Report on Service Design and Management for MedBed Hotels

This report provides a comprehensive analysis of service design and management, focusing on the case study of MedBed Hotels. It delves into the service concept, strategies for managing service quality and customer satisfaction, including reliability, responsiveness, assurance, tangibles, and empathy. The report also examines strategies for managing service encounters, highlighting potential customer behaviors like friendliness, commitment, and effective communication, along with methods for managing service processes and environments. Furthermore, it explores strategies for managing service failures and recovery, emphasizing the importance of anticipating guest needs, acknowledging feelings, and providing alternatives. The report concludes by analyzing strategies for managing both external and internal customer relationships, offering valuable insights into creating a customer-centric service environment. The report utilizes the provided customer service handbook of MedBed Hotels, attached in the appendix section of the report.

Running Head: SERVICE MANAGEMENT 1
Service Design and Management

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Table of Contents
Executive Summary.........................................................................................................................5
1. Introduction to Report..............................................................................................................6
2. Analyses and Justification...........................................................................................................6
2.1. The service concept...............................................................................................................6
2.2. Strategies for managing service quality and satisfaction......................................................7
Reliability.................................................................................................................................8
Responsiveness.........................................................................................................................8
Assurance.................................................................................................................................8
Tangibles..................................................................................................................................8
Empathy....................................................................................................................................9
2.3. Strategies for managing service encounters.............................................................................9
Potential Customer Behaviors......................................................................................................9
Friendliness and Courteous......................................................................................................9
Commitment...........................................................................................................................10
Effective Communication.......................................................................................................10
Customer-Centric...................................................................................................................10
Three Strategies to manage service behaviors...........................................................................10
Discipline................................................................................................................................10
Positive Reinforcement..........................................................................................................11
Development of other methods..............................................................................................11
2.4. Managing service processes and environments......................................................................11
2.5. Managing service failure and recovery...................................................................................12
Service System Failure...............................................................................................................12
Failure in Explicit and Implicit Customer Requests..................................................................12
Unsolicited and Unprompted employee actions........................................................................12
Anticipating the needs of guests................................................................................................13
Acknowledging their feelings....................................................................................................13
Owning and apologizing the responsibility...............................................................................13
Providing them alternatives.......................................................................................................13
Creating amends.........................................................................................................................14

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2.6. Managing external and internal customer relationships.........................................................14
Strategy to Manage Internal Relationships................................................................................14
Strategy to Manage External Relationships...............................................................................14
Conclusions and Recommendations..............................................................................................15
References......................................................................................................................................16
Appendix:......................................................................................................................................20
Part A: Construction of Customer Service Handbook...................................................................20

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Part B: Analysis Report on Customer Service Handbook
Executive Summary
For a service organization, effective service design and service management is an important
aspect to compete with its competitors. Service design is the process of planning and organizing
different parts of organization, like; infrastructure, human resources, interaction and important
elements of services for enhancing the quality of service and communication between provider
of service and potential customers. This process is very important for hospitality organizations,
like; hotels and hospitals. This report includes the service design and management for case study
organization, i.e. MedBed Hotels. This includes and analyzes all the parts of customer service
handbook of this organization that is attached in the appendix section of this report. It includes
different strategies for managing and measuring the quality of services. There are some service
behaviors, which are required to fulfill the needs and expectations of customers. Furthermore, it
includes the service processes and environment of the organization. At the end, this report
examines the effective strategies for managing external and internal relationships with the
customers.

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1. Introduction to Report
In any service industry organization, it is very important to manage the service quality and
service delivery effectively. It is a significant aspect in today’s competitive business landscape.
The quality of service totally depends on how the customers experience the services, offered by
service provider. This report includes the service management process with its different aspects.
It justifies and analyzes all the information, which is given in the customer service handbook of
MedBed Hotels, that is going to start its business in December, 2017. It includes the service
concept of MedBed Hotels. It justifies all the strategies, which are used by the organization in
managing the service encounter and employee service behaviors. Furthermore, it includes the
methods for managing the processes and environments in the service organization. The
organization is creating a customer service handbook for its Guest Experience team and well-
being team, so that employees can understand the concept of service delivery and service
management. At the end, it consists of potential services failures and recovery plan to overcome
the issues. The report will help in understanding the theoretical concepts behind the aspects of
customer service handbook of MedBed Hotels.
2. Analyses and Justification
2.1. The service concept
For a service organization, it is essential to create a service concept, which meets the needs and
expectations of potential customers. Creating a service concept is the first part of developing a
service model for a service organization, like; a hotel. For setting a service concept, the
organization first focuses on product element, i.e. hospitality for guests. A service concept
should be new and innovative, so it can attract the maximum customer base in this competitive
business environment. It includes all the tangible and intangible components of services, which
creates value for the customers (Akaka & Vargo, 2015). A service concept consists of both core
and customer services as well. Core services are the services, which an organization offers to the
customers, i.e. reasons for being of hotel, i.e. hospitality services in case of MedBed Hotels.
Moreover, customer service includes all the interactions, which the team has with the customers
and guests in conducting the business.

