Design of the Service

LESSON 3

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 LEARNING OBJECTIVES
• 3.1 Concept of the design
• 3.2 Service classification: a design issue
• 3.3 Objects of the service processes
• 3.4 Customer contact
• 3.5 Service blueprint
• 3.6 The 3 logics

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 3.1 Concept of the design
• The traditional understanding of the word ‘design’ is ‘a
plan or drawing produced to show the look and function
or workings of a building, garment or other object before
it is built or made’ (The New Oxford Dictionary of English,
Oxford University Press, 1998).
• Importantly, and in keeping with product design, there
will still be tangible entities that need to be addressed,
e.g. color, furnishings, equipment, lighting etc.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
Service design, therefore, should encapsulate all aspects
of that experience:
• The role of the customer
• The balance between front and back office
• The impact of technology, e.g. the involvement of
equipment
• The location of service consumption (e.g. a fixed single
facility, multi-site, mobile)
• Employee skills/behavior and degree of discretion
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
Service design, therefore, should encapsulate all aspects
of that experience:
• The nature of the service process, e.g. standardized,
customized
• The significance of procedures
• The nature and channels of communication
• The contribution of the physical evidence (see Chapter 4) to
service satisfaction
• How design advances operational efficiency and service
quality. Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 Activity: Let’s take the service design of a massage
parlor
• The role of the customer:
• The balance between front and back office:
• The impact of technology, e.g. the involvement of equipment:
• The location of service consumption (e.g. a fixed single facility, multi-site,
mobile): 10 ASPECTS TO ENCLOSE

• Employee skills/behavior and degree of discretion: > Role of customers

> Front and Back-office balance

• The nature of the service process, e.g. standardized, customized: > technology impact
> service consumption location
> Employee skills & Discretion degree

• The significance of procedures: > Service process nature

> Procedure significance
> Communication channel
• The nature and channels of communication: > Physical evidence contribution
> How design advances service quality

• The contribution of the physical evidence (see Chapter 4) to service satisfaction:

• How design advances operational efficiency and service quality:
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 > Marketing

3 Important functions should work together > HRM

> Operations Mgt.

and be actively involved in the design of a service

• Does the uniform create • Will the uniform make the • Does the uniform feel
the right impression or employee feel confident, comfortable? Is it easily
image? Will it elicit a credible and professional? cleaned? Will it interfere
positive, or negative Will it degrade or humiliate with performance? Does it
response from customers? the
Prepared by: Prof. Lode Joy E. Bade, MBA, employee?
LPT
help customers identify
Customer Response Degrade employee?
employees easily?
Employee Identification
 BLUEPRINT
• From this you can identify moments of
truth together with a sense of how the
service operates
• By bringing together all the facets of a
Can everything spelt out in service it should focus your mind on how
a service works and why.
a blueprint?
NO • Organization climate and employee
attitudes are uncontrollable
• But it should serve as a building block for
addressing these and other matters of
relevance in the delivery of service
quality.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 3.2 Service classification: A design issue
• Thomas, in 1978, proposed a classification of services as either ‘equipment-based’ or
3

‘people-based’.
• Equipment-based services were further classified as being automated (vending
machine, car wash), monitored by relatively unskilled operators (taxis, dry cleaning),
or operated by skilled operators (airlines, computer timesharing).
• People-based services rely on unskilled labor (janitorial services, guards), skilled
labor (car repair, plumbing) or professionals (lawyers, accountants) for service
production.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

• Thomas further acknowledged that ‘many companies are in
more than one type of business’.
• This portrayal of the mixture of ‘high-tech’ and ‘high-touch’ has
been echoed more recently. Although this classification is from
an operations standpoint, it can serve to remind us of an ongoing
tension between mechanization of a service and a desire for
human contact on the part of the customer.
According to Thomas, placing a service on the spectrum
necessitates answering two questions:
• 1 How is the service rendered?
• 2 What type of equipment or people render the service?
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• Maister and Lovelock, in 1982, gave prominence to the customer in a 2x2 matrix
for service classification

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

• Schmenner, in 1986, suggested two elements (Figure 3.1) that can be used to classify
different kinds of service businesses:

• Degree of labor intensity, which is defined as the ratio of the labor cost
incurred to the value of the plant and equipment. As it is a ratio, Schmenner
observes that even a hospital employing large numbers of doctors, nurses,
technicians remains comparatively low in labor intensity because of the very
expensive plant and equipment it deploys.

