Marketing

Marketing

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Extended QFD: Multi-Channel Service
Concept Design
LUUK SIMONS & HARRY BOUWMAN
Delft University of Technology, The Netherlands
ABSTRACT The objective is to develop and test a multi-channel e-services design supportmethod that
meets relevant design criteria. On basis of the evaluation of existing service concept design methods, we
extracted relevant design criteria, such as customer orientation, channel coherence, channel synergy,
competitive positioning, speed, focus and communication, and developed an alternative service concept
design method, i.e. XQFD: extended quality function deployment focussed on achieving multi-channel
synergy. This paper illustrates how this design support method is used in six cases in the insurance and
telecommunication industry, and test on basis of a qualitative quasi-experiment the added value of this
new design approach. The results indicate that our XQFD method meets relevant design criteria and
that XQFD is an attractive approach due to its clear focus on channel synergy and coherence,
competitive positioning, and the relatively short time span required to come to relevant results.
KEY WORDS: Design, service design, multi-channel strategy, Internet service, case-studies
Introduction
Many traditional (click and brick) firms are struggling in their attempt to turn their Internet
presence into a competitive asset (Simons et al., 2002; Omwando et al., 2003; Latzer &
Schmitz, 2004). We focus on designing Internet or e-service concepts in situations
where other service and distribution channels (e.g. retail stores, personal sales representatives
or contact centres) are already available. These new e-service concepts have to be
aligned with existing channels and together they are expected to offer added value.
Service concepts and service design are among the least studied and understood areas
of services marketing. Even though service design has been identified as ‘perhaps the
most crucial factor for quality’ (Gummesson, 1993), the first concept definition phases
are ill-structured (Simons & Bouwman, 2004), time pressure is high (Gordijn, 2002)
and it is hard to guarantee customer orientation (Ramaswamy, 1996).
Service concept and service design methodologies, which we will discuss in more detail
in the next section, are not well-developed, nor are they used effectively and efficiently, and
Total Quality Management
Vol. 17, No. 8, 1043–1062, October 2006
Correspondence Address: Harry Bouwman, Delft University of Technology, Faculty of Technology, Policy and
Management, Information and Communication Technology, PO BOX 5015, 2600 GA Delft, The Netherlands.
Email: W.A.G.A.Bouwman@tbm.tudelft.nl
1478-3363 Print=1478-3371 Online=06=081043–20 # 2006 Taylor & Francis
DOI: 10.1080=14783360600748042
as a result services are often sloppily designed (Tax & Stuart, 1997; Johnston, 1999;
Goldstein et al., 2002; Menor et al., 2002). It is even more difficult to find methods that
support e-service design for a multi-channel context. A study of 19 cases shows that
e-service (concept) design is a chaotic process that often leads to service failures, channel

