MBA651

Managing Service-Based
Industries
Workshop 3
Service Experience and Design
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 This Topic’s Big Idea

‘While co-creation has been examined in various

domains, including strategy, management and
marketing, its application finds particular
significance in the tourism and hospitality context
given its inherent nature as a potentially proactive
service provider.’

Adopted from: Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation and higher order
customer engagement in hospitality and tourism services: A critical review", International Journal of
Contemporary Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Learning Objectives

1. Understand the fundamentals of service

experience through the lens of co-production
and co-creation
2. Understand service-dominant logic (S-D logic)
and ‘moments of truth’
3. Explore new service development and design
processes
4. Explore the key elements of the Service Design
Overview Model
 The Service Experience

A service encounter is A service experience is

often referred to as the defined as the subjective
period of time during personal reactions and
which a consumer feelings by consumers
directly interacts with a when consuming or using
service. a service.

For any organisation to have a competitive advantage, the

quality of service experience must take centre stage.

Watch Me: https://www.youtube.com/watch?v=3kZG8c3OqYM

But how can we achieve this?

 Co-Production and Co-Creation
While the modality of service transactions has evolved
from traditional concepts of production, most current
service providers cater to a combination of
differentiated amenities that belie different value
propositions corresponding to the two modalities of:

Co-creation

Co-production

Adopted from: Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation and higher order
customer engagement in hospitality and tourism services: A critical review", International Journal of
Contemporary Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Co-Production and Co-Creation Cont.
Key drivers in conceiving “co-creation” include
advances and maturation in information
technologies, accelerated consumer knowledge
and expectations and the logic of ingraining
consumer needs and expectations across an
organisation’s value chain.
Through this, organisations and their customers
are able to define and solve problems jointly while
“creating an experience environment in which
consumers can have active dialogue and co-
construct personalised experiences”.
Adopted from: Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation and higher order customer
engagement in hospitality and tourism services: A critical review", International Journal of Contemporary
Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Workshop Activity
Concept Application

Let’s consider Airbnb cooking experiences.

Watch Me: https://www.youtube.com/watch?v=E15lzlzSMAk

In your opinion, how does Airbnb co-create and co-

produce service experiences? Discuss how traditional
accommodation providers can replicate this.

Share your thoughts with the rest of the class.

 Service-Dominant Logic and
Co-Creation
Service-dominant logic (S-D logic) is based on the value
creation opportunity for service providers and customers to
co-create value together.

• It holds that all providers are essentially service

providers who exchange service, as service itself is the
fundamental basis of exchange.
• It indicates that value is always co-created with the
customer during interaction with and activation of a set of
resources.

Adopted from: Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation and higher order
customer engagement in hospitality and tourism services: A critical review", International Journal of
Contemporary Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Service-Dominant Logic and
Co-Creation Cont.
The process can be further divided into five main stages,
which are as follows:
1. The development of antecedent conditions related to
macro-environmental factors and changes in consumer
culture;
2. The development of motivations that encourage
consumers to engage in co-creation;
3. The calculation of co-creation cost benefits;
4. Activation during which consumers become fully
engaged in the co-creation activities; and
5. The generation of outputs and evaluation of the co-
creation process.
Adopted from: Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation and higher order
customer engagement in hospitality and tourism services: A critical review", International Journal of
Contemporary Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Service-Dominant Logic and
Co-Creation Cont.
Inherent in the service A value co-creation
production system are co- mechanism consists of:
creative interactions through
which service providers
influence customer value
creation. Provider Customer
• In the context of services, sphere sphere
value is jointly created by
providers and customers
through interactions and Joint
sphere
determined by customers
in their consumption
process.
Adopted from: Yu, E & Sangiorgi, D 2018, Service Design as an Approach to Implement the Value Cocreation Perspective in New Service
Development, Journal of Service Research, vol. 21, issue 1, pp.40 – 58, viewed 18th of April 2020
https://journals.sagepub.com/doi/pdf/10.1177/1094670517709356; Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation
and higher order customer engagement in hospitality and tourism services: A critical review", International Journal of Contemporary
Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Value Co-Creation

When active customers “give input as a co-developer or co-

designer” in the resource production processes, value co-
creation happens as customers are “most familiar with their
own lives” and are therefore “the best people to pre-
evaluate the value-in-use of products and services”

In moving toward higher levels of co-creation, it is

imperative that the firm engage and support the customers
during the co-creation activities by providing relevant
information and necessary resources, as well as obtaining
information on their preferences.
Adopted from: Yu, E & Sangiorgi, D 2018, Service Design as an Approach to Implement the Value Cocreation Perspective in New Service
Development, Journal of Service Research, vol. 21, issue 1, pp.40 – 58, viewed 18th of April 2020
https://journals.sagepub.com/doi/pdf/10.1177/1094670517709356; Chathoth, P, Ungson, G, Harrington, R & Chan, E. 2016, "Co-creation
and higher order customer engagement in hospitality and tourism services: A critical review", International Journal of Contemporary
Hospitality Management, Vol. 28 No. 2, pp. 222-245.
 Marriot Example
Marriott launched a co-creative
platform that engages the
customer during the service
production process.

“Travelers can submit ideas in

categories such as:
Technology, Eat & Drink, Work
& Play, Health & Wellness,
Style & Design and Outside
the Box”, which co-shape their
experiences in conjunction
with the Marriott experience. Click Here: TravelBrilliantly.com

Adopted from: Vivion, N 2013, “Marriott steps (un)squarely into Starwood territory with rebrand and co-creation platform”, Phocus
Wire, retrieved 25th of April 2020, https://www.phocuswire.com/Marriott-steps-unsquarely-into-Starwood-territory-with-rebrand-and-co-
creation-platform
 Workshop Activity
Practical Application

Using your smart telecommunication device, conduct

Google Search to find an example of tourism and
hospitality service that strongly focuses on the co-
creative platform.

