Chapter 8

Question 1

What are the types of new services ?

Answer 1

1) Major or radical innovations
2) Start-up businesses
3) New services for the currently served market
4) Service line extensions
5) Service improvements.
6) Style changes.

Question 2

What is the Service Innovation and Development Process ?

Answer 2

Front-end planning :

0) Business strategy development or review
1) Idea generation
2) Concept development and evaluation
3) Business analysis

Implementation :

4) Service development and testing
5) Market testing
6) Commercialization
7) Post-introduction evaluation

Question 3

New service strategy matrix for identifying growth opportunities.
What do you do for Existing services to current customers ?

Answer 3

Share building

Question 4

New services for current customers ?

Answer 4

Service development

Question 5

Existing services for new customers ?

Answer 5

Market development

Question 6

New services for new customers ?

Answer 6

Diversification

Question 7

What is a service blueprint ?

Answer 7

A tool for simultaneously depicting the service process, the points of customer contact and the evidence of service from the customer’s point of vie.
3 different things in a service blueprint :
1) Process
2) Points of contact
3) Evidence

Question 8

What are the 6 steps of the service blueprint ?

Answer 8

1) Identify the process to be blueprinted
2) Identify the customer or customer segment
3) Map the process from the customer’s point of view
4) Map contact employee actions, onstage and backstage, and/or technology actions.
5) Link contact activities to needed support functions
6) Add evidence of service at each customer action step

Question 9

What are the application of service blueprints ?

Answer 9

1) New service development - concept development
2) Supporting a “zero defects” culture - managing relability
3) Service recovery strategies - conducting…

Question 10

What are the benefits in electronic distribution of services ?

Answer 10

Benefits :

- Consistent…

Question 11

What are the two service provider participants ?

Answer 11

1) Service principal (originator) - Creates the service concept - like a manufacturer)
2) Service deliverer (intermediary) - Entity that interacts with the customer in the execution of the service (like a distributor/ wholesaler)

Question 12

What are the service intermediaries ?

Answer 12

1) Franchisees (Ex: MacDonald)

2) Agent and Brokers (Ex: Travel agent, independent insurance agents)

Question 13

What are the benefits of franchisers of service ?

Answer 13

Benefits :

• Leveraged business format for greater expansion and revenues
• Knowledge of local markets

Question 14

What are the Challenges of franchises of service ?

Answer 14

The main challenges for franchisers are :

• Difficulty in maintaining and motivating franchisees.
• Control of customer relationship by intermediary.

Question 15

What are the different variations in demand relative to capacity ?

Answer 15

• Excess demand
• Demand exceeds optimum capacity
• Ideal use
• Excess capacity

Question 16

What are the capacity constraints ?

Answer 16

The capacity constraints are :

• Time, labour, equipment, and facilities
• Optimal versus maximum use of capacity

Question 17

What are the demand pattern ?

Answer 17

• Predictable cycles.

- Random demand fluctuations.

Question 18

What can you do if demand is too high ?

Answer 18

1) Communicate busy days and times to customers
2) Modify timing and location of service delivery
3) Offer incentives for non-peak usage
4) Set priorities by taking care of loyal or high-need usage
5) Charge full price for the service - no discounts.

Question 19

What can you do if demand is too low ?

Answer 19

1) Schedule downtime during periods of low demand
2) Perform maintenance, renovations.
3) Schedule vacations
4) Schedule employee training
5) Lay off employees
6) Modify or move facilities

Question 20

What is the Yield ?

Answer 20

Yield = Actual revenue / Potential revenue

Question 21

What is the revenue management most profitable ?

Answer 21

The revenue management is most profitable where :

1) Relatively fixed capacity
2) The product is sold in advance
3) Fluctuating demand
4) Customers who arrive or reserve early are more price sensitive than those who arrive or reserve late.

Question 22

What are the Qeuing strategies ?

Answer 22

1) Employ operational logic
2) Establish a reservation process
3) Differentiate waiting customers
4) Make waiting fun, or at least tolerable (put TV on the queue)

Question 23

What are the issues to consider in making waiting more tolerable ?

Answer 23

1) Unoccupied time feels longer than occupied time
2) Pre-process waits feel longer than in-process waits
3) Unexplained waits seem longer than explained waits.
4) The more valuable the service, the longer the customer will wait
5) Solo waits feel longer than group waits.