, through
value – additions,

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 modifications, and improvements. The operational efficiency is bolstered
through such improvements. For example, computerization of speed
– post bookings and registration of parcels in post offices.

c. Service line extension- This involves adding more to the existing service
line such as setting up banks in rural areas.

d. New services- This refers to the attempt of the service firm to offer new
services to the existing customers. For example, battery charging
along with car washing.

e. Major innovations- This represents the outcome caused by state-of-

the-art technological inventions or research and development.

Stages in New Service Development

IDEA GENERATION

SCREENING OF IDEA

CONCEPT TESTING

BUSINESS ANALYSIS

SERVICE DEVELOPMENT

MARKET TESTING

COMMERCIALISATION

FEEDBACK

The Stages of New Service Development

The stages are described as below:

1. Idea Generation: the nature of new service will be in tune with the
goals, mission, vision, capabilities, and prospective plans of the
organisation. Determining new service strategies is at the crux for the
organization to start generating specific ideas.

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 The ideas can be generated through internal and external sources of the
organisation. Ideas can be collected from sales and marketing staff,
customer service executives, and customer relations staff. The front line
staff is expected to give feedback related to the external environment, i.e.
competitors and customers. Brainstorming sessions involving deliberation
of frontline employees and management staff is a regular activity in
service organization to form and develop new ideas. New ideas may also emerge
during the actual rendering of a service.

External sources for idea generation may include customers’

evaluation of competitor’s strategies, creative inputs of experts, marketing
information system, and gap analysis. Effective customer interaction can
bring to fore key ideas, as it is an important source.

Periodicals related to the service trade, seminars, workshops, and

conferences are yet another important source. Market research, which include
gap analysis must be carried out continuously to identify emerging markets,
evolving market trends, and for matching demand and supply.

The new areas of unmet demands of the customers will be

established through market research. Market research is extremely significant in
the service delivery process. It defines targeting and positioning functions of
a service firm.

2. Screening of Ideas: This stage narrow down on those ideas that are
pragmatic, potential, and promising to the success of service
delivery. The service ideas are screened thoroughly to ensure the
consistency of the idea with the company vision, mission, reputation, and
capability. The screening also aids in avoiding a poor idea to go
further in the new service development stage and put the firm in a
fix. Also, a rigorous screening will help the firm positively consider an
idea from all practical dimensions, which otherwise may be discarded
as a failure rather than adoption.

3. Concept Testing: After Screening, the idea is subjected to concept

testing. This involves converting the service idea in to the service
concept with specific need satisfying aspects. As service is intangible,
concept development and testing is more or less bound to be abstract.
Concept development is done through presentation of the idea to a
selected group with the help of literature and electronic tools to test
their reaction. The appreciation and positioning of the service is
determined in this stage.

4. Business Analysis: The proposed idea is given a business dimension in

this stage. The techno–financial and marketing feasibility is analyzed
in this stage. This stage

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 focuses on the estimation of demand, major competitors, future growth,
price elasticity of demand, cost-volume–profit analysis, marketing
strategies, and the macro environment forces. The service
organization will more on to the next stage after analysing the
viability of the information.

5. Service Development: In this stage, the business proposal is shaped into

the actual service that will be offered to the customer. The tangible
aspects as well as the service delivery process will be designed at
this stage. The marketing campaign, pricing policies, staff recruitment &
training, and the method of service delivery are developed in this stage.

6. Market Testing: The service is now ready to be launched in a test

market. This helps the firm to analyse the marketing mix elements
and rectify the short comings in order to successfully introduce the
service. Designing a test market environment requires creativity and
analytical skills.

7. Commercialisation: The service is launched to a larger audience and

the firm starts earning revenue. The service also starts rolling
through the life cycle stage from commercialization. The service
organization closely monitors the accep- tance and demand of the new
service and evaluates it to ensure sustained service efficiency.

8. Feed back: Feedback is gathered during the introduction of service as

the views of the actual market are important for any changes to be
made in the service.

Challenges in New Service Development

➢ The new service development process is very expensive, time

consuming, and also involves risks.
➢ Go- error (a wrong idea getting clearance) and drop error (a good idea
fails to gain acceptance).
➢ Over estimation of market size
➢ Lack of positioning effectively in the market
➢ Ineffective advertising.
➢ Wrong pricing of service
➢ Lack of quality service design.
➢ Competitor may outwit by introducing a fine quality and high value-add
service.
➢ Swift changes in technology.

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 The influence of service design in the public sector has brought
about new investments in banks, schools hospitals, cultural institutions,
and security infrastructures. Correspondingly, the employment
opportunities in public sector have also grown. Along with these, rapid
changes in the social milieu and outlook have necessitated the State to
consider service design for the re-organisation of public services.

Clinical service redesign is an approach to enhancing quality and

productivity in the public sectors. Such a redesign involves all stakeholders to
ensure national and local quality standards and effective communication. The
Inland Revenue New Zealand has a dedicated Service Design & Implementation
group with separate streams focusing on government, customers, and
transformation design. Specific design methodologies have been adopted and
are being consistently tested.