• Degree of interaction and customization, which is acknowledged by

Schmenner as a more confusing element as it combines two similar but
distinct concepts. A high level of interaction is present where a customer
can actively intervene in the service process. High customization is in
evidence when a service is designed to respond to individual needs and
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
preferences.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• Haywood-Farmer, in 1988, pointed to the diversity of the service sector,
prompting the need for classification to make the management job
possible.
• Using dimensions from earlier authors, he sought to remove any existing
confusion (over previous classifications) by advocating a three-dimensional
model

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

Application of a three-dimensional classification
scheme

Degree of contact
Should the customer be present?

Degree of labor-intensity
Is it possible to automate the service?

Degree of service
customization
How standardized it is?

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• Wemmerlöv, in 1989, identified three variables that can aid the design of service
systems: type of customer contact (discussed later in chapter), degree of
routinization and fluid service process.
The degree of routinization is characterized as having the
following attributes:
• Low level of task variety and technical skills
• Low level of information exchange between the service system
and customer
• Both service employee and customer make few judgmental
decisions
• The volume of goods, people, or information per unit of time is
usually high
• The arrival rate of customers or jobs is often fairly predictable
or controlled by the service system
• The process can involve several customers or objects
simultaneously
• The response time to a customer-initiated service request is
often short.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
The degree of fluid service process is characterized
as having the following attributes:
• Higher levels of technical skills
• Larger amounts of information to be exchanged
between the service system and customer
• The service employee going through
unprogrammed search processes and making
several judgmental decisions
• A usually low unit of time for handling the volume
of goods, people or information
• High uncertainty of the workflow
• One customer (or object) at a time
• A fairly long response time to a customer-initiated
service.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 3.3 Objects of the service processes
• Wemmerlöv argued that his classification scheme can, amongst other things,
‘help management to better understand design and operational aspects of service
systems by relating classified service processes to critical management tasks’.
Wemmerlöv uses of the taxonomy

“no customer contact” “rigid process” “goods” Manufacturing

“direct customer “interaction with service “people /

“fluid process” Pure Service
contact” workers” information”

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 3.4 Customer contact
• A central and recurring theme in the classification and design of service systems is
the extent and nature of customer contact.
• To address the issue of customer contact and service operational efficiency,
Chase proposed that service systems should be viewed as falling along a continuum
from high customer contact to low customer contact.
• He proposed a formula which stated that: where, customer contact time refers to
the physical presence of the customer in the system and service creation time refers
to the work process entailed in providing the service.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

• Extent of contact is the percentage of time the customer must be in the
system relative to the total time it takes to serve him/her.
SAMPLE:
If we apply the formula hypothetically in two contrasting situations, hotels
(high customer contact) and the bank branch office (low customer contact),
the efficiency measure might be:

Customer input to the hotel facility would be defined as rather passive, whereas a relatively low
contact organization like a bank branch office may experience a degree of uncertainty in terms of
customer requests.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• In addition, Chase expanded the notion of contact from the
original of ‘physical presence in the system’ to a range of
‘contact technologies’ (mail, telephone, face-to-face).

• Chase’s model, however, remains of value even today. The

physical contact he professed to be so concerned about is still for
many services a matter of significant importance.

• Contact remained unclear with further reformulation of the

original model defining distance contact as direct, indirect and
none. Unfortunately this approach simply reaffirms the method
of contact over the nature of the contact.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
Where the method of contact appears important is in
determining the division of a service between front and
back office:
The front office is that part of the system directly
experienced and visible to the customer. This is where
the service is performed and is thereby open to customer
scrutiny, e.g. the hotel dining room.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

