The document discusses service innovation and design, outlining challenges in service innovation, types of service innovations, and the stages of the service innovation process. It emphasizes the importance of involving customers and employees in service design through techniques like service blueprinting, which visually maps the customer experience and service delivery process from both frontstage and backstage perspectives. Service blueprinting helps identify opportunities for innovation, understand customer expectations and the ideal experience, and facilitate strategic and tactical service improvements.

1. 14-*
Delivering Service Through
Intermediaries & Electronic ChannelsService DistributionDirect
or Company-Owned ChannelsFranchisingAgents and
BrokersElectronic ChannelsCommon Issues Involving
IntermediariesStrategies for Effective Service Delivery Through
Intermediaries
Chapter
14
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc.
All rights reserved.
14-*
Objectives for Chapter 14:
Delivering Service Through IntermediariesIdentify the primary
channels through which services are delivered to end customers.
Provide examples of each of the key service intermediaries.
Discuss the benefits and challenges of each method of service
delivery.
Outline the strategies that are used to manage service delivery
through intermediaries.
14-*

2. Service Provider Participantsservice principal
(originator)creates the service concept(like a manufacturer)
service deliverer (intermediary)entity that interacts with the
customer in the execution of the service(like a
distributor/wholesaler)
14-*
Services IntermediariesFranchiseesservice outlets licensed by a
principal to deliver a unique service concept it has createde.g.,
Jiffy Lube, Blockbuster, McDonald’s
Agents and Brokersrepresentatives who distribute and sell the
services of one or more service supplierse.g., travel agents,
independent insurance agents
Electronic Channelsall forms of service provision through
electronic meanse.g., ATMs, university video courses, TaxCut
software
14-*
Benefits and Challenges for
Franchisers of Service
14-*
Benefits and Challenges for
Franchisees of Service

3. 14-*
Benefits and Challenges in Distributing Services through
Agents and Brokers
14-*
Benefits and Challenges in Electronic Distribution of Services
14-*
Common Issues Involving Intermediariesconflict over
objectives and performance
difficulty controlling quality and consistency across outlets
tension between empowerment and control
channel ambiguity
14-*
Strategies for Effective Service Delivery Through
IntermediariesControl Strategies:MeasurementReview
Partnering Strategies:Alignment of goalsConsultation and
cooperationEmpowerment Strategies:Help the intermediary
develop customer-oriented service processesProvide needed
support systemsDevelop intermediaries to deliver service
qualityChange to a cooperative management structure
14-*

4. H&R Block: Providing Multiple Service Channel Options
13-*
Customers’ Roles in Service
DeliveryThe Importance of Customers in Service Cocreation
and Delivery
Customers’ Roles
Self-Service Technologies—The Ultimate in Customer
Participation
Strategies for Enhancing Customer Participation
Chapter
13
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc.
All rights reserved.
13-*
Objectives for Chapter 13:
Customers’ Roles in Service DeliveryIllustrate the importance
of customers in successful service delivery and cocreation of
service experiences.
Discuss the variety of roles that service customers play:
productive resources for the organization, contributors to
quality and satisfaction, competitors.
Explain strategies for involving service customers effectively to

5. increase satisfaction, quality, and productivity.
13-*
Levels of Customer Participation across Different Services
13-*
How Customers Widen the Service Performance GapLack of
understanding of their roles
Not being willing or able to perform their roles
No rewards for “good performance”
Interfering with other customers
Incompatible market segments
13-*
Importance of Other (“Fellow”) Customers
in Service DeliveryOther customers can detract from
satisfaction:disruptive behaviorsoverly demanding
behaviorsexcessive crowdingincompatible needsOther customers
can enhance satisfaction:mere
presencesocialization/friendshipsroles: assistants, teachers,
supporters, mentors
13-*
Customer Roles in Service Delivery
Productive Resources
Contributors to Service Quality and Satisfaction
Competitors

7. 13-*
Services Production Continuum
13-*
Customers as Productive Resourcescustomers can be thought of
as “partial employees”contributing effort, time, or other
resources to the production process
customer inputs can affect organization’s productivity
key issue:should customers’ roles be expanded? reduced?
13-*
Customers as Contributors to

8. Service Quality and SatisfactionCustomers can contribute
to:their own satisfaction with the serviceby performing their
role effectivelyby working with the service provider
the quality of the service they receiveby asking questionsby
taking responsibility for their own satisfactionby complaining
when there is a service failure
13-*
Customers as Competitorscustomers may “compete” with the
service provider“internal exchange” vs. “external
exchange”internal/external decision often based on: expertise
capacityresources capacitytime capacityeconomic
rewardspsychic rewardstrustcontrol
13-*
Strategies for Enhancing Customer Participation
13-*
Strategies for Enhancing
Customer ParticipationDefine customers’ jobshelping
oneselfhelping otherspromoting the company
Recruit, educate, and reward customersrecruit the right
customerseducate and train customers to perform
effectivelyreward customers for their contributionsavoid
negative outcomes of inappropriate customer participation
Manage the customer mix

9. 13-*
Characteristics of Service that Increase the Importance of
Compatible Segments
Copyright © 2013 by The McGraw-Hill Companies, Inc. All
rights reserved.
McGraw-Hill/Irwin
Physical Evidence and the
Servicescape
Physical Evidence
Types of Servicescapes
Strategic Roles of the Servicescape
Framework for Understanding Servicescape Effects on Behavior
Guidelines for Physical Evidence Strategy
Chapter
10
10-2

10. Objectives for Chapter 10:
Physical Evidence and the Servicescape
Explain the impact of physical evidence, particularly the
servicescape, on customer perceptions and experiences.
Illustrate differences in types of servicescapes, the roles played
by the servicescape, and the implications for strategy.
Explain why the servicescape affects customer and employee
behavior, using a framework based in marketing, organizational
behavior, and environmental psychology.
Present elements of an effective physical evidence strategy.
10-3
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.”
Physical facility = Servicescape
10-4

11. Elements of Physical Evidence
10-5
Examples of Physical Evidence from
the Customer’s Point of View
10-6
Flow
Meaning
Satisfaction

12. Emotional connections to company
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.
How Does Physical Evidence Affect the Customer Experience?
10-7
Typology of Service Organizations Based on Form and Use of
the Servicescape
10-8
Roles of the Servicescape
Package
conveys expectations
influences perceptions
Facilitator
facilitates the flow of the service delivery process
provides information (how am I to act?)