The Service Design Process

The following are the factors to be considered in the service process

design and implementation:

1. The Nature of Service

The service process explains how a service is provided or delivered to

a customer. Designing a service delivery system is a creative and
innovative process. It is important to understand the nature of service, i.e.,
whether it is process dependent such as banking, insurance, etc. or it is
equipment based such as laundry.

2. Customer Involvement

It goes without saying that for majority of services, customer(s) has

to be present during the acts/performances. As regards service, the
customer is not just the user, but he has a more, pro–active role in the
service delivery. The participation of customer is very significant for
service relationships. It can increase the degree of customization. For an
effective competitive strategy customer involvement is the key. Self–
service is a case in point.

3. Degree of Customer Touch

The physical presence of customer in the service system makes it really

unique. The degree of customer touch can be measured in terms of the time the
customer is present in the system relative to the total service time. As the
degree of customer touch is very high

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in the service system, the timing of demand and the nature of the services
is determined through customer participation. The perceived quality of service is
assessed to a great extent by the customer’s experience. In case of service
systems with low touch points, customers influence is very less as they are
not physically present.

4. Degree of Customisation

Usually a standardised service is designed for high volumes with a

shortly defined and focused service. For such work which are routine in
nature and require a workforce with relatively low levels of technical know-how
there are opportunities for replacement of labour.

But for customized service episodes, more expertise and flexibility

are required. In the above cases more interaction takes places between the
customer and the service staff.

As the service process is not well defined in customised services, the

employees must possess high levels of technical and analytical skills. Service
staff is empowered to take decisions to ensure customer satisfaction.

5. Location

Whether the service delivery should be rendered at the service

provider’s place or should it be offered at the customer’s place is a crucial
question raised during the service delivery process. Some services like painting,
gardening, etc. have to be delivered at home. When customer visits suppliers
there is a greater opportunity to control the delivery experience. However
many services are being offered without the meeting of the customer and the
service provider. For example; ATMs, online travel booking etc.

6. Intensity of Service

Intensity refers to the number of steps involved in service delivery.

Whether the service is high or low in intensity can be figured out by
scanning the service blueprint. The services offered in a hotel are high in
intensity.

Types of Service Processes

Service processes are of different types. The main bases of

distinguishing services are intensity of labour and degree of customisation
with customers’ participation.

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1. The Service Operatives

Some service delivery processes have relatively low labour intensity

and also low degrees of customisation. These are part of the service operatives.
The functions of tourism industry are a classic example.

2. The Service Outlet

In sync with the accentuation of the degree of customisation, the focus on

trouble- shooting, after sales service, and repair service will also be more.
Therefore, from service operatives, the scale of interaction reaches out to
service outlets.

3. Mass Service

Types of Services as in retail operation, educational institutions, and

wholesaling where the degree of labour intensity is high with a relatively low
degree of interface with or customisation forms mass service.

4. Professional Service

When customisation becomes the hallmark of service as offered by lawyers,

doctors, etc, mass service transforms to professional service

Service Design Options

The service design options are realised analysing the following perspectives.

➢ Uncertain service episodes: This refers to the service company’s

incomplete inputs on the nature of service expected by the
customer, his idea about the ancillary requirements, and how the
customer is likely to behave during service episodes.

➢ Extent of customer participation: This refers to the level of customer’s

interest in being part of the service proceedings. When customer
does not have adequate knowledge, skills, and understanding about
the service operations, the extent of customer participation becomes
less.

➢ Demand variability: This refers to the diversity of demands of customers

– whether they want the service to be standardised or customised.

➢ Co-ordination of services: This refers to co-ordination between different

divisions
/ actions delivering a single offering.

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The different service design options according to Larsson R. and Bowen D.E.
(1989) are:

➢ Sequential Standardized Service Design: This is meant to be a customer

dominated design such as self service in which customers take care of the
service offerings after the goods and facilities are dished out by the
employees.

➢ Reciprocal Service Design: This involves the synergy of all the parties of
the service episodes where the output of each becomes the input for
the others. The service outcome heavily depends on the interactions
between the front- line staff and the customers.

➢ Sequential Customized Service Design: The focus here is on the service

staff and the synergy between front office and back office.

➢ Pooled Service Design: In this case, the dominant role is played by the
back office staff. The provision for customer interaction in mass
service is very less and what takes place is customers’ sharing of the
resources and physical products.

A typology of Service Interdependence Patterns Matching Input Uncertainty

C – Customers; F – Front Office Employee(s); B – Back Office

Employee (s); = Main Locus of Interdependence; = Supporting
Interdependencies.
Source: Larsson, R. and Bowen, D.E (1989)

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Service Process Redesign

Service process redesign rejuvenates service processes that have become

outdated. This does not imply that such processes were badly designed
earlier. The paradigm sign shift in technology, customer needs, demand
for value–based offerings and features have resulted in the existing service
processes getting saturated very soon. The changes in the external
environment make existing practices outdated and thereby necessitate
redesigning or creation of new process in order for the service firm to gain
competitive advantage. The organisational stagnation is yet another reason
for adopting redesigning. Institutional stagnation causes natural
deterioration of internal processes, increasing bureaucracy or depreciation
of standards. The symptoms of these are drastic increase in customer
complaints, red-tapism, data redundancy, regulation of value–adding activities,
unnecessary procedures, and undesirable delays.

