Service Concept

A service concept is a shared and articulated understanding of the nature of the service provided and received, which should capture information about the organising idea, the service provided and the service received- the experience and outcomes. The service concept is an important way of capturing the nature of a service so that customers know what they are getÝng. It is more emotional than a business model, more solid than a vision can often be hard to understand. A service concept is a shred and articulated understanding of the nature of the service provided and received, which should have information about  The organising idea- the essence of the service bought or used by the customer.  The service provided- The service process and its outputs  The service received: o The customer experience- the customer's interpretation of and response to the service and their involvement in the service process. o The service outcomes- the results for the customer of the service process and their experience including benefits, emotions and judgements. The service concept can either be directly stated by the organization or can be inferred from marketing information.  The organising idea: provides a powerful way of reminding the service provider what the customer is really buying. Helps allocate resources and service design. Helps the organization focus on what is really important. There may be more than one organizing idea for a service provider.  The customer experience: Customers often judge the quality of the outcome by the quality of the experience they receive.  The service outcomes: difference between outcomes for customers versus outputs from the service process. The main service outcomes are products, benefits, value, emotions and judgements. The cost of service to a customer is a combination of the financial price together with the cost, or inconvenience, of making the purchase. To understand value, these costs to the customers have to be weighed against the benefits customers perceive in the service. The articulation and agreement of a service concept is a meas not only of identifying the nature of the business but also of providing it with a sense of purpose and common direction.  What service concept is not:  The service promise (what the organization will do for the customer. The service concept is an agreed view of the service provided and received.)  The business proposition  The 4 P's. This process ignores that customer's perception of service is more intangible.  Business model  Vision (describes what the organization hopes to become in the future. Service Concept is more focused in the present.)  Mission  An idea (service concept includes details about the service provided as opposed to the notion of a service).  Brand How can managers use service concept? [needs to be communicated internally]  At the strategic level, the service concept can be used to define and communicate the nature of the business and to create new service concepts to drive innovation and strategic advantage (through capability mapping) Can be used to define and communicate the nature of the business. Employees within the same organization may have different notions of this. The differing perspectives can result in inconsistent service and annoyed customers.  Service concept can therefore act as an alignment tool that links together different organizational function with a common purpose and a standard against which actions can be checked.  Developing new service concepts can drive innovation and provide strategic advantage by opening up new markets or differentiating the organization from the competition [competitive advantage].  Will encourage service managers to look at some of the key assumptions that may be implicit in current service provision. By thinking carefully about the market, the different customer segments and the needs of the customers in those segments, while also having an in-depth understanding of the core competencies of the operation, managers may be able to develop totally new and innovative concepts that have great appeal to customers and give the organization a significant competitive advantage.  Having agreed and articulated the service concept, operations managers then need to design and acquire the resources (inputs) and design and develop the process and experiences required to deliver that concept to the organization's customers.  The service concept can be used as a driver for long-term service development.