1
New service development using
gap-based quality function deployment
A mobile telecommunication case
Jing-hua Li
Zhejiang Gongshang UniversityP.R.China
02/06/2008
2
Research questions
• Why study new service development ?
• Why combine the Gaps and QFD ?
• Why employ mobile telecom case ?
3
Contents
• Combining two models ?
• New model
• Mobile phones in China
• What this means ?
4
Combining two models?
• House of quality
• Gap model
5
House of quality
customerneeds
engineeringmetrics
benchmarking
on needs
target and final specs
technicalcorrelations
relativeimportance
relationships between
customer needs and
engineering metrics
6Fitzsimmons, Fitzsimmons, 2001
1
1
1
1
1
Volvo Dealer
Village Volvo
Re
lativ
e
1 2 3 4 5 Customer Expectations
Reliability
Responsivene ss
Assurance
Empathy
Tangibles
Comparison with Volvo Dealer
Weighted score
Improvement difficulty rank
O O
O Weak
Medium
* Strong
9
9
9
Att
itu
de
Ca
pa
cit
y
Info
rma
tiio
n
Eq
uip
me
nt
8
7
7
6 6
5 5
5
5
4
4
3 3
3
3
2
2 2
2
+
_
+
Customer Perceptions
o
+
+
+
o
o
o
o
+
o o
o
o o
o Village Volvo
+ Volvo Dealer
Service Elements
Relationships
127 82 63 102 65
1
* *
7
Gap model
Customer Expectations Customer Demands
Service DeliveryManagement perceptions of customer expectations
Service Specifications
Communication
Service design
Customer / Marketing research
Service performance
Gap 5
Gap 1
Gap 3
Gap 4
Gap 2
Parasuraman, et al., 1985, 1988
Customer Satisfaction
8
Combining two models?
9
New Model
• Theoretical model
• Operational model
• Weights
10
C ustom erexpec ta tions
S ervice qua lity gap
Cus
tom
erpe
rcep
tions
R equirem ents o fservice qua lity
M arketing info rm ation gap
Cus
tom
er d
eman
ds
C ustom er perceptions
C om m unication gap
Ser
vice
del
iver
y
S ervicespec ifications
S tandards gap
Req
uire
men
ts o
fse
rvic
e qu
ality
S ervice de livery
S ervice perfo rm ance gap
Ser
vice
spec
ifica
tions
11
S ervice de livery
S ervice perfo rm ance gap
Ser
vice
spec
ifica
tions
C ustom er perceptions
C om m unication gap
Ser
vice
del
iver
yC ustom erexpec ta tions
S E R V Q U A L
S ervice qua lity gap
Cus
tom
erpe
rcep
tions
D es igning process
M arketing info rm ation gapand s tandards gap
Cus
tom
er d
eman
ds
12
D es igning process
R ela tion m atrix
Wei
ght
Cus
tom
er d
eman
ds
Questionnaire
InterviewInterviewLiterature
13
Weights of service quality• positive question
– Required elements can
be always found
• reverse question– Required elements can
NOT be always found
Kano, et al, 1984
Don’t fulfill expectations
Customer dissatisfaction
Attractive
Must-be
Performance
Positivequestions
Reverse questions
Happy Must-be Indifference Acceptable Unhappy
Happy Q A A A O
Must-be R I I I M
Indifference R I I I M
Acceptable R I I I M
Unhappy R R R R QMatzler, Hinterhuber, 1998
14
Mobile phones in China
• Background
• Model
• Questionnaire
• Interview
15
BackgroundSource: www.drcnet.com.cn
0
500
1000
1500
2000
2500
2001 2002 2003 2004 2005 2006 2007
mobile calling(billion mins)
message sending(billion items)
China mobile phones
0
100
200
300
400
500
600
1998 2001 2004 2007
Mobile subscribers (million)
16
0
20
40
60
80
100
120
Subscribers per 100 inhabitants, Winter 2007, China
Subscribers (million, April 2008)399. 5
12. 54 4. 31
China Mible (GSM)
China Unicom(GSM)
China Unicom(CDMA)
Source: www.drcnet.com.cn
Background
17
2001 2002 2003 2005 2008Beginning
Operators: China MobileObject: users of GoToneContent: local voice serviceCharacteristics: simple forms