The back office is that part of the system from which the
customer is (physically) excluded, e.g. the hotel kitchens. It is
often referred to as the manufacturing side of the service, not
seen by the customer. This means that the technical core of an
organization (commonly referred to as the production process)
is sealed off from any uncertainties that may occur in other
parts of the organization. The back office becomes decoupled,
separated from the front office and is allowed to work without
hindrance or interference. The main objective is to enable
efficiency to be maximized in the ‘production processes’.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 Significant concepts for designing work service between
the customer, front and back office
• Input uncertainty – refers to the service organization’s incomplete
knowledge of what the customer is going to bring to the service and how
he or she is likely to behave. Input uncertainty will vary with the two
environmental variables: customer willingness to participate and
diversity of demand.
(1) Customer willingness to participate – refers to how far
customers wish to play an active part in the service. Customers’ capacity to
become involved can be limited by lack of knowledge, skills and
understanding of their role.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 Significant concepts for designing work service between
the customer, front and back office
(2)Diversity of demands – refers to the uniqueness of
customer demands. Are they to be met in a customized or
standardized way?
Interdependencies – refers to different patterns with respect to
division of service work (between front and back office and
customer) and customization versus standardization of standard
actions and interdependencies.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 Four service design options
• Sequential standardized service design: a customer-
dominated design in which they serve themselves after
service employees have provided the goods and facilities
needed for self-service. It is a standardized service in which
the front and back office can be decoupled to allow for
efficient delivery of service.
• Reciprocal service design: joint participation of the parties
‘in which the output of each becomes the input for the
others’. The service is produced largely on the basis of
significant interactions between front-office employees and
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

customers.
 Four service design options
• Sequential customized service design: the bulk of the work
here is performed by the service employees in a system of
strong interdependence between back and front offices.
• Pooled service design: most of the work done by an
efficient back office, largely decoupled from front-office
disturbances. Customers do not interact extensively with
service employees but engage in the sharing of resources
that makes mass service possible.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 3.5 Service blueprint
• A service blueprint is basically a flowchart of the service process. It is a map in which
all the elements or activities, their sequencing and interaction, can be visualized.
• There are a number of essential steps in blueprinting a service.
1 Draw, in diagrammatic form, all the components and
processes (Figure 3.4). The service in this case is simple and
clear-cut and the map is straightforward. More complex
services may require large, complicated diagrams.
2 Identify the fail points – where things might go wrong. In
Figure 3.4 the shoe shiner may pick up the wrong wax.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 3.5 Service blueprint
3 Set executional standards – these are tolerances (band or range) set
around each function and regarded as acceptable from a customer and
cost viewpoint. Time is a good example. In Figure 3.4 the standard
execution time is 2 minutes, and research showed that the customer
would tolerate up to 5 minutes before lowering his or her assessment of
quality.
4 Identify all the evidence that is available to the customer. Each item
represents an encounter point.
5 Analyze profitability – delays in service execution through errors or
working too slowly affects profit. The shoe shiner estimates the cost of
delay; anything greater than 4 minutes execution time and he loses
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
money.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• In making the distinction, a service organization needs to
address the following questions:
● How much of the service does the customer need to
witness/experience?
● Will greater involvement lead to more understanding and
favorable impressions, i.e. improved effectiveness?
● What effect will there be on efficiency if the customer is allowed
greater access to the service process?

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
• A process cannot be improved until there is a clear understanding of how it works.
• There may well be different viewpoints as to how a process should be performed
and monitored.
The areas for investigation should be:
● Process activities
● Information required to perform the process
● Products generated by the process, e.g. documents, services, etc.
● People and equipment required to perform the process
● Documents that direct how the process is to be accomplished.

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 ASSIGNMENT

CREATE A PROCESS FLOW DIAGRAM OF

A SERVICE THAT YOU HAVE
EXPERIENCED LATELY. (30 POINTS)

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT

 3.6 The 3 logics
• To fully appreciate the workings of any service system reference
must be made to what is known as ‘the 3 logics’.
• Logic is defined here as ‘a way of reasoning’ or a ‘perspective’.
• Underlining the significance of the 3 logics, Kingmann-Brundage
stresses that they are ‘crucial to accurate diagnosis of any service
situation’
• The attractiveness of this approach lies in its quest for a
seamless (without failure/breakdown) and unified (cross-
functional cooperation) service system
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 The 3 logics are defined as follows:
• Customer logic is the underlying rationale that drives customers’
behavior, based on their needs and wants. It will be evident in
what customers expect of the service and how it might compare
with other services.
• Technical logic is seen as the ‘engine’ of the service operation. It
is essentially concerned with the way things are done dictated
largely by organization policy, rules and regulations.
• Employee logic is the underlying rationale that drives employee
behavior. It will be evident in employees’ perception of working
conditions, working methods, organization of work and role
clarity.
Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
 THANK YOU

Source: Services Marketing Management 3rd Edition

Prepared by: Prof. Lode Joy E. Bade, MBA, LPT
Peter Mudie and Angela Pirrie