Service blueprints reflects the reasons for failure and suggest

opportunities for service improvement that might be achieved by
restructuring delivery systems, adding or withdrawing specific elements or
repositioning the service to impress upon other segments.

Service process redesign lays stress on enhanced productivity and

service quality. Re-organizing or re-engineering the ways in which tasks
are carried out has significant potential to increase output. Redesign efforts
focus on achieving the following performance indicators:

(1) Downsizing the number of service failures,

(2) Lowering the time taken from customers log in to a service process to its
completion,
(3) Improved productivity, and
(4) Increased customer satisfaction. All the four indicators have to be
achieved in tandem through the redesign efforts.

Service process redesign encompasses restructuring, rearranging or

replacement of service processes. These efforts can be categorized into the
following types:

➢ Pulling out non – beneficial steps: Services can be streamlined at the

front and back end by focusing on the meritorial part of the service
encounter. The outcome of such efforts is enhanced productivity and
customer satisfaction.

➢ Moving to self service: During service redesign, a need for increased

self- service may emanate, as in some cases service quality gains can be
achieved by adopting that mode.

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 ➢ Facilitating direct service: This form of redesign focuses on bringing the
service to the customer instead of bringing the customer to the
organisation. This is often undertaken as a matter of convenience. It
can also result in more productivity and avoidance of renting building
and sites.

➢ Services branding: When the multiple-connected services are bundled

focusing on a defined segment, it can increase productivity and make
the transaction faster. The marketing cost of each service can also be
reduced. For example the tour operations business where the packages
bundle all the requisite components such as accommodation, shopping,
transportation, entertainment, guide services, etc.

➢ Redesigning the physical components of service processes: Service redesign

involving physical tangible elements of a service process brings about
changes to the facilities and equipment to enhance the service experience.
This leads to convenience, productivity, and customer satisfaction.

Linkages Between Design and Positioning

The way a service is designed will impact the position of the service
in the minds of customers. Similarly, the image or position which the
organisation wants to establish in the minds of the customers will offer
inputs for laying the design framework of the service process. Service
design and positioning are closely associated.

The positioning of a service offering is viewed in the manner it is

perceived by consumers, particularly in relation to competitive offerings. A
service firm or a particular offering of the firm is successfully positioned if it has
established a niche place and maintains a distinctive and desirable identity for
itself in the customers’ minds relative to competitors’ firm or offerings.
Positioning is crucial in establishing a favourable and ideal new service
image. It is also important for existing services in maintaining and
reinforcing a set image in customers’ minds. Sometimes, service repositioning
is employed to transform the image of the service in the minds of the
consumers.

Services may be positioned based on a variety of factors, i.e., on the basis of

the needs they satisfy, the benefits they deliver, specific service features, their
time, place, method of use, and the people who uses them.

The strategies of positioning are based on the quality dimensions of service

design. Therefore the perspectives of service delivery design have to take into
account the reliability, specifications, empathy, promptness, attitude, durability,
responsiveness, USPs, assurance, physical evidence, cost–effectiveness, and
tangibles.

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 Ideals of Service Design

Reliability USPs

Specifications Responsiveness
Ideals of
Empathy Assurance Positioning

Promptness Physical Evidence

Attitude Cost Effectiveness

Durability Tangibles

Positioning

Linkages between Design and Positioning

Summary

This lesson emphasized the significance of designing and managing service

processes.

Service processes are at the core of the service product and organize the customer
experience. Poorly designed service processes often result in slow,
uninteresting, and low–quality service delivery and are likely to create
unhappy customers. Similarly bad processes make it tough for the service
staff to work professionally, resulting in service failures. Service
blueprinting is an effective tool to understand the service system, make
representation, analyse and improve service processes, and offset failures.
Furthermore, blueprinting provides vital insights for service process
redesign.

Service blue printing is a particularly useful technique in the new service

development process by visually depicting all the steps, players, processes, and
physical evidence of the service episode and relationships. This lesson has
highlighted the usefulness of service blueprints.

Service design may be defined as the activity of planning and

organizing people, infrastructure, communication, and material
components of a service in order to improve its quality of delivery and the
interaction and relationship between service providers and customers.
Service design is focused towards creating for the existing services of a company

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new methods and performances of delivery that bring about a make-over in
the nature of the service experience, eventually promising new benefits. The
challenges and road blocks in the path of service design such as distinctive and
varied demands, high customer contact, etc, are discussed in this lesson. The
characteristics of service design are also delineated.

Service design requires tools and methods to develop and control

new elements of the design process and in this context the approaches of service
design methodology is also dealt here. The importance of New Service
Development, types, and stages in NSD are elaborated in this lesson. The types
of service design process and service design options with background
perspectives are also discussed at length. The need for service process
redesign also finds a place in this lesson. This lesson concludes with a
conceptual model establishing the linkages between service design and
positioning.

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