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conflicts and financial losses (Simons & Bouwman, 2004). In this paper we present a
method that meets design criteria such as channel coherence and synergy, and using qualitative
quasi-experimental research we show that it is a method thatmeets those criteria better
than an alternative, more general, method. To do so, we start by reviewing existing services
design methods and multi-channel literature in order to extract relevant design criteria. We
will then propose an alternative approach, i.e. extended Quality Functional Deployment
(XQFD). We will answer our research question – ‘Does XQFD score better in terms of
meeting the relevant design requirements than a more general (fundamental engineering)
design approach?’ – by comparing the use and results of both methods in six ‘cases’.
Theory
Review of Existing Service Definition Design Approaches
Existing literature (Tax & Stuart, 1997; Johnston, 1999; Goldstein et al., 2002; Menor
et al., 2002) agrees on the limited contribution made by design methods to service definition
and design. We will briefly discuss traditional product design approaches and
then move on to more specific service definition design literature, such as service
system planning, service blueprinting, service concept definition, and QFD.
Cross (1994) provides an overall framework to describe a product design process. His
traditional ‘fundamental engineering’ design process covers all aspects of the design
process, from problem clarification to detailed design (see Table 1). His approach provides
a rigorous sequence of steps towards a final result. According to Clausing (1994), technical
Table 1. Steps in ‘fundamental engineering’
Design process stage Description of stage and method
1. Clarifying objectives Clarify primary and secondary design objectives, and the
relationships between them. An objectives tree can be used for
this.
2. Establishing functions Establish the functions required and the system boundary of a
new design. Function analysis can be used as a tool.
3. Setting requirements Make an accurate specification of the performance required of a
design solution. Performance specification is the
corresponding method.
4. Determining characteristics Set targets for the engineering characteristics of a product, such
that they satisfy customer requirements. Quality Function
Deployment (QFD) can be used for this.
5. Generating alternatives Generate the complete range of alternative design solutions and
hence widen the search for new solutions. A morphological
chart can be used here.
6. Evaluating alternatives Compare the utility values of alternative design proposals, on the
basis of their performance with regard to differentially weighted
objectives. Weighted objectives are proposed as method.
7. Improving details Increase or maintain the value of an offer to its purchaser, whilst
reducing the cost. Value engineering can be used here.
1044 L. Simons & H. Bouwman
design principles address only part of the overall design problem. Clausing calls this
‘partial design’. According to services literature, partial design and local sub-optimization
are among the highest risks in designing and implementing a total service offer and system
(Ramaswamy, 1996).
The second method we want to describe is Service system planning. Service system
planning takes a broad approach. The service system is made up of (1) the customer,
including needs and expectations; (2) the service concept; (3) the service delivery
system; (4) the way the service is perceived by both service providers and customers;
and (5) corporate culture and values, which guides the long term service orientation
(Normann, 2000). The design and evaluation of new services which a firm adds to its portfolio
can be aided by looking in turn at the various service system components, and by
asking how they will (or should) be affected. Heskett et al. (1997) provide a lower level
insight into the service system by zooming in on the service delivery system as such.
The design of service delivery systems should encompass the roles people play (service
providers), technology, physical facilities, equipment and service delivery processes.
Assessing these components yields a useful checklist that can prove helpful in the evaluation
process by listing the various components and by asking how they will be affected by
the new service. However, this method offers no guidelines for the management of the
design process, and nor does it include a rigorous follow-up process that will lead to a finished
design. It offers no new design that is based on customer requirements. The most
methodical, process- and design-oriented approach is Service Blueprinting (Shostack,
1984). Shostack argues that, compared to the manufacturing systems design, service
systems design suffers from a number of problems: he mentions difficulties involved in
describing and documenting the processes involved, which lead to intangible results;
trial and error approaches that fail to include tests with regard to completeness, rationality
and need fulfilment; the absence of a department supervising the design; a gradual
approach to quality controls; and a tendency for systems to be described rather than visualized.
Where services are concerned, the traditional flowcharting methods that are typically
used in service blueprinting are limited. They do not, for example, chart customer
involvement in the service provision and provide little insight into the organizational
structure and its significance in terms of service processes. In strategic service marketing,
Clark et al. (2000) have introduced an approach based on Service Concept Definition.
Their approach explicitly defines the service concept as a bridge between the what and
the how of a new service. The Service Concept Definition is a ‘detailed description of
the customer needs to be satisfied, how they are to be satisfied, what is to be done for
the customer and how this is to be achieved’ (Goldstein et al., 2002, p. 123). In their
approach there is a direct connection between company strategy and customer value.
Dividing a service into the ‘what’ and ‘how’ makes it possible to identify service elements,
to check them against customer requirements or needs, and subsequently to design and
deliver those elements. However, as design methodologies go it is rather limited. Many
detailed steps still need to me made before the concept is ready to be implemented. To
manage the design process it is not enough to have a concept. In fact, this approach at
best provides ‘a direction or point at the horizon for the design outcome’ (Simons &
Bouwman, 2004, p. 4), and it certainly does not set an agenda for concrete actions. The
fifth approach we discuss is Quality Function Deployment (QFD) (Hauser & Clausing,
1988; Clausing, 1994; Cristiano et al., 2000), which is a systematic, matrix-based,
visual approach to designing quality products and services. It is based on the principle
Multi-Channel Service Concept Design 1045
that the quality should be specified as early as possible in the life cycle. Quality requirements
are obtained directly from the customers. A list of customer priorities, in words used by the
customers, is used an explicit yardstick throughout the design process. Moreover, possible
service functions and solutions are prioritized according to a matrix that is grounded in customer
priorities and connected to competitive scores. QFD uses a series of interconnected
matrices that establish the quality relationships between higher-level (i.e. product or
service level) design activities and their associated lower-level (i.e. sub-process, subsystem
etc.) activities. The higher-level matrices can be used in planning the design concept,
whereas the lower-level matrices are useful in detailed design and post-implementation
monitoring and improvement. The design standards established early on are carried
through to later matrices (Herzwurm et al., 2002). The use of these matrices enables and
stimulates communication between multidisciplinary development teams.
Although all of the methods we discussed so far have several shortcomings (in terms of rigor,
customer-oriented prioritizing and the evaluation of service alternatives), they also have
characteristics that are beneficial to certain aspects of the design process. Fundamental Engineering
makes design steps explicit; service system planning provides a useful checklist of the
main components involved in the service process; Service Blueprinting contains a genuine
process for developing a service (concept) design, providing a visualization of the service
system as an integrated whole, including participants and processes. Service Concept Definition
lists the necessary service elements, as well as integrating business strategy,more specifically
supplier requirements, with customer needs. And, finally, QFD emphasizes the need to
use a complete set of specifications that traceable to customer requirements, and optimize communications
within interdisciplinary design teams. If there is one thing all these methods have
in common, it is that they all emphasize the fact that it is vital that a focus on the customer
throughout the design process and communication be included in the service design.
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