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In the given scenario, the service concept of MedBed includes both the core and supplementary
services. With its new and innovative concept, MedBed Hotels is offering five-star hotel services
and nursing services to the patients, who are taking short-stay accommodation at hotel rooms. It
is providing very comfortable, creative and customer-centric environment, where the guest can
have ongoing care, without depending on the hospital. For Guest Experience and Well-Being
team, it is important to understand the service concept at hotels. It is very important for offering
the services effectively. In order to understand the service concept, there are so many things,
which the employees need to know for providing a successful service encounter. First, the
employees need to understand the core and supplementary services of the hotel. After knowing
about the services, the employees need to understand the type of customers at their service
organization (Alghamdi, 2016). There may be two types of customers, i.e. internal customers and
external customers. External customers are the people, who are served by the employees within
the organization by its core services, whereas external customers come to the organization for
some products and services. In the given scenario, the internal customers are the guests and
visitors, who are coming at MedBed for hospitality services and external customers, are the
patients, who are admitting here after taking discharged from Royal Sydney Private Hospital
(Amin & Zahora Nasharuddin, 2013).
The organization makes several efforts to give make the employees understand about its service
concept. The organization can conduct the training and development process for the outside and
fresher employees. At luxury hotels, through training, the staff will be able to learn about the
service concept and standards. These training methods should be created, which offer the staff
with the great opportunity to learn and understand. It can assist the employees in understand the
service concept effectively (Bisk, 2017).
2.2. Strategies for managing service quality and satisfaction
Quality of service is the heart of a service organization, especially, for a hotel organization.
Service quality is the core of service management in hospitality industry (Vijayadurai, 2008).
This quality is concerned with the customer satisfaction and customer satisfaction is related with
the revisit intention of customers. If a positive image of service is created to the guests and
customers, it will assist the organization in creating competitive advantage for hospitality

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organization (Bitner, & Wang, 2014). There are some dimensions, which the customers use to
evaluate the quality of services.
SERVQUAL Model is a significant theory of service management that can be implemented for
evaluating the service quality at hotels (Tsai, 2014). Generally, the customers focus on these five
dimensions for analyzing the quality of hospitality services, which are given stated below;
Reliability
Reliability dimension of service quality refers to how an organization is performing and fulfilling
the committed and promised service. It includes the accuracy and quality within set quality
standards and requirements between customers and organization (Bowen, 2016). It is an
important aspect as the first impression as the customers want to know whether their services are
reliable and fulfill all the standards and requirements with complete satisfaction MedBed Hotels
can focus on offering services in promised way and time, as the guests may use this aspect to
evaluate the service quality at MedBed (You, 2014).
Responsiveness
Responsiveness of service quality includes the desire and willingness of an organization to assist
the customers in offering them with the fast, better and quality service (Chaston, 2014). At
MedBed, Guest Experience and Well-Being Team should understand that they have to offer the
services in a way so that guests and patients may feel valued in their stay at hotel.
Assurance
The assurance is also an important dimension of service quality. It refers to the employees of the
organization. It includes different aspects, like; whether the employees are enough skilled and or
they are able to gain the confidence and trust of customers. At MedBed, the employees should
try to deliver the services effectively, so that they can gain the trust and confidence of guests
(Chang, Chen & Lan, 2013). If the guests and patients will not be comfortable with the staff and
their services, then it will affect their revisiting intention towards MedBed.
Tangibles
Tangibility service quality dimension includes the appearance of physical facilities and
surroundings, equipment and other personnel and their way of effective communication. It also
creates a first impression on the customers (Dhar, 2015). MedBed is already focusing on this

