Presentation is loading. Please wait.

Presentation is loading. Please wait.

Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.1 Chapter 14 New service innovation.

Similar presentations


Presentation on theme: "Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.1 Chapter 14 New service innovation."— Presentation transcript:

1 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.1 Chapter 14 New service innovation

2 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Introduction 2.Growth in services 3.Technology and new services 4.Characteristics of services 5.Customer relationship process 6.New service innovations 7.NSD process 8.Summary & recap New service development (NSD)

3 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.3 Introduction Growth in services Characteristics of services Services are processes where customer is part of it Viewed differently to products Services contribute to new business models: eBaynew way of conducting business Ryanairnew way of flying Amazonnew way of viewing and buying books Napsternew way to buy music

4 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.4 Within the EU services now account for 60% of GDP (Eurostat, 2006). Growth in knowledge intensive business services (KIBS) Growth in services – but what does this mean? huge growth in coffee bars, smoothie bars and hair salons? Since 2003, shares in oil companies have doubled. Halliburton and Schlumberger, the world market leader for oil services, have more than tripled.

5 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.5 cleaners, decorators, maintenance workers, canteen staff, etc would now purchase the services of road and rail transport. So, a company that was earlier employing Growth in services – but what does this mean? (Continued)

6 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.6 Outsourcing and service growth Expected gains that companies can derive from outsourcing include: the reduction of operational costs; the ability to transform fixed costs into variable costs; the ability to focus on core competencies; access to the industry-leading external competencies and expertise.

7 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.7 Business-to- business services (traditional) Business-to- business services (KIBS) Consumer services Internal firm services Public services Not-for-profit services DescriptionServices provided for businesses Specialist services provided to businesses Services provided to individuals Services provided by internal functions Services provided by local and national government Services provided by charities ExamplesAccountancy Legal advice Training Management consultancy IT consultancy Shops Hotels Banking Health and beauty Finance Personnel IT Health Education Leisure Prisons Hospices Counselling Aid agencies CustomersFrequently purchased by professionals, who may not be end users Purchased by consumer of the service Consumers of the service have no choice of provider Funded through taxation and little choice for consumer Funded through charities maybe government grants consumers chosen or choose. ChallengesProviding high- quality tailored and personal service Providing high quality services to businesses who have high purchasing power Providing a consistent service to a wide variety of customers Delivering customised, personal service. And demonstrating value for money. Delivering acceptable public services against a backcloth of political pressures. Balancing needs of volunteers, donors and overwhelming needs of customers. Typology of services

8 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.8 Technology and new service development Technology has become the most significant enabler of innovation in services. Transforming the roles of both employees and customers. Easing the connectivity between service developers and customers. E.g. ebay...

9 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.9 Founded in September 1995 eBay, Inc. is possibly the most successful web-based enterprise in existence. Four service dimensions Illustration New service conceptOn-line auction community of traders New client interfaceIntroduction of payment system that helps eBayers trade more easily – Paypal New service delivery system Huge investment in technology infrastructure to improve reliability and performance Technological optionsIntroduction of voice over internet protocol service – SKYPE Technology and new service development (Continued)

10 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide CompanyIndustry sectorNew service/new business model eBayOn-line auctionA new way of buying and selling through a community of individual users RyanairAirlineA new way of consuming air-travel with no frills service and emphasis on economy AmazonRetailerNew way to buy goods – on-line retailer Napster; iTunes Music retailerNew way to buy and download music GoogleInternet search engine A fast way to search for information on the internet PartygamingOn-line gamblingGambling and gaming from the comfort of your own home MyspaceSocial networkingA community of users on-line who can chat and share music, images, news from their own home You-TubeOn-line video and film archive A community of users sharing home made video clips plus recorded favourite clips from movies A range of new services that also create new business models, where technology plays a key role

11 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Services are processes Services are co-produced by the customer Services are intangible Services are perishable Services cannot be transported Services are produced and consumed simultaneously Services are heterogeneous Characteristics of Services

12 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide The customer relationship process Services marketing Service quality Relationship quality Service value Customer satisfaction Customer retention Customer value

13 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide New service innovation As with products service, innovations can be classified in many ways: eBay was new to the market; Google’s on-line auction is new to Google; Internal process innovations, e.g. Amazon: delivering books to consumer is not new, but using internet; Line extensions to services, e.g. banks offering insurance; Service modifications, e.g internet access to airline passengers.

14 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Booz et al. (1982)Lovelock (1984) New to the world products: new products that not only represent a major new challenge to the supplier, but which are also seen to be quite new in the eyes of customers Major innovation: new services for markets as yet undefined; innovations usually driven by information and computer-based technologies New product lines: new products which represent major new challenges to the supplier Start-up business: new services in a market that is already served by existing services Additions to existing product lines: new products that supplement a company’s established product lines, so rounding out the product mix New services for the market presently served: new service offerings to existing customers of an organisation (although the services may be available from other companies) Improvements and revisions to existing products: new products that provide improved performance and so replace existing products Service line extensions: augmentations of the existing service line such as adding new menu items, new routes and new courses Repositionings: existing products that are targeted to new markets or market segments Service improvements: changes in feature of services that currently are being offered Cost reductions: new products that provide similar performance at a lower cost of supply Style changes: the most common of all “new services”; modest forms of visible changes that have an impact on customer perceptions, emotions and attitudes, with style changes that do not change the service fundamentally, only its appearance Typology for innovations (Ozdemir, 2007)

15 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Customer roles in NPD (Nambisan, 2002) Customer roleNPD phase Customer as resource Ideation Customer as co- creator Design and development Customer as userProduct testing Product support

16 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide The service innovation process Different from NPD: customer is part of the process Blueprinting the service Identify every activity and every possible outcome in the process ‘Prick-eared’ market research Direct contact facilitates dialogue Service prototypes Difficult because customer is part of process Level of integration determines ability to prototype E.g. a doctor’s home visit a visit to the cinema

17 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Customer interaction process Customer Service provider Customer roles Encounter management Critical incidents Service encounter Determinants

18 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Perceived service quality... Perceived service value... Customer expectations... How do customers evaluate services? Reliability Responsiveness Assurance Empathy Tangibles

19 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Reliability –Providing service as promised –Dependability in handling customers’ problems –Performing services right first time –Performing services at the promised time –Maintaining error free records Responsiveness –Keeping customer informed when service will be performed –Prompt service to customers –Willingness to help customers –Readiness to respond to customers’ requests Assurance –Employees who instil confidence in customers –Making customers feel safe in their transactions –Employees who are consistently courteous –Employees who have knowledge to answer questions

20 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Empathy –Giving customers individual attention –Employees who deal with customers in a caring manner –Having the customers best interests at heart –Employees who understand the needs of their customers –Convenient business hours Tangibles –Modern equipment –Visually appealing facilities –Employees who have neat, professional appearance –Visually appealing materials associated with service

21 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide Pure tangible good 2.Tangible good with accompanying services 3.Hybrid 4.Major service with accompanying minor goods and services 5.Pure service Categories of service mix

22 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide New service innovation For many years the literature overlooked this concept! Innovation deemed to require a new physical “thing” But, the world of business suggested new services could deliver even more significant changes (new business models): First Direct Ryanair eBay Apple’s iTunes

23 Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide The End Thank you for listening


Download ppt "Paul Trott, Innovation Management and New Product Development, 4 th Edition, © Pearson Education Limited 2008 Slide 14.1 Chapter 14 New service innovation."

Similar presentations


Ads by Google