“Price chaos”
Operators: China Mobile and China UnicomObject: overall expansionContent: local voice, toll voice, roaming serviceCharacteristics: various kinds of packages, update quickly, different means for sale
Development
Operators: China Mobile and China UnicomObject: an expansion of users interfaceContent: local voice, toll voice, roaming serviceCharacteristics: intensified competition, bundling sale
“Rational competition”
Operators: China Mobile and China UnicomObject: comprehensive usersContent: voice service. data service, choose availableCharacteristics: rational competition trend
18
Tariff brands in China Mobile
• GoTone businessman and other high earners
• M-zone students
• Easyown remaining sections of society
19
New tariff package development
Tracking
& assessment
users tracking
·the effective assessment
Feedback & adjustment
Market
forecasts
·find market opportunities ·consider the copy strategy
Definition
of
objectives
·make marketingObjectives
·focus on targetConsumers
·analyze consumptioncharacteristic
Design of tariff
package
·design product mix of tariff package ·decide tariff level in advance
Design of marketing
strategy
·select marketing channels and sale mode ·formulate the publicity strategy
Benefit
forecasts
·a pre-assessment on the package ·predict the profit and cost ·determine the tariff level
Audit
for
approval
·be presented to China Mobile (headquarter) to get a approval through auditing
Launch
·salesman training
·market sales
20
C ustom erexpec ta tions
S E R V Q U A L
S ervice qua lity gap
Cus
tom
erpe
rcep
tions
D es igning process
M arketing info rm ation gapand s tandards gap
Cus
tom
er d
eman
ds
S ervice produc t
C om m unication gap
Cus
tom
erpe
rcep
tions
21
Questionnaire• G1 Required elements can be always found• G2 The differentiation between elements is always significant• G3 The elements of package are full enough• G4 The package is simple enough
• G5 I can choose elements of package freely
• G6 The packages with same brand can be chosen together
• G7 The interval between new tariff packages is reasonable
• G8 The package is always improved with the changing of customer demands
• G9 The content of package is novel and personalized
• G10 The tariff package has image symbols
• G11 The package is always with a preferential price
• G12 The package is always with a clear billing
Elements of package
Range of free choice
Personalization of package
Price
22
Profile(125 subscribers, August 2007)
Index percent Index percent
Gender male 50.4
female 49.6
Age ≤ 20 1.6
20–25 47.2
26–30 31.2
31–45 17.6
≥ 46 2.4
Career staff 33.6
student 30.4
manager 15.2
teacher 8.8
other 12.0
Degree < B. A. 16.8
B. A. 47.2
≥ M. A 36.0
Income Monthly (RMB)
≤ 500 9.6
500-1000 24.0
1000-3000 36.0
3000-5000 23.2
≥ 5000 7.2
Package M-zone 55.2
GoTone 22.4
Easyown 22.4
23
Pearson correlations
24
Reliability and Validity customer demands
IDEFA Load
Factor 1 Factor 2 Factor 3 Factor 4
Alpha 0.822 0.848 0.807 0.837
G1 0.317 0.624 0.465 0.037
G2 0.313 0.797 0.272 0.052
G3 0.362 0.667 0.193 0.227
G4 0.035 0.688 0.042 0.603
G5 0.089 0.244 0.845 0.293
G6 0.162 0.271 0.725 0.357
G7 0.601 0.369 0.228 0.325
G8 0.619 0.259 0.350 0.206
G9 0.776 0.146 0.339 0.082
G10 0.838 0.181 0.185 0.075
G11 0.407 0.223 0.348 0.687
G12 0.150 0.077 0.317 0.857
25
The weights of service quality
26
Interview I • “left wall”-- customer demands elements of package;
range of free choice;
personalization of package;
price
