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Service Product Development
 

Service Product Development

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A presentation on new service development

A presentation on new service development

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    Service Product Development Service Product Development Presentation Transcript

    • Service Product Development Group III- Arjun, Deepa, Jeev, Saanwin & Sonia
      • Service is an act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
      • - Philip Kotler
      What is a Service?
    • Difference between goods & services SERVICES GOODS
      • Intangible in nature
      • Inseparability of production and consumption
      • Perishable nature
      • Lack of ownership
      • Tangible in nature
      • Separable
      • Non perishable
      • Can be owned
    • TYPES OF NEW SERVICES
      • Major/Radical Innovations : Are new services for markets as yet undefined. E.g., First broadcast television services
      • Start up businesses : New services for a market that is already served by existing products E.g., online banking for financial transactions
      • New services for the currently served market : Attempts to offer existing customers of the organization, a service not previously available from the company E.g., Barnes and Noble offering coffee
      • Service line extensions : augmentation of the existing service line. E.g., restaurant adding new menu items, an airline offering new routes
      • Service improvements : changes in features of service that are already offered. E.g., extended hours of service (24x7),added amenities in a hotel room.
      • Style changes : the most modest service innovations, which have a significant effect on customer perception, emotion and attitude. E.g., changing the color scheme, revising the logo
    • SERVICE PRODUCT DEVELOPMENT
      • Research suggests that products that are designed and introduced in a structured planning framework have a greater likelihood of ultimate success than those not developed within a framework.
      • Characteristics given by Lynn Shostack:-
      • It must be objective and not subjective- based on customer perceptions, market needs & feasibility
      • It must be precise and not vague
      • It must be fact driven and not opinion driven
      • It must be methodological and not philosophical.
      • Employees and customers should be
      • involved in the new service development.
      • Ex: Metropolitan Life Insurance,
      • Marriott Corporation.
    • NEW SERVICE DEVELOPMENT PROCESS
      • Business strategy development or review
      • New service strategy development
      • Idea Generation
        • Screen Ideas against new service strategy
      • Concept Development & evaluation
        • Test concept with customers and employees
      • Business Analysis
        • Test for profitability and feasibility
      • Service development & testing
        • Conduct service prototype test
      • Market testing
        • Test service & other marketing mix elements
      • Commercialization
      • Post introduction evaluation
      Front-end Planning Implementation
    • FRONT-END PLANNING
      • Business strategy development or Review
      • Review mission & vision
      • Orientation towards growth
      • Primary strategic orientations
      • -prospectors seek to be innovative, searching out new opportunities and taking on risk.
      • -defenders are experts in their pwn areas & tend not to seek new opportunities outside their domain or expertise.
      • -analyzers maintain stability
      • -reactors seldom make adjustments
      • Cost leadership strategy
    • Our promise is to help people feel close to what is important to them
    •  
    • 2. New Service Strategy Development
      • By Defining a new service strategy, the organization will be in a better position to begin generating specific ideas
      • One way to begin is to use the framework
      • The other one is to use the matrix
    • 3. Idea Generation
      • Ideas generated at this phase can be passed through the new service strategy screen.
      • many methods and avenues are available for searching out new service ideas.
      • Methods:-
      • Interacting with others
      • Creativity techniques
              • -
    • 4.Concept Development and Evaluation
      • Who is the target market and who is the decision maker in the purchasing process.
      • What features must the product incorporate.
      • What benefits will the service provide to the customer and to the organization.
      • How will client react to the service.
      • How the service can be delivered most cost effectively.
      • What will be the cost to deliver the service.
      • Evaluation by employees and customers on -whether they understand the idea of the proposed service,
      • -whether they are favorable to the concept, and
      • -whether they feel it satisfies an unmet need.
    • 5. Business Analysis
      • Marketing Assessment
      • Financial Assessment
    • A. Marketing Assessment
      • Target market
      • Forecasting of sales volume
      • Indication of product positioning
      • Competitor reaction
      • Specification of new product development
    • B. Financial Assessment
      • Sales volume and value
      • Variable cost of production
      • Incremental fixed cost
      • Contribution and profitability of the new service
    • Implementation “ The Beauty of Every Idea Lies in How We Implement it…”
    • Implementation Stages
      • Once the new service concept has passed all the front-end planning hurdles, it is ready for the implementation stage process.
        • Service Development & Testing
        • Market Testing
        • Commercialization
        • Post-Introduction Evaluation
    • 6. Service Development & Testing
      • The intangibility presents unique challenges.
      • The stage should involve all who have a stake in the new service.
      • The concepts are refined to the point at which a detailed service blueprint can be constructed.
    • Service Blueprint
      • Picture or map that accurately portrays the service system.
      • Helps different people involved to understand and deal with it objectively.
      • Displays the service by simultaneously depicting the process of delivery, the points of customer contact, the roles of customers and employees, and the visible elements of service.
    • Service Blueprint
      • The final step is to transform the blueprint into specific implementation plans for its part of service delivery process.
      • All parties involved in any aspect of the new service need to work together to delineate the details of the new service.
    • 7. Market Testing
      • Difficult to test in isolated markets.
      • e.g. Hospital has only one point of delivery.
      • The new service may be offered to the employees and their families for assessing responses.
      • An alternate is to test variations in pricing and promotions in a less realistic context by presenting customers with hypothetical mixes and getting their responses in terms of intentions to try the service under different conditions.
      • It is also important to do a pilot run of the service to check the smoothness in the functioning of operations.
    • 8. Commercialization
      • Service goes live & is introduced at the market space.
      • The stage has 2 objectives
        • Built & maintain acceptance of new service among large number of service delivery personnel responsible for service quality.
        • Monitor all aspects of service during introduction and through the complete service cycle. Every detail of the service is assessed. Operating efficiency and costs are tracked.
    • 9. Post-Introduction Evaluation
      • The information gathered during commercialization of service is reviewed and changes are made in
        • Delivery process
        • Staffing
        • Service mix
      • No service will stay same. Services are exposed to deliberate or unplanned changes.
      • This calls for formalizing the review process to enhance quality and understand customer perceptions.
    • Achieving success in New service development
      • Unlike in the development of a product, in developing a service, the product core is of only secondary importance.
      • Quality of the total service offering & of the marketing support that goes with it.
      • Three factors contributing most to success are,
      • Market synergy
      • Organizational factors
      • Market research factors
    • Saintgits Institute of Management