Share your example with the rest of the class by

describing the approach taken to ensure co-creation
and co-production.
 New Service Development (NSD)
This concept aggregates NSD activities into four simplified
phases:
“Development”
“Design” is about “Analysis” includes “Launch” includes
relates to
formulating service business analysis full-scale launch
designing service
concepts and and project and post launch
processes and
generating ideas. authorisation. review.
systems.

The focus of NSD activities is shifting from developing

market offerings as outputs to facilitating value co-creation
as outcomes.

This concept will be reviewed in further depth next week.

Adopted from: Yu, E & Sangiorgi, D 2018, Service Design as an Approach to Implement the Value Cocreation
Perspective in New Service Development, Journal of Service Research, vol. 21, issue 1, pp.40 – 58, viewed 18th
of April 2020 https://journals.sagepub.com/doi/pdf/10.1177/1094670517709356
 Service Design
Service Design – is the design of the overall experience of
a service as well as the design of the process and strategy
to provide that service.
• Is involved in the ongoing live-cycle of services and
offers continuous evolution
• Is all about making services usable, easy and desirable
• Can be used to re-design an existing service to make it
work better for users, or it can be used to create an
entirely new service
• It closely relates to experience-centred approaches to
innovation
Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of
April 2020 https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-
Design.pdf
 Service Design Cont.
Service Design also reflects collaborative ways of innovation,
following the principles of participatory design and co-design.
• The experience-centred approach uses users’ personal
contexts and experiences as a basis for envisioning and
developing superior service experiences and systems.

Service Design also relies on user-centred methods and

creative tools for different innovation activities and purposes.
• The object of service design spans service interfaces and
experiences, service contexts and systems and
organisational changes.

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Workshop Activity

Reflective Exercise

Thinking of the most recent unpleasant tourism or

hospitality experience that you’ve had, explain how
service design can assist service-based organisations
in delivering better service encounters.

Share your thoughts with the rest of the class.

 Service Interface
The service interface is the pattern derived from various
contacts that a customer has with a brand through different
touchpoints of a service journey. It is established over time
and is the platform for the service experience.

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Interface Cont.
The "moment of truth" occurs in the relationship when
customers experience what organisations have to offer
- when an organisation and the service it provides,
meets face-to-face with the consumer - the point where
a potential customer becomes an actual customer.
• The outcome of this often determines whether the
tourist/visitor will visit a particular place again or not.
• The good "moments of truth" could be categorised as
moments of magic whilst the bad ones are often
seen as moments of misery.

Adopted from: Sarpong, S 2016, The Service Industry and the "Moment of Truth": The Quest for the Holy
Grail, Athens Journal of Tourism, vol 3, Issue 1, pp.25 – 40, retrieved 25th of April 2020
https://www.athensjournals.gr/tourism/2016-3-1-2-Sarpong.pdf
 Service Design: Client’s Perspective

To design services it is important to establish a good

understanding of the goals, motivations and latent needs
that customers have.

Services so far provided by organisations are thought

through and planned (designed) mostly from the provider
perspective.

The point of difference that service design approach offers

is the development of service systems which are focusing
on the customer as well as on the organisation.

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Design: Unique Features

Customers encounter different touchpoints over time.

Touchpoints are experience puzzle

pieces of the service. They
complement the overall experience
across the service interface.

Each piece helps to shape a whole.

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Workshop Activity
Reflective Exercise

Thinking of the most recent unpleasant tourism or

hospitality experience that you’ve discussed in the previous
activity, consider the following:

In which touchpoint did this experience occur? Which

moments of truth did you experience? Were these
moments of truth positive or negative? How were these
moments of truth addressed?

Share your thoughts with the rest of the class.

 Service Design:
A Multi-Disciplinary Process

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Design: Interactive
Approach
Service design enables behaviours and dynamics.
• It offers customers the possibility to connect a
potential with a result.
• It provides all resources and components that are
necessary for a customer to do what they want to do.
• A customer is an integral part of the service
performance.
One big advantage with services is that it is much easier
to make changes. Even though it is new and not easy,
depending on the complexity of a service it is very
feasible to prototype services and to test implementation
models.
Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Design: Ongoing Process
Given the variety of services that exist, service design
has to cope with different situations and contexts to
products.
• Service design looks at a scope from long-term
strategies and design processes to implementing
consistently across organisations in small details such
as the style of a text message.

What is unique about services is that they live. They can

not be pre-produced and stored until somebody employs
them.
Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Design Benefits
Service design can play a crucial part in the success of any
organisation and can deliver the following drivers of
change:
True understanding of market Higher value with the resources
needs available
Better efficiency Connects organisation and clients

New perspectives on future Higher quality service experiences

development as basis of success

Changes in organisational culture Differentiation against competition

Higher effectiveness Brand affinity

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Service Design Overview

Adopted from: Moritz, S 2005, Service Design: Practical access to an evolving field, KISD, viewed 13th of April 2020
https://www.servicedesigninstitute.com/wp-content/uploads/2018/12/Practical-Access-to-Service-Design.pdf
 Workshop Activity
Mini Case Study Analysis

Individually, read the case ‘The Disney Model of

Customer Care’.

By using the Service Design Overview Model,

identify and map out all of the ‘Guestology” service
design components.

Present your work to your workshop facilitator.

 Next Week

Service Design Process: Methods and Tools