Chapter 9 – Service Development and Design
Failures of a new product/service can be caused by: No unique benefits, insufficient demand, unrealistic goals, poor
fit within the organization’s portfolio, poor location, poor financial backing, low quality product/marketing.
Most reliable predictors of success relate to product/service characteristics (meeting customer needs, advantage
over competition, technological sophistication), strategy characteristics (dedicated HR and R&D), process
characteristics (marketing, predevelopment, technological and launch proficiencies), and market potential.
Challenges of Service Design
The longer a service, the hard to explain. Especially as the service is intangible. Furthermore, services are variable
as they are delivered employee to customer. Two services are rarely the same.
Oversimplification – Words are inadequate to explain a service
Incompleteness – In describing service, people tend to omit detains or elements of the service which
they’re not familiar with.
Subjectivity – People are biased.
Biased Interpretation – No two people will define “quick, responsive, flexible” the same way.
New Service Development
Products designed via the steps of structured planning framework have a greater likelihood of success. Four basic
characteristics for a development system are: 1) It must be objective, not subjective, 2) Must be precise, not
vague, 3) Must be fact-driven, not opinion-driven, 4) Must be methodological, not philosophical.
Types of New Services
Major or Radical Innovations – New services for markets as yet undefined.
Startup Businesses – New services for a market already served by an existing product.
New Services for the Currently Served Market – Existing customers a service not previously available from
Service Line Extensions – Augmentations of existing service lines