Nowadays, service businesses are heavily reflected by manufacture industries. Consumers are not only interested in the product itself but also in its function and value. When designing a new service business, there can be a number of uncertain factors, so it is difficult to design a business model structure and analyse its effectiveness. Some businesses tend to fail their new service business because they ignore the influence of these risk factors. Therefore, for us to start our new service business of a restaurant, we should first start by putting forward a service design method. This is done through service design thinking. Service design means taking a particular service, in our case a restaurant, and making it meet the customers’ needs for the service. Service design thinking can be used both to improve an existing service and also to create a new service. Firstly of all, while adapting service design, it is important to understand the basic principles of service design thinking and focus only on these. This thinking helps to design and market the service in order to improve the customer experience and the relationship between the ones providing the service – restaurant owner and waiters – and the customers. Today, people have a wide choice of restaurants to choose from so this process is essential for us as we need to make people choose our restaurant. Service design is what will make our restaurant better than others.The services offered by a restaurant are economic activities that create value and provide benefits for the customers. In exchange for our customers’ money and time, we should provide them with great value to match, or even exceed, their expectations. So we should try offering them services which are as efficient and effective as possible.The challenges related to market a service-based business are entirely different from the challenges related to market a product-based business. A service business, such as a restaurant, has particular characteristics that should be analyzed and understood when developing a marketing plan and a competitive strategy. The 5 characteristics of a restaurant are; intangibility, inseparability, variability, perishability, and ownership of services.The first characteristic that normally comes to mind when we think of a service is intangibility. A service cannot be seen, tasted, felt or smelt before being purchased. Potential customers will not be able to perceive the service before actually coming into the restaurant and get served as it is difficult for them to say what they will be getting in advance. Customers tend to rely more on reputation and facilities of the restaurant to indicate the intangible service’s quality. We should be able to determine the feelings that we want our customers to experience. For example, we can provide a bottle of water to the customers upon arrival and a waiter should keep close too quickly refill water glasses as well as wine glasses without being asked. We should make sure to prepare and serve orders quickly. Intangible service will be defined by the overall customer experience so we should also ensure that all food is of good quality, the waiters are friendly, restrooms should be cleaned daily and we should be responsive to the customers’ complaints. The service that we will be providing will be produced and consumed at the same time and so it cannot be separated from its providers. The waiters and the customers will be part of the service and they both influence the service being offered. This means that customers will also be responsible for the service that they receive. All customers will be present while a particular customer is being served and the behaviour of the other customers can determine the satisfaction of the service delivered to that particular customer. For this reason, we should make sure that the customers involved in the service will not intervene with each other’s satisfaction. This characteristic might be challenging if the customers are not sure of what they want, so our stuff should be fully trained to help them do so. The staff will be part of the process as well as the quality of the food provided. Inseparability can lead to brand loyalty for the service provider. One other major characteristic of service is variability because it is very difficult for us to give customers identical service experience. This is because services will be produced by different people and so the service quality may vary depending on who will provide it as well as when and how they will be provided. One customer may receive exceptional service on a particular day but not that good on another day from the same person. Sometimes even the same employee can have different performances on the same day. Therefore, our employees should be trained to develop the necessary skills to do their job right, especially the waiters who come in direct contact with the customers. Another characteristic of a service offered by a restaurant is perishability. This type of service cannot be stored for later use as it perishes after a period of time. Service perishability is not a problem when the demand is stable, it becomes a problem when demand starts to go down. If let us say, our restaurant will hold a total of 30 customers at a time but only 25 are currently using our service, those remaining 5 chairs cannot be stored for later. Therefore, the revenue lost from these 5 chairs during that definite period of time is gone forever. Perishability is a bigger problem when it comes to food. If we do not manage to serve all or most of the food on a particular day, we cannot serve that food on another day. If we do this we would probably go out of business. Instead, we will have to serve fresh food, and this is due to the perishable character of service.When customers come into the restaurant to eat, they only have access to the food and the restaurant’s facilities but not ownership of the restaurant. This is the difference between a service industry and a product industry. In services, the product is first bought and then it is produced and consumed hence, the ownership of the service is not transferred. It could be that the customer did not like the service nonetheless, he would have already paid for using the service product. Therefore, we should be careful while designing our marketing mix so that our customers will not be disappointed after the service sale.The restaurant’s environment is the first aspect of the service that our customers will observe as soon as they enter the restaurant. It is at this moment, that our customers will form impressions of the level of service that they will receive.Servicescape is a model, developed by Booms and Bitter, used to emphasise the impact of the physical environment where a service process takes place. The purpose of the servicescape model is to analyse peoples’ behaviour within the service environment with the perspective to design an environment that helps carry out both internal organisational goals and external marketing goals with regard to attaining the required behavioural responses. In simpler words, the servicescapes model shows how physical surroundings can influence the behaviours of customers as well as that of employees. For this reason, we should be very careful while designing our restaurant’s physical environment. In order to be successful, our restaurant operators need to create a satisfying servicescape and provide an outstanding service to our customers. In designing the service setting, we need to keep in mind some key aspects including the duration of the service setting. Customers will spend a significant amount of time in the restaurant so we should provide them with a quick but excellent service so they leave more quickly and the table will be available for the next customer. The service setting should be an operational tool in which efficiency lowers operating costs. This can be done by training our employees to work quicker and more effectively in order to reduce our operating costs. Reducing the amount of time spent on a particular task leaves you available for more important responsibilities, like customer service and employee relations. Also, letting customers pay however they want can speed up the checkout process. If we enable this in our restaurant, we will