•“ceiling” -- design process of tariff package market forecasts;
target orientation;
design tariff package;
planning marketing strategy;
revenue forecasts;
approval;
launching into market;
keeping track and evaluation;
improving according to the feedback
27
R eq u ired e lem en ts c an b e a lw ays fo u n d
T h e d iffe ren tia tio n b e tw een e lem en ts is a lw ayss ig n ific an t
1 8 .2 3 0
D es ig n in g p ro cess o f ta riff p ack ag e
C u s to m er d em an d s
W eig h t
◎
Fin
ding
mar
ket o
ppor
tuni
ties
by
mar
ket r
esea
rch
7 .4 2 0 △T h e e lem en ts o f p ack ag e a re fu ll en o u g h 1 8 .9 1 6 ◎
2 0 .3 5 6 ○T h e p ack ag e is s im p le en o u g h
I c an ch o o se e lem en ts o f p ack ag e free ly 2 8 .4 3 6 △3 8 .3 1 9 △T h e p ack ag es w ith sam e b ran d can b e ch o sen
to g e th e rT h e in te rv a l b e tw een n ew ta riff p ack ag es isrea so n ab le 2 7 .6 8 7 ◎
2 2 .3 2 6 ◎T h e p ack ag e is a lw ays im p ro v ed w ith th ech an g in g o f cu s to m er d em an d sT h e co n ten t o f p ack ag e is n o v e l an dp e rso n a liz ed 1 5 .9 1 8 ○
8 .3 2 2 △T h e ta riff p ack ag e h a s im ag e sym b o ls
T h e p ack ag e is a lw ays w ith a p re fe ren tia l p rice 1 4 .4 1 4 △1 3 .2 2 1 △T h e p ack ag e is a lw ays w ith a c le a r b illin g
◎
Pla
nnin
g an
d st
rate
gy
○◎○△○◎◎○○△△
◎
Loc
king
in th
e ta
rget
mar
ket
△◎△△△◎◎△◎△△
◎
Ana
lysi
ng c
usto
mer
cha
ract
eris
tics
tode
sign
uni
que
sell
ing
poin
ts f
or ta
riff
pack
age
△◎△△△◎◎△◎△△
○
Des
ign
of ta
riff
pac
kage
bas
ed o
nre
sear
ch a
nd d
ata
base
△○△△△△◎△△△△
△
Mar
keti
ng s
trat
egie
s ba
sed
on d
iffe
rent
tari
ff p
acka
ge
○
△△△△△△○
◎
Pil
ot f
or ta
riff
pac
kage
and
eva
luat
e th
ere
sult
◎
△
◎
◎△
For
ecas
t of
reve
nue
on ta
riff
pac
kage
and
pric
ing
◎
△
Sub
mit
ting
to h
eadq
uart
er f
or a
ppro
val
△△△
◎△
△
Tra
inin
g of
sal
espe
rson
s fo
r ne
wse
rvic
e pr
oduc
t
△△
△◎
△
Lau
nch
tari
ff p
acka
ge in
to m
arke
t
△△
△△○○
○△△
◎
Kee
ping
trac
k an
d ev
alua
tion
of
tari
ffpa
ckag
e
△◎○△△◎◎△△○△
◎
Impr
ovin
g th
e ta
riff
pac
kage
acc
ordi
ngto
fee
dbac
k
△◎○△△◎◎△△○△
W eig h ted sco re 4 4 4 4 9 8 4 2 5 4 2 5 3 1 5 2 2 5 2 5 9 4 3 2 1 2 9 9 2 5 6 4 4 3 4 4 3
◎ ◎ ◎ ◎◎◎◎
◎◎
◎◎
◎◎◎◎◎
◎ ◎
○
○○
○
○△△
△○
△ △
△
△△
○◎
○△
◎◎
△△
△
○ ○△
Note : "◎ " m ean s s tro n g co rre la tio n (3 ); "○ " m ean s co rre la tio n (2 ); "△ " m ean s w eak co rre la tio n (1 ).
28
Interview II• “left wall” -- customer perception elements of package
range of free choice
personalization of tariff package
price
•“ceiling”-- tariff package product
price
place
promotion
29
△ ◎
R eq u ired e lem en ts can b e a lw ays fo u n d
T h e d iffe ren tia tio n b e tw een e lem en ts is a lw ayss ig n ifican t
D e liv e ry o f ta riff p ack ag e
C u sto m er d em an d s
W eig h t
Cle
ar m
arke
t ori
enta
tion
T h e e lem en ts o f p ack ag e a re fu ll en o u g h
T h e p ack ag e is s im p le en o u g h
I can ch o o se e lem en ts o f p ack ag e free ly
T h e p ack ag es w ith sam e b ran d can b e ch o sento g e th e rT h e in te rv a l b e tw een n ew ta riff p ack ag es isrea so n ab leT h e p ack ag e is a lw ays im p ro v ed w ith th ech an g in g o f cu s to m er d em an d sT h e co n ten t o f p ack ag e is n o v e l an dp e rso n a liz ed
T h e ta riff p ack ag e h as im ag e sym b o ls
T h e p ack ag e is a lw ays w ith a p re fe ren tia l p rice
T h e p ack ag e is a lw ays w ith a c lea r b illin g
Com
bini
ng a
pac
kage
wit
h ot
her
spec
ial e
lem
ents
, i.e
. ser
vice
s.
