Strategic and Service Design

Difference between product and service

Designed as results of productive performance, services represent complementary and alternative solutions to physical products. Products (like cars) are tools that can be owned, while services (like Enjoy) can only be used. In products, the activity is performed by the user (how drives the car), in services it is divided between user and supplier (if the app doesn't approve your journey you won't use the service). Despite this, the difference between product and service is still not so clear today. This is why we need to introduce the word "system". iPhone for example, is a system because it is both a product and a service at the same time and these two parts are closely connected, they cannot exist without each other. What is an iPhone without the service included in the product? It is the same with Google products, products that have been integrated with services. This is due to servitization, products were reshaped with new

A service is a form of intangible product that is provided to customers to fulfill a specific need or desire. Unlike physical products, services cannot be touched or stored, but they can still provide value and enhance the overall customer experience.

When designing a service, it is important to consider various factors that can impact its success. One of these factors is the concept of touchpoints. Touchpoints are the various points of interaction between the customer and the service provider. These touchpoints can include physical elements like websites, apps, or delivery systems, as well as intangible elements like customer support or communication channels.

For a service to be effective, it needs to be designed with certain characteristics in mind. These characteristics include:

1. Intangibility: Services cannot be touched or physically experienced. They are experienced through interactions and experiences.
2. Inseparability: Services are typically produced and consumed simultaneously. The service provider and the customer are often present during the service delivery.
3. Perishability: Services cannot be stored or saved for later use. If a service is not consumed within a certain timeframe, its value is lost.
4. Variability: Services can vary from user to user, from time to time, and from context to context. They need to be adaptable and customizable to meet the needs of different users and situations.

By understanding these characteristics and designing the right touchpoints, service providers can create a seamless and satisfying customer experience. This can lead to increased customer satisfaction, loyalty, and ultimately, business success.

As there is no possibility to "store" a service or its unused capacity for later use. After its consumption it will go to another person since you don't own it.

Inseparable (from time and space): in services, production and consumption typically happen at the same time, determining an immediate outcome for the customer or the customer's resources.

Do the services always remain the same or do they have to evolve? In relation to what? They should evolve in relation to economic and social characteristics that are happening. They could also change from technologies: for example, the Touch ID changed the way in which people can be recognized just by facial ID and pay on the web. Technologies push services to change and work in a different way in order to implement the experience of the user. Now Amazon is also introducing the palm system for payments because of privacy issues: the number of points of controls that we have in our palm are 5,000 more than those we can identify.

In our facerecognition. Another thing that changed a lot with the introduction of new technologies is the supermarket sector. Amazon Go, for example, are those kinds of supermarkets where the client can take whatever he wants because they directly scan what the person takes from the shelves and by using people's Amazon account at the end the client can just go out without apparently paying. There was actually a big fight and discussion about it because people said this service was not inclusive since same people don't have a credit card, it is just for rich people.

Services can also change from global phenomena: Airbnb is an example. There was a city like Milan where a design exhibition was going on in a specific week every year so, as a hotel was too expensive, they made an experiment. They put a mattress in one room and they asked some guys if it was okay for them to share the room and pay 10% compared to the hotel price. Airbnb is still evolving, they offer experiences with local

places etc. Another example is Urban Sports Club: it always happens that once the customer has a subscription to a sport activity he can just go to that place. To put things differently, if you are subscribed to the gym and the day after you want to go swimming you can't and you have to pay more. The same phenomenon happens when the client travels. He is kind of wasting/losing money since he can't use the service. Urban Sports Club is born from this changing way of living, so the client has the possibility to decide the size of his subscription and the more he pays the more he can enter in different centers, even in different cities.

What is service design?

The term service design was introduced in 1982 by the American marketing expert G. Lynn Shostack, a marketing expert when she published "Breaking Free from Product Marketing" (product vs. service). She then published "How to Design a Service", the first time the term service design was used (how to visualize).

In 1984 she published "Designing Services that Deliver" (the importance of services). People realized that we can't just compete with products. It is a very old concept but it was introduced later. Service design is all about making the service you deliver useful, usable, efficient, effective and desirable (UK design council, 2010). We always need to think about the touchpoints, a complicated job. "Service design aims to ensure service interfaces are useful, usable and desirable from the client's point of view and effective, efficient and distinctive from the supplier's point of view" (Birgit Mager, 2009). "Service design is design for experience that happens over time and across different touchpoints" (Simon Clatworthy, 2011). "Service design orchestrates service elements such as the physical environment, people (customers and employees), and service delivery process to help customers co-create their desired

experiences” (Teixeira, Patricio, Nunes, Fisk & Constantine, 2012)

The bike sharing service is an important example. In Milan there is one based on station bases.

This kind of service was having two main problems: these bicycles were really heavy and the second is that there were not too many station bases. The evolution was the model without a station base, that could be left wherever the consumer wanted. This led to other problems, no one was thinking about the problem of parking, there were no designed areas for parking and people threw them in fountains. The evolution was Jump that can just be left close to a vertical surface like a pole.

Service design should also focus on designing customers' experience. The challenge of understanding and designing for the emotional aspects of people’s interaction with products, environments and other individuals.

Example: coffee. Everything starts with a commodity (a good which is not differentiated from the others) and coffee has a

Certain price for kilo that could be around 12 cent. Then you have the product, that has a brand, a packaging and it costs around 3 euro per ½ kilo. Let's jump into a service: you can go to a bar and ask for a coffee, which contains 30 grams of it and we pay 1 euro for. Finally we arrive at the experience like Starbacks: let's think of the one we have close to Duomo. If you enter there is a machine where they show you how roroster coffee etc. they give you the experience of understanding the process of making coffee and a well designed place where you can enjoy your coffee. The Price there is around 6 euro for a cappuccino, this is because they offer a premium experience, no other competitors offer the same experience.

Example: the Reebok store that was opened in Piazza Gae Aulenti. The shop was created to have a kind of gym inside where people could do some activities and receive discounts. Another case in the sports industry is the Adidas Runbase close to Arco della Pace.

where you can't buy the items but just try them in the gym after giving them your ID card and see if you like them or not, if your experience is positive they'll give you a coupon to buy them online.

Example: Presso was born in 2013 as a startup in Milan close to Corso Sarpi. The emerging need was organizing parties and meetings without the problem of the number of guests. The places they offer look like a kitchen or a living room where you can do "serata cinema" or "festa di compleanno" etc. then unfortunately with covid they had problems and reduced the service.

Remember for the exam!

We should remember: the different characteristics of the service; the difference between products and services that are not as far as we could think; how the service should create an experience because it would represent a competitive advantage; the service should have many different touchpoints and finally the service should be always ready to evolve.

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