be able to make checkout much faster resulting in better efficiency.Customers and employees perceive the environment holistically, as a composite of three main dimensions; the ambient conditions, the spatial layout and functionality and the signs, signals and artefacts. Each of these dimensions may affect the overall perception independently. The ambient conditions, pertaining to our five senses, refer to the controllable stimuli such as air temperature, lighting and noise. The servicescape is composed of other elements including colour, music, scent, layout and design in the physical environment. The temperature in our restaurant should be just right, not too high and not too low. Music in a restaurant can have a powerful effect on customers’ behaviour and tends to reduce the negative effects of waiting since it serves as a distraction. Since our restaurant will be located in a quiet area, over-looking Malta and Comino, we should play romantic music at a low level. The lighting of our restaurant should not be so bright in order to create an intimate leisurely atmosphere. On the contrary, if our restaurant will open for breakfast, it should have lots of light so that customers can read the morning newspaper while enjoying their breakfast.A visual representation is not enough to convince people that our food is great. This is the reason why a picture of food is not enough to create a craving for it. In fact, even though the food has been served well and tastes great, our customers won’t be tempted to eat if there is a bad smell in the restaurant. Therefore, we should also take into account the sense of smell. We should keep bad odours such that of restroom and smoking areas neutralised by hiring someone to clean continuously. Another aspect which will have a huge impact on our customers is the colour that we choose to decorate our establishment. Some colours will help make our customers happy, boost their appetite and make our dining space seem more spacious while other colours can have a negative effect on our customers. So the best colours to choose should be a dark colour scheme to create an intimate and romantic setting but at the same time, not too many dark shades as it can make it feel claustrophobic. Layout is another concept to consider in a restaurant. Layout affects how easy or difficult it is to move around a system and has two important aspects which are spacial layout and functionality. Spacial layout is how objects are arranged and the sizes of these objects while the latter is the way that the equipment and its layout meet the customer’s goals. First of all, we should not put tables very close to each other in order to fit in more tables, because some people may find this unpleasant. In order to improve further the restaurant’s layout, we should install comfortable chairs. Also, the restrooms should be near the exit and not in the dead corner so that customers do not feel annoyed in the process of finding the restrooms. All restaurants should have a number of distinctive signs and symbols that are independent of the eating and drinking activities. Physical environment elements serve as a functional role and are also used to communicate meaning in a refined way through symbolism. Customers want big and clear signs which are easy for them to understand so that they find their way easily. Unclear signals from a servicescape can result in anxiety and uncertainty about how to proceed and obtain the desired service. Thus, we should focus on this factor and equip the restaurant with clear direction such are a toilet sign, men and women’s restroom and a fire exit sign to assist our customers.Effective services marketing is a complex process that involves many different strategies, skills, and tasks. One of the greatest challenges of service firms is to provide continuous quality services to the customers. Service business operators should often assess the service quality provided to the customers in order to improve their service, to quickly identify problems and to reach better client satisfaction. Service quality is an estimation of how well a delivered service reaches the client’s expectations. One can measure service quality on five dimensions, reliability, assurance, tangibles, empathy, and responsiveness. Service marketers have been slightly confused about how to approach quality service in an organised manner. One approach is that of viewing the services marketing in a structured and integrated way through the ‘GAPS model of service quality’. This model positions the key strategies and decisions in service marketing in a correct perspective. We can identify five major gaps that a business like ours will seek to meet customer’s expectations of the customer experience.The most important is the Customer Gap which is the difference between the customer’s expectation of the service and the customer’s perception of the experience. This means that customers can be dissatisfied because the service they received is different from what they expected. The expectations of the customers have been shaped by word of mouth, their personal needs and also their past experiences. The Customer Gap can lead to loss of customers, bad reputation for our restaurant, negatively confirmed quality and also a negative local image. So we need to turn this negativity into positive results while bridging the gap by making perceived quality greater than the expected quality. To do this, we can ask each and every table if everything was alright after delivering customer experience so that we can measure the customers’ perceptions of our service and understand better what our customers expect.Gap 1, also referred to as the Listening Gap, is the distance between what customers expect and the management perceptions. For us to be able to exceed customer expectations, we need to have a correct and clear perception of our customers’ expectations. This gap can be created by not having suitable knowledge resulting from our customers not being completely satisfied. Therefore, we should do sufficient customer research and also interact directly with them and be willing to ask about their expectations in order to know what our customers expect. Service Design and Standards Gap is the difference between management perception and the development of customer-driven service designs and standards. Although management identifies the customer’s expectations accurately, there can still be a chance of customer dissatisfaction. This can be caused by the gap in planning quality of the service according to customer expectations. Other key factors leading to Gap 2 are poor service design, absence of customer-driven standards and also inappropriate physical evidence and servicescape. Therefore, we need to ensure that our restaurant is specifying the level of service that we believe is needed.Provider Gap 3 is caused by not being able to deliver service designs and standards. This is another possible area of customer dissatisfaction due to failure of efficiently specified quality. The Service Performance Gap may arise from having incompetent workforce or adequate working conditions. To prevent this from happening, our managers need to analyse the customer experience that our restaurant currently delivers to make sure it lives up to the spec. Once service designs and standards are in place, it would be easier for us to deliver high quality service. But to be able to deliver excellent service, the restaurant must have systems, processes and people in place to ensure that service delivery indeed matches the designs and standards in place. Provider Gap 4 or Communication Gap, represents the gap between the delivery of service and external communications to customers. In some cases, service company employees have appropriate skills and eagerness to offer efficiently specified quality service but still, the customer may be left unsatisfied due to certain external factors. Sometimes, service firms promise a little too much through its media advertising, sales force and other communications and may potentially raise customer expectations. The discrepancy between actual and promised service has the opposite effect on the customer gap. Therefore, we should keep in mind not to be over-promising in our advertisements and set prices appropriately.