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aspect of service quality. The rooms at hotel are luxurious and spacious, which may attract the
people to visit the hotels again and again. The rooms in hospital will give a natural and elegant
feeling to the patients. Other tangibles are; like; cold ambience at hospital, fresh and health
centric food for patients (Wirtz & Lovelock, 2016).
Empathy
Empathy dimension of service quality refers to the care and individual attention, which is given
to the customers. Through this dimension, the customers evaluate how a service organization
care the customers and gives them personal attention (Dabholkar, 2015). It is very essential to
make them feel more special and valued. If the guests feel more valued, it increases the revisiting
intention of guests to hotel. At MedBed, the employees should understand that there guests are
patients, who need extra care and attention, so they should make efforts to pay attention on each
and every patient.
2.3. Strategies for managing service encounters
Human resources and their behavior play an important role for managing the service encounter in
any service organization. In a service organization, it is very important to examine the attitudes
and behaviors of the employees, who offer the front stage and back stage services to the
customers (Fitzsimmons, Fitzsimmons & Bordoloi, 2006). In the hospitality industry, it is
important to have some specific behaviors to serve the customers. according to a theory of
customer service management, there are some specific employee behaviors, like; being cheerful
and polite to customers and making the customers feel more valued and special.
Potential Customer Behaviors
There are some potential service behaviors, which can be possessed by the Guest Experience and
Well-Being team at MedBed.
Friendliness and Courteous
When it is about to serve the customers directly, the employees need to be more friendly and
courteous with the customers (Gunarathne, 2014). The employees, who perform their duties
effectively to become friendly and courteous to their managers, colleagues and customers, assist
in developing a good working environment in the organization. This type of behavior is very

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essential for the employees in hospitality industry. The Well-being and Guest Experience team at
MedBed should enhance this behavior in serving the guests and patients at their hotel.
Commitment
To get success in the hospitality industry, the Guest-Experience and Well-Being team need to be
committed to ensure the satisfaction of customers (Gummesson, 2014). The staff should do
everything to satisfy the need and expectations of customers. At MedBed, the employees and
nurses need to perform the tasks and activities to make the patients happy and enhance their
revisiting intention.
Effective Communication
In delivering the services effectively, the employees should have effective communication and
interaction with the customers. In hospitality business, excellent communication skills are
required to fulfill the expectations and demands of customers, so that they can communicate with
customers in oral and writing (Ho Voon, Abdullah, Lee & Kueh, 2014).
Customer-Centric
In order to satisfy the customers, it is very necessary to become customer-focused, so that
employees can understand the needs and expectations of their potential customers. The
employees should reflect the service behavior that focuses on the needs of customers. For
example, at MedBed, the staff will focus on the needs of each and every patient (Hollensen,
2015). If the employees do so, then guests may feel more valued and special.
Three Strategies to manage service behaviors
There are some strategies, which can be used by a service organization to manage the employee
service behaviors and service encounters in this competitive business environment (Iden and
Eikebrokk, 2013). These strategies can be used to influence the behavior of staff and team in the
organization. These strategies are analyzed and justified below;
Discipline
Discipline is a major component that can be used for enhancing the service behavior of
employees. In an organization, taking disciplinary actions can discourage the unethical and
unwanted behavior of employees. For example, if the employee is regularly late at office, then
the organization should take some disciplinary action to avoid being late again. At MedBed, the

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top management can also use this strategy to improve the service behavior of employees. They
should be disciplined with their guests also.
Positive Reinforcement
Positive-reinforcement is a popular strategy or approach that works under a theory that giving
reward to the workers for showing desired attitudes will inspire the employees to regularly doing
that. In turn, it will enhance the long term growth and success of the organization. These rewards
may be in the form of bonuses and appreciation for their tasks and responsibilities (Jaakkola,
Helkkula & Aarikka-Stenroos, 2015). At MedBed, the top management should adopt this
strategy to motivate the hotel staff to perform the services in an effective manner. Rewarding the
employees will be beneficial for providing quality services to the guests in the hotel (Trusson,
Doherty & Hislop, 2014).
Development of other methods
There are some other active methods, which can be developed by the service industry
organizations. These methods can work as an effective strategy to monitor the customer
satisfaction. It can assist the employees in dealing with the unexpected conditions in the guest
experience and in driving the loyalty among customers. MedBed hotel is also including some
methods in its customer service handbook, which will be implemented to enhance the service
behavior and service encounter (José Tarí, Heras-Saizarbitoria & Pereira, 2013).
2.4. Managing service processes and environments
Blueprint of service is a technique that is generally used for designing the innovation and service.
A service organization can show its service process by using a blue print diagram that reflects the
service delivery process from the perspective of customers (Kim, Vogt & Knutson, 2015). Each
and every organization uses a blue print and service scape diagram for the service organization.
The customer service handbook includes the blueprint and service scape diagram for the
MedBed organization.
The service organization should implement effective strategies to measure the service quality and
customer satisfaction. For measuring the customer satisfaction and service quality, the
companies can use different strategies, like; benchmarking, customer complaint policy, customer

