Unit 2: Service development & design
Services Marketing notes · PTU syllabus (BBA 611-18)
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Unit summary
A service has to be designed before it can be delivered consistently. This unit covers the challenges of designing intangible services, types of new services, core and supplementary elements (the flower of service), the new service development process, service blueprinting, and the role of physical evidence and the servicescape.
After this unit you can
- Explain the challenges of service design and types of new services
- Distinguish core and supplementary service elements
- Describe the new service development process
- Draw and interpret a service blueprint and explain the servicescape
PTU syllabus topics
- Challenges of service design
- types of new services
- core and supplementary elements
- the new service development process
- service blueprinting
- physical evidence and the servicescape
- 1Physical evidence
What the customer sees
- 2Customer actions
Steps the customer takes
- 3Onstage contact
Visible employee actions
- 4Backstage contact
Invisible employee actions
- 5Support processes
Systems behind the scenes
Topic 1
Challenges of service design
- Intangibility: a service cannot be fully described in words or a drawing; each person imagines it differently.
- Oversimplification: describing a complex process ("we give fast loans") hides dozens of steps.
- Incompleteness: details that matter to customers get left out.
- Subjectivity: each employee interprets the service through their own experience.
- Biased interpretation: words like "responsive" or "friendly" mean different things to different people.
Exam tip
The solution to these challenges is service blueprinting — mention it at the end of any answer on design challenges.
Topic 2
Types of new services
- Major or radical innovation
New services for undefined markets (first online banking)
- Start-up business
New service in an existing market (a new cab aggregator)
- New services for the current market
Offered to existing customers (bank adds insurance)
- Service line extension
Augment the existing line (new menu items)
- Service improvement
Change features of an existing service (faster check-in)
- Style change
Visible but modest change (new uniforms, décor)
Topic 3
Core and supplementary elements
The core service is the central benefit the customer buys (transport in an airline). Supplementary services facilitate and enhance it. Lovelock's Flower of Service shows eight petals around the core.
Facilitating: Information
Facilitating: Order-taking
Facilitating: Billing
Facilitating: Payment
Enhancing: Consultation
Enhancing: Hospitality
Enhancing: Safekeeping
Enhancing: Exceptions
Example
In a hotel: core = a room for the night; information (website), order-taking (booking), billing and payment facilitate; hospitality (welcome drink), safekeeping (locker), consultation (concierge) and exceptions (late checkout) enhance.
Topic 4
The new service development process
- 1
Business strategy
Vision and objectives
- 2
New service strategy
Which markets and types of service
- 3
Idea generation
Customers, employees, competitors
- 4
Concept development and evaluation
Describe and test the concept
- 5
Business analysis
Demand, costs, profitability
- 6
Service development and testing
Blueprint, prototype, train staff
- 7
Market testing
Pilot in a few branches
- 8
Commercialisation
Full launch
- 9
Post-introduction evaluation
Review and refine
The first five stages are front-end planning; the last four are implementation.
Topic 5
Service blueprinting
A service blueprint is a picture or map that portrays the service system so that everyone involved can understand it objectively (Shostack). It shows the process both from the customer's and the firm's side.
- 1
Physical evidence
- 2
Customer actions
- 3
Line of interaction
- 4
Onstage contact employee actions
- 5
Line of visibility
- 6
Backstage contact employee actions
- 7
Line of internal interaction
- 8
Support processes
- Line of interaction: direct customer–firm contact.
- Line of visibility: separates what the customer sees from what they do not.
- Line of internal interaction: separates contact staff from support functions (IT, kitchen, accounts).
- Fail points (where things may go wrong) and wait points are marked.
Example
Overnight hotel stay: customer arrives → check-in (onstage: front desk) → luggage to room (bellboy) → room service (backstage: kitchen prepares) → checkout (billing system supports).
Uses: identifies fail points, trains employees, shows the customer's view, aids redesign and cost control.
Topic 6
Physical evidence and the servicescape
Physical evidence = the environment in which the service is delivered + any tangible commodities that facilitate performance or communication. The servicescape (Bitner, 1992) is the built environment.
Package
Wraps the service and conveys an image
Facilitator
Helps customers and staff perform (clear signage)
Socialiser
Shapes interaction among customers and staff
Differentiator
Sets the firm apart from competitors
Dimensions of the servicescape
- Ambient conditions: temperature, lighting, music, scent, noise.
- Spatial layout and functionality: arrangement of furniture and equipment.
- Signs, symbols and artefacts: signage, décor, certificates on the wall.
Types: self-service (ATM, website), interpersonal (hotel, hospital), remote (call centre, telecom).
Key terms
- Core service
- The central benefit the customer buys
- Flower of Service
- Eight supplementary services around the core (Lovelock)
- Service blueprint
- A map of the service process showing customer actions, contact and support processes
- Line of visibility
- Separates onstage activities from backstage activities
- Servicescape
- The physical environment where a service is delivered
Quick revision
- Design challenges: oversimplification, incompleteness, subjectivity, biased interpretation.
- Six types of new services from major innovation to style change.
- Flower: 4 facilitating + 4 enhancing petals.
- NSD process: front-end planning → implementation.
- Blueprint lines: interaction, visibility, internal interaction.
- Servicescape roles: package, facilitator, socialiser, differentiator.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What are the challenges of service design?
- Q2.Distinguish core and supplementary services.
- Q3.What is the Flower of Service?
- Q4.What is a line of visibility?
- Q5.Define servicescape.
- Q6.What are fail points?
Long-answer questions
- Q1.Explain the types of new services with examples.
- Q2.Explain the new service development process.
- Q3.What is service blueprinting? Explain its components with an example.
- Q4.Discuss the role of physical evidence and the servicescape in services marketing.
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