New Service Development

In this lecture we have clear the concepts of sources of service growth and also demonstrate the
basic characteristics of the innovative services. However, to design the delivery system of
services with the basic concepts of services and strategies gives the services with different
feature that make the system more compatible. However, it also involves such as it includes the
different problems such as the problem related to location, procedures, the measurement for
ensuring the qualities, nature of customer involvement and the specific service capacities. It has
been observed that when the design processes ends then the services also becomes more
operational and modifications of the delivery systems updated accordingly.
What is service design?
The service sector for the growth includes the information technology that contains the devices
information’s that removes the needs for the physical service delivery as by using the technology
it would be cost effective to use internet for connecting with customers.
Innovation: by the push theory the innovation is used for the development of products as well as
the demographics changings also eliminates the demands and creates the now one.
There are two types of service innovations
Radical innovations: to bring new services by using the information and technology based on
computer.
Incremental innovations: includes the service line extensions that augmented the existing
service lines. Also provide the facilities to change and update the services.

New service development cycle”

The development cycle of service design consists of several steps such as structural, managerial
steps,
Strategic positioning though process structures consists of several steps such as
Degree of complexity: that used to measure the different steps for the processes of services
Degree of divergence: is consisting of amount of discretion that allows the server to customize
the several services.
Focused and unfocused service operations:
Focused service operations: Is concentrating on to provide the specific services to the client with
a specific range of different services.
Unfocused service operations: is focusing on either the growth strategy or the positioning of
strategy for many organization services.
Discussion questions:
What are the limits in the production-line approach to service?
The service and the production business are customer focused and works to meet the demands of
the customer. Yet the process of the service and the production cannot have a similar approach as
the service business has to deal with the customers directly where as in the manufacturing the
customers are dealt with the product alone and not the process.
There has been a continuous change in the approach of the retailers towards the customers and
the process they carry out. In the production line approach, there are so many advantages as
saving time, making the process simpler, requires lower skilled labors and making the process
more cost effective. In the service business more that the cost effectiveness, it is the satisfaction
of the customers that decides the reputation of the firm. Hence the factors that are considered to
be a vital attribute for the success of the business can also become the limitation to the service
aspect.
The production line approach has its merits to make the process more effective and cost efficient.
But the same attributes can also act as a limit in achieving the vision of the service business.
1. Standardization of services: By making the services rendered as a standard procedure as in the
production line, the quality and uniqueness in the service can be obtained. But there would be no
room for customization of services and customer participation in the service. This would make
the service less customer friendly and satisfaction level of the customers would be low.
2. Division of labor: This approach, the task is divided in to small operations and lesser skilled
people are employed for each. This would make the process cost effective and faster. But in case
of services, the labors will not be able to perform better if the system does not work properly or
if the customer asks for any additional services. As low skilled labors would be preferred and the
job assigned would be a routine one, there would be no gain in knowledge and the lesser skilled
employee would remain so as far as he continues in the job.

Give an example of a service in which isolation of the technical core would be

inappropriate

Service business is highly customer oriented and the goal of the dealer would be to attract more
customers by increasing the number of attributes. The ambience and the infrastructure will be
modified to suit the requirement of the customer. But it has to be understood that the quality if
the service should be of prime importance than the additional attributes.

The production as well as the service operations has its own core technical side that has to be
performed with accuracy so as the business to sustain. It is found that in the service business, as
the satisfaction of the customers is given the top priority, measures are made to make the service
operations more customer friendly. The ambience of the store and the other additional attributes
are modified and made pleasing so as to make the customers more comfortable and satisfied. In
these cases the core technical activity too will have to be taken care of. An example of such a
case can be discussed as follows.
Considering an automobile service unit that is quiet spacious and in the main area where a lot of
customers would notice. The ambience of the store is too good provided with a snacks and coffee
bar, a waiting launch, neat wash rooms and latest magazines to read. Seems to satisfy the
customers with the great ambience. But the store does not get enough customers to keep the
business running. When analyzed, it is found that the core technical activity of repair and
servicing is not given attention. The management took too much effort for improving the
appearance of the store that they isolated the important technical core.
• The latest advancement in the servicing.
• The latest lubricants that gave good motor life.
• Empowering the employees all were isolated.
This resulted in lower performance of the dealer and the customers were not satisfied with the
less skilled employees.

What are some drawbacks of customer participation in the service delivery process?

Customer participation, to some extent, is essential for the company to improve its services.
However, an excess of anything is wrong. The excess of excessive participation of the customers
in services can also cause problems for the company. An excess participation means that the
customers' needs, and wants will also increase. It will lead to an increase in the overall costs of
the company's processes. The quality of the service will also degrade because of the excessive
participation. Participation can also cause an increase in the waste in the manufacturing process.
The customers will try to ask the company to fulfill all their needs, and requirements. The
excessive production will also lead to an increase in the overall waste. An increase in customer
participation from different cultures can also lead to difficulty in interpreting the customers'
actual needs. A customer-oriented company shall indeed gain from the market. However, the
managers should limit the customers; otherwise, the customers shall supersede the firm. Thus, it
is essential to reduce the participation to get an accurate analysis of the needs, and wants. The
customers might also develop a perception that the firm is trying to deviate from customer-
oriented processes. The managers should also give more importance to the company's marketing
strategies than the customer's word of mouth strategy. Word of mouth should not supersede the
company's strategies. Thus, the company should limit the customer participation in services.