BA 2
Chapter 5: Goods and Service Design
Designing Goods & Services
Steps 1 and 2: Strategic Mission/Vision, Market Analysis
and Competitive Priorities
Steps 3: Customer Benefit Package Design and
Configuration
Based on:
• A solid understanding of customer needs and target
markets
• The value that customers place on time, place,
information, entertainment, exchange, and form
Step 4: Detailed Goods, Services, and Process Design
Prototype testing
• Process by which a model is constructed to test a
product’s performance under actual operating
conditions, as well as consumer reactions to the
prototypes.
• Tests consumer reactions to prototypes
Step 5: Market Introduction/Deployment
• Step 6: Marketplace Evaluation
– Evaluate how well the goods and services are selling
and customers’ reactions to them.
Customer-Focused Design
Guides the design, creation, and marketing of goods and
services by integrating the voice of the customer into all
decisions
– Voice of the customer: Customer requirements as
expressed in customers’ own words
Quality Function Deployment (QFD): – An approach to
guide the design, creation, and marketing of goods and
services by integrating the voice of the customer into all
decisions – Applied to a specific manufactured good or
service, or to the entire customer benefit package (CBP)
Reliability:
– the probability that a manufactured good, piece of
equipment, or system performs its intended function
for a stated period of time under specified operating
conditions.
Design for Manufacturability (DFM)
Process of designing a product for efficient production
at the highest level of quality
– Product simplification: Process of trying to simplify
designs to reduce complexity and costs that helps in
improving:
• Productivity
• Quality
• Flexibility
• Customer satisfaction
Design for Environment (DfE)
Explicit consideration of environmental concerns during
the design of goods, services, and processes – Includes:
• Designing for recycling
• Disassembly
Service-Delivery System Design Elements
1. Facility location
– Affects a customer’s travel time
– Important competitive priority in a service business
• Facility layout – Affects process flow, costs, and
customer perception and satisfaction
2. Servicescape – Physical evidence that a customer
uses to form an impression
– Provides the behavioral setting where service
encounters take place
– Principal dimensions
- Ambient conditions, spatial layout and functionality,
and signs, symbols, and artifacts
– Types
• Lean servicescape environments
• Elaborate servicescape environments
3. Service process and job design – Process of
developing an efficient sequence of activities to satisfy
internal and external customer requirements
4. Technology and information support systems –
Ensure speed, accuracy, customization, and flexibility in
designing services
 Service-Encounter Design
Focuses on the interaction, directly or indirectly,
between the service provider(s) and the customer
Elements:
• Customer contact behavior and skills
• Service provider selection, development, and
empowerment
• Recognition and reward
Service recovery and guarantees
1. Customer Contact Behavior & Skills
A. Customer Contact
• Physical or virtual presence of customers in
the service delivery system
Types
• High-contact systems
• Low-contact systems
B. Customer Contact Requirements
Measurable performance levels that define the quality
of customer contact with representatives of an
organization
• Include: – Response time – Service management skills
such as cross-selling other services – Behavioral
requirements
2. Service-Provider Selection, Development, and
Empowerment
• Focus on meeting and exceeding customer
expectations
3. Recognition and Reward
• Help motivate and retain excellent service providers –
Key motivational factors
• Recognition
• Advancement
• Achievement
• Nature of the work
• Good compensation system
4. Service Guarantees and Recovery Service
Guarantees
• Promise to reward and compensate a customer if a
service upset occurs during the service experience
– Service upset: Problem that a customer faces with the
service delivery system
• Referred to by terms such as service failure, error,
defect, mistake, and crisis
Types
– Explicit service guarantee
• Given in writing • Included in service provider
publications and advertisements

– Implicit guarantee
• Not given in writing • Implied in everything a service
provider does
Service Recovery
• Process of correcting a service upset and satisfying
customers
Framework for Goods and Service Design in
LensCrafters
Steps 1 and 2: Strategic Mission, Market Analysis, and
Competitive Priorities
Chapter 8:
Facility Layout
Specific arrangement of physical facilities
Layout Patterns in Configuring Facilities
 Product layout
 Cellular layout
 Process layout
 Fixed-position layout
Cellular Layout