13. facilitates the ordering process (how does this work?)
facilitates service delivery
Socializer
facilitates interaction between:
customers and employees
customers and fellow customers
Differentiator
sets provider apart from competition in the mind of the
consumer
10-9
Dental laser “drill”
Speedi-Lube Spells Out the Service Offering
10-10
A Framework for Understanding Environment-User

14. Relationships in Service Organizations
10-11
Understanding Servicescape
Effects on Behavior
Stimulus-organism-response theory
Stimulus = multidimensional environment
Organism = customers and employees
Response = behaviors directed at the environment
10-12
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

15. Desire not to stay, etc.
10-13
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
10-14
Internal Responses to the Servicescape
Cognition: environment can affect beliefs about a place and the
people and products found in that place
Emotion: color, décor, music, scent affect mood

16. Pleasure/displeasure
Degree of arousal (amount of stimulation)
Physiology: volume, temperature, air quality, lighting can cause
physical discomfort and even pain
Ergonomics
10-15
Variations in Individual Response
Personality differences
Arousal seekers vs. arousal avoiders
Environmental screeners
Purpose for being in the servicescape
Business/pleasure
Utilitarian/hedonistic
Temporary mood state
10-16
Environmental Dimensions
Ambient Conditions: affect the 5 senses, but may be

17. imperceptible or affect us subconsciously
Temperature, lighting, noise, music, scent, color
Spatial Layout and Functionality: size, shape, and arrangement
of machinery, equipment, and furnishings and the ability of
such to facilitate customer and employee goals
Accessibility, aesthetics, seating comfort
Signs, Symbols, Artifacts: explicit or implicit communication of
meaning; often culturally embedded; important in forming first
impressions
Way-finding, labels, rules of behavior, creating aesthetic
impression
10-17
Cheers: The Third Place
10-18

18. 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
10-19
Copyright © 2013 by The McGraw-Hill Companies, Inc. All
rights reserved.
McGraw-Hill/Irwin

19. Part 4
ALIGNING SERVICE DESIGN AND STANDARDS
8-2
CUSTOMER
COMPANY
Gap 2: The Service Design and Standards Gap
Customer-driven
service designs and standards
Company perceptions of customer expectations
Provider Gap 2
8-3

20. Key Factors Leading to Provider Gap 2
8-4
Service Innovation and Design
Challenges of Service Innovation and Design
Important Considerations for Service Innovation
Types of Service Innovations
Stages in Service Innovation and Development
Service Blueprinting: A Technique for Service Innovation and
Design
Chapter
8
8-5

21. Objectives for Chapter 8:
Service Innovation and Design
Describe the challenges inherent in service innovation and
design.
Present an array of different types of service innovations,
including service offering innovation, innovating around
customer roles, and innovation through service solutions.
Discuss the importance of engaging customers and employees
and employing service design thinking in service innovation.
Present the stages and unique elements of the service innovation
and development process.
Demonstrate the value of service blueprinting and how to
develop and read service blueprints.
8-6
Risks of Relying on Words Alone to
Describe Services
Oversimplification
Incompleteness
Subjectivity
Biased Interpretation

22. 8-7
Important Considerations for Service Innovation
Involve customers and employees
Employ service design thinking and techniques
8-8
Important Considerations for Service Innovation
The five principles of service design thinking:
User-centered: Services should be experienced and designed
through the customers eyes
Cocreative: All stakeholders should be included in the service
design process
Sequencing: A service should be visualized as a sequence of
interrelated actions
Evidencing: Intangible services should be visualized in terms of
physical artifacts
Holistic: The entre environment of a service should be
considered

23. 8-9
Types of Service Offering Innovations
Major or radical innovations
Start-up businesses
New services for the currently served market
Service line extensions
Service improvements
Style changes
8-10

24. Service Innovation and Development Process
8-11
New Service Strategy Matrix for Identifying Growth
Opportunities
8-12
Service Blueprinting
A tool for simultaneously depicting the service process, the
points of customer contact, and the evidence of service from the
customer’s point of view.
8-13

25. Service Blueprint Components
Customer Actions
line of interaction
Visible Contact Employee Actions
line of visibility
Invisible Contact Employee Actions
line of internal interaction
Support Processes
Physical Evidence
8-14
Service Blueprint Components
8-15

26. Blueprint for Express Mail Delivery Service
8-16
Blueprint for Overnight Hotel Stay Service
8-17
Blueprint for DVD Rental Kiosk
8-18

27. Benefits of Service Blueprinting
Provides a platform for innovation.
Recognizes roles and interdependencies among functions,
people, and organizations.
Facilitates both strategic and tactical innovations.
Transfers and stores innovation and service knowledge.
Designs moments of truth from the customer’s point of view.
Suggests critical points for measurement and feedback in the
service process.
Clarifies competitive positioning.
Provides understanding of the ideal customer experience.
8-19
Building a Service Blueprint
8-20