New service development

Offering a unique service which was not not earlier offered into the market is called new service and the process of designing such new service is called New Service Development.

1. NEW SERVICE DEVELOPMENT By Vijyata Assistant professor, Dept. MBA Ranchi women’s College, Ranchi University

2. SERVICES Services can be defined as economic activities between two parties , implying an exchange of value between seller and buyer in the marketplace. Intangibility, Inseparability, Perishability, and Variability are the basic characteristics of Services. Example : Bike repair, spa

3. New Service A service can be termed as a new service when it is innovative. Some new services are adaptive replacements. They are the improved versions of the existing service product either in technology, style, status or performance. (K. Rama MohanaRao )

4. According to Professor G.L.Shostack , new service should have the following attributes – It must be objective, not subjective It must be precise , not vague It must be fact driven , not opinion driven It must be methodological , not philosophical New Service Attribute

5. Criteria for success of New offering Professor John T. Gourville wrote in 2004 that the new offering should offer plenty of new benefits while requiring little change in consumer behaviour. Changes in customer behaviour High Low Few Large New benefits offered

6. Categories of New Service innovations Major Service innovations : Truecaller Major Process innovations : Online Education Product – line extensions : Call forwarding, Raymond’s In-house stitching Process – line extensions: Phyigital retailing Supplementary Service innovations: Valet Parking Service improvements Style Changes

7. STAGES IN NEW SERVICE DEVELOPMENT DROP

8. BUSINESS STRATEGY DEVELOPMENT OR REVIEW It includes reviewing : Vision Mission Strategic Orientation 1.the cost-leadership strategy 2.the differentiation strategy 3.focus strategy Values 1.The operationally excellent firm , which is efficient and delivers services at lowest cost to customer 2.The product/service leader offering innovative services under a strong brand 3. The customer intimate firm, that excels in customer attention and customer service

9. NEW SERVICE STRATEGY The new service strategy should focus on : Intensive Growth Integrative Growth Diversification New Service Development Diversification Market penetration Market development CURRENT NEW CURRENT NEW SERVICES Fig: Ansoff’s Matrix indicating intensive growth strategies MARKET

10. IDEA GENERATION Sources of new idea can be : External Sources : customers ; lead-users ; patents, inventions; competitors; suppliers; trade fairs; consultants; channel members; government ; published journals and magazines Internal Sources : Brainstorming exercise with employees; complaint systems; suggestion system ; internal R&D Only feasible and profitable idea is carried forward, rest ideas are dropped at this stage only

11. SERVICE CONCEPT DEVELOPMENT Here, the company has to take a holistic view of the entire performance that they want customers to experience, highlighting the specific dimensions on which the firm plans to compete . This includes integration of Core Product : Central component that supplies the principal problem solving benefits the customer seek. Supplementary Services : Augment the core product by means of Facilitating supplementary services Enhancing supplementary services Delivery Process : Process used to deliver both the core product and each of supplementary product.

12. The Service concept has four attribute : Value- what customer are willing to pay for Form and Function – overall shape of service Experience – experience perceived by the customer Outcomes – benefit provided by the service

13. BUSINESS ANALYSIS Service concept is then tested for Marketing , technical and Economic feasibility . Profitability of the business idea is measured in terms of three year ROI/ROCE parameters. If in case the idea is not profitable , it is dropped immediately without incurring further cost.

14. SERVICE DEVELOPMENT & TESTING Post feasibility analysis, the new service product is approved and Service Blueprint and Service Prototypes are developed taking care of every service encounters. And these service prototypes are actually tested on real customers

15. SERVICE BLUEPRINTING A service blueprint is a visual portrayal of the service plan that displays the service by simultaneously depicting the process of service delivery, the point of customer contact, the role of customer and employees and the visible element of the service.

16. Format of Service blueprint

17. MARKET TESTING Once service prototypes have been tested , new service is put for a pilot testing . Alternative marketing mix elements or 7Ps’ options are tested at this stage. Pilot testing is done of small group , primarily on employees and feedback is collected. Modifications are done before presenting the new idea into the market.

18. COMMERCILIZATION AND EVALUATION Finally the new service thus produced is commercialized The approaches can be Selective Integrative Intensive

19. THANK YOU !!! For query / suggestions/feedback mail at v [email protected] or comment in comment box