Tim
es o
f vo
ice
serv
ice
sati
sfy
cust
omer
dem
and
Flo
w r
ate
of d
ata
serv
ice
sati
sfy
cust
omer
dem
and
Lat
est d
ata
serv
ice
can
be in
clud
ed
Bun
dlin
g of
voi
ce s
ervi
ce a
nd d
ata
serv
ice
is r
easo
nabl
e
Tar
iff
pack
age
is r
elat
ed w
ith
spec
ial b
rand
,di
ffer
enti
atio
n be
twee
n pa
ckag
es is
sig
nifi
cant
Eva
luat
ion
and
impr
ovem
ent o
f th
ela
unch
ed ta
riff
pac
kage
Sim
plif
ing
tari
ff p
acka
ge a
nd r
educ
ing
type
s of
pac
kage
s
Pri
ce m
atch
es w
ith
its
valu
e
Pri
ce d
iffe
rent
ly f
or d
iffe
rent
bra
nd
Pro
vide
pre
fere
ntia
l pri
ce f
or id
le ti
me
◎
Pro
vide
pre
fere
ntia
l pri
ce a
ccor
ding
toye
ars
of u
sing
ser
vice
◎
W eig h ted sco re 4 3 4 3
◎
◎△
◎
△
◎
○◎
△
1 5 7 2 6 1
◎ ◎
4 3 4 3
◎
△
△△◎
△◎○
◎
1 7 1 1 4 8
△
△
◎
◎○
○△◎△
◎
△
9 1 2 8 7
○○◎△△
△◎
△△◎△
△
△
◎
2 3 5 2 0 3
△◎○7 8
Pro
vide
pre
fere
ntia
l pri
ce a
ccor
ding
toam
ount
of
cons
umpt
ion
Pro
vide
dif
fere
nt p
refe
rent
ial p
rice
todi
ffer
ent g
roup
s of
cus
tom
ers
Pri
ce d
iffe
rent
ly in
dif
fere
nt s
tage
s of
life
cyc
le o
f ta
riff
pac
kage
Mak
e di
ffer
enti
ate
pric
ing
reas
onab
le
Pro
paga
ndiz
e ne
w s
ervi
ce r
easo
nabl
y
Set
up
spec
ial a
rea
for
real
exp
erie
nce
of n
ew s
ervi
ce
Tra
in s
peci
al c
onsu
mer
s fo
r sp
ecia
lse
rvic
e
Pro
vide
con
sult
ing
serv
ice
to s
peci
alco
nsum
ers
for
spec
ial s
ervi
ce
Ana
lyse
tari
ff p
acka
ge r
egul
arly
, and
impr
ove
its
mar
keti
ng
Hol
d sa
les
prom
otio
n re
gula
rly
Hol
d pr
omot
ions
bas
ed o
n re
liab
lefo
reca
sts
and
anal
ysis
◎
Ana
lyse
tari
ff p
acka
ge r
egul
arly
, and
impr
ove
prom
otio
n ac
tivi
ties
◎
4 3 4 3
◎
4 3
◎ ◎
4 3 4 3
○
◎◎
○1 0 9 2 6
○○○△
○△○○ ◎2 0 5 4 0
○4 0 2 6
○◎
6 0
1 8 .2 3 0
7 .4 2 0
1 8 .9 1 6
2 0 .3 5 6
2 8 .4 3 6
3 8 .3 1 9
2 7 .6 8 7
2 2 .3 2 6
1 5 .9 1 8
8 .3 2 2
1 4 .4 1 4
1 3 .2 2 1
Note : "◎ " m ean s s tro n g co rre la tio n (3 ); "○ " m ean s co rre la tio n (2 ); "△ " m ean s w eak co rre la tio n (1 ).
30
What this means ?
• New service development vs. service innovation
• Engineering vs. marketing
• Thought vs. methodology
• Theory vs. practice
Acknowledgements
Natural Science Fund of China (Grant No. 70402016)
Natural Science Fund of Zhejiang Province (Grant No. Y605404)
Two co-authors’ contribution: Ms. Lei Xu, Ms. Xiu-lan Wu
Two anonymous reviewers of International Journal of Services Tec
hnology and Management
Mr. Jonathan Alyen’s kindly help on presentation and slide design
32
References in slides• James A. Fitzsimmons, Mona J.Fitzsimmons, Service Management: Operation, Strategy, and
Information Technology, Third Edition, McGraw-Hill Companies, Inc. 2001, p58
• A. Parasuraman, L.L. Berry, V.A. Zeithaml, A conceptual model of service quality and its impli
cations for future research, Journal of Marketing, Vol. 49, pp.41–50, 1985.
• A. Parasuraman, L.L. Berry, V.A. Zeithaml, SERVQUAL: A multi-item scale for measuring con
sumer perceptions of service quality, Journal of Retailing, Vol. 64, No. 1, pp.12–40, 1988.
• N. Kano, et al. Attractive quality and must-be quality, Hinshitsu (Quality, the Journal of Japane
se Society for Quality Control), Vol. 14, pp.39–48, 1984.
• K. C. Tan, T. A. Pawitra, Integrating SERVQUAL and Kano's model into QFD for service excell
ence development, Managing Service Quality, vol. 11, no. 6, pp. 418-430, 2001.
• K. Matzler, H. H. Hinterhuber, How to make product development projects more successful by
integrating Kano’s model of customer satisfaction into quality function deployment?
Technovation, Vol. 18, No. 1, pp. 25-38, 1998.
33
Academic VisitorManchester Institute of Innovation Research Manchester Business SchoolThe University of Manchester
5.10 Harold Hankins BuildingTel: +44 161 275 0928(O) Mobile (UK): +44 779 982 1004Mobile (China): +86 139 581 600 47
Email: [email protected]: [email protected]
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