Service

Manageme Online
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QTRE301
Lecture: Mai Anh Nguyen (MA)
 Chapter 3: Service concepts & Understanding
customers and relationship
OBJECTIVES
⮚ What is a service concept?
⮚ How can managers use the service concept?
 01
Service concept
What is a
service
concept?
 What is a service concept?
The service concept is an important way of capturing the nature of a service so that customers
know what they are getting and staff understands what they are providing.

A service concept is a shared and articulated understanding of the nature of the service provided
and received, which should capture information about:

● The organizing idea – What is being offered?

● The service provided – The process, resources, and interactions that create value.

● The service received:

The customer experience – the customer’s direct and personal interpretation of, and response
to, their interaction with and participation in the service process, and its outputs, involving their
journey through a series of touch points/steps.
The service outcomes – ‘products’, benefits, emotions, judgements, and intentions
What is a service concept?

A service concept is more emotional than a

business model, deeper than a brand, more
complex than a good idea and more solid than a
vision.

It’s a clear description of:

What is being provided
To whom (target customer)
How it will be delivered
The value/benefit it creates
 1.1 Organizing idea

The Organising Idea is a simple, powerful statement that reminds the

service provider what the customer is really buying — not just the
product or service, but the experience or value they expect.

🧠 It acts like a magnifying glass: helping the organisation focus its

design, resources, and staff on what truly matters to the customer.

Why It Matters:
• Aligns the whole team with the customer’s real needs
• Drives service design, staff training, and customer
communication
• Encourages organisations to differentiate between types of
customers
 1.1 Organizing idea
Service Provider 💡 Organising Idea Implication
“Quick, cheap meals between Focus on speed, affordability,
University Canteen
classes” high volume
“Empowering students to land Offers CV workshops, mock
Career Center
their dream job” interviews, job fairs
“Accessible care for student Prioritizes mental health,
Student Health Center
well-being” flexible hours, walk-ins

University Library

On-campus Gym

International Office

Student Housing Office

 1.1 Organizing idea
Service Provider 💡 Organising Idea Implication
“Quick, cheap meals between Focus on speed, affordability,
University Canteen
classes” high volume
“Empowering students to land Offers CV workshops, mock
Career Center
their dream job” interviews, job fairs
“Accessible care for student Prioritizes mental health,
Student Health Center
well-being” flexible hours, walk-ins
“A peaceful, resource-rich Offers quiet zones, digital
University Library
space for academic success” databases, helpful staff
“Fitness made flexible for busy Extended hours, short classes,
On-campus Gym
students” no long contracts
“Making global study accessible Personalized support for
International Office
and safe” exchange students
“A safe and affordable home Emphasis on security, support
Student Housing Office
away from home” services, affordability
 1.2. Customer experience

Customer Experience refers to how customers

feel and what they perceive while interacting with a
service — before, during, and after it is delivered.
🔍 Customers often judge the overall quality of a
service not by its technical outcome, but by their
personal experience of the process.

Key Insight:
People don’t just want a service to be delivered —
they want to feel seen, heard, and respected while
it’s being delivered.
 1.3. Service outcomes

Service outcomes are the benefits and value the

customer actually experiences or gains from using
a service — not just the technical result (output)
delivered by the provider.
Output (Provider’s Outcome (Customer’s
Service
Perspective) Perspective)
Surgery Replaced hip Can walk again without pain
Education Passed final exam Better job prospects
Quick, cost-efficient lunch
Conference Catering Full-course meal
during event
Safe and smooth driving
Car Repair Fixed engine
experience
 1.3. Service outcomes

Key Insight:
Providers often focus on what they produce — but customers
care about what they get out of it in their real life.
⚠ This mismatch leads to what's called "provider push" —
offering what the provider is good at or used to, not what
customers actually need today.

Can a hotel succeed in output but fail in outcome? (Give an

example.)
What small changes improve emotional outcomes for guests?
 2. Service Value

Service value is the customer’s own judgment of

whether a service is worth it — based on what they
get vs. what they give up.
🡪 It’s not just about price — it includes time, effort,
emotions, and convenience.

Perceived Value =
Benefits received (tangible & intangible)
____________________________
Total cost (money + effort + time + emotional
sacrifice)
Example – Restaurant:
Costs (Sacrifice) Benefits
Price of meal Delicious food
Time waiting Attentive service
Effort to get there Beautiful ambiance
Parking issues Special celebration feeling

🡪 Why it matters for service providers:

•Customers define value, not the business
•Value ≠ low price → It’s about the total experience
•Delivering perceived value = competitive advantage
•Marketers must understand what benefits customers care about
•Operators must design processes that maximize value and minimize cost
 2. Service Value

1. Have you ever paid a high price for a service but

still felt it was “good value”?
2. What sacrifices do you often make when using ride-
hailing apps or food delivery?
3. Can a cheap service still feel like poor value?
 3. What service concept is not
❌ Not This ✅ Why Not?
That’s what the company says it will do — but the service concept is a shared
1. Service Promise
understanding of what is actually delivered and experienced.
2. Business A business proposition is how the company wants to be seen by all stakeholders — but
Proposition customers may see it differently.
These break the service into marketing components (like Price, Place, People), but they
3. The marketing mix
miss the emotional and experiential whole.
The business model focuses on how the company makes money — not what the
4. Business Model
customer receives and feels.
A vision is about the future; the service concept is about what happens now in the
5. Vision
service.
6. Mission Statement A mission is usually philosophical or inspirational, not operational or customer-facing.
An idea is early and vague. A service concept is a detailed, shared understanding of
7. An Idea
delivery and experience.
Brands focus on identity and perception. The service concept is more detailed, guiding
8. Brand
both marketing and operations to align.
 Choose 01
organization and
draft their
service concept
4. How can managers use the service concept?

4.1. Defining and Communicating the Nature of

the Business
✅ Why? To create a shared understanding of what
the service really is

Even managers within the same team may have

different views!

Clarify to both employees and customers:

“What we do”
“What customers should expect”
4. How can managers use the service concept?

4.2. Creating Organisational Alignment

The service concept is a lens through which internal
departments see each other’s roles.
- It ensures that marketing, operations, HR, and
customer service are working toward the same
promise.
- Must be written, discussed, and agreed upon to work.
4. How can managers use the service concept?

4.3. Driving Innovation and Strategic Advantage

New service concepts help:
• Enter new markets
• Challenge old assumptions
• Stand out from the competition

🡪 Study the example of Thảo Cầm Viên

4. How can managers use the service concept?
Purpose Example
Ensuring consistent service across
Alignment
departments
Making service expectations clear to staff and
Communication
customers
Innovation Designing new services for new segments
Specification SOPs and process design
Change Management Testing the impact of service redesign
 Key takeaway

1. What is the Service Concept?

2. What a service is NOT?
3. How Managers Use It