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research etc. MedBed can adopt customer’s complaint policy to analyze the service quality
(Kindström & Kowalkowski, 2014).
2.5. Managing service failure and recovery
In a service organization, failures are very common in order to deal with the customers. Even
with the best service industry organizations, these types of failures can occur. These failures can
occur, when the services are not provided in the way as they promised or committed. The
outcome of these situations may be incorrect or it may influence the revisiting intention of
customers and customer base of the service organization. In the hospitality industry, these
service failures may bring negative experiences to the guests. There may be different types of
services failures, which a hotel organization may face in offering the services to guests. The
hotels develop a service recovery process to eliminate the situation of service failure
(Khodakarami & Chan, 2014). The customers, who have negative experiences, but finally they
are satisfied with the service recovery efforts, they become more loyal to the organization.
According to Bitner, there may be three types of service failures, which a service organization
may confront, i.e.
Service System Failure
In a hospitality organization, the service failure may be related to the failure in the service
system. This type of failure is connected to the core services of the organization, like; hotel and
nursing services to guests and patients. Deficiency in services causes the failure in service
systems and processes (Lusch & Vargo, 2014). The examples of these failures are like; issue of
room cleanliness, employee’s unfriendliness with the guests, out of stock conditions, slow
services etc. The management at MedBed may face this kind of service failure.
Failure in Explicit and Implicit Customer Requests
This type of service failure happens when the hotel staff is not able to fulfill the services
according to needs and expectations of guests, for instance; lost reservations, dirty rooms, wrong
delivery of foods and services (Malthouse, et al, 2013).
Unsolicited and Unprompted employee actions
There may be the service failure, which is caused by the unsolicited and unprompted actions of
employees. It includes the service behaviors of employees, which is not acceptable by the guests

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and organization. These behaviors may be like; wrong and poor attitude, rudeness, incorrect
billing of services, additional charges etc. In order to provide nursing and hospitality services,
MedBed may face this type of service failure in the workplace environment (Lovelock &
Patterson, 2015s).
From all the service failures, first failure is very important because the customers confronting
this type of service failure can switch to other competitors. So, the managers should focus on
creating recovery processes and strategies to avoid the service failure;
Anticipating the needs of guests
The meaning of anticipating the needs refers to understanding the needs and demands of
customers. In the first step, the organization needs to understand, what their potential customers
want and expect from them (Mok, Sparks & Kadampully, 2013). By following this step, the
manager and employees will have the clear idea about the needs of guests at hotels. It is the key
point for successful service encounter. In the first step, MedBed will focus on anticipating the
needs of potential guests and patients (Wong, 2014).
Acknowledging their feelings
There is a need of service recovery when the customers did not receive expected and needed
services from organization. It is significant that staff at hotel acknowledges the issues and
feelings of guests (Mattsson & Söderlund, 2017). They should understand what they actually
want. They need to understand the problems behind this failure.
Owning and apologizing the responsibility
After acknowledging the feelings of customers, the team should accept their mistakes and
responsibilities behind the service failure (Osborne, Radnor & Nasi, 2013). Apologizing to the
team can decrease the anger among guests. At MedBed, Guest Experience Team and Well-Being
should apologize to the patients and guests, so that they can recover the deficiency in the services
(Tynan, McKechnie & Hartley, 2014).
Providing them alternatives
In the deficit of any particular thing, the organization can provide alternatives to their guests.
Providing other alternatives is an effective method to recover the service failure. It can help to
satisfy the dis-satisfied customers. At MedBed, the management should use these methods. They