The document summarizes the Service Innovation Course at Portland State University. It provides an overview of the evolution and focus of the course from 1997 to present. Key aspects summarized include: - The course started as Technology Marketing in 1997 and has evolved to focus on Service Innovation, with a goal of developing "T-shaped" competencies for marketing and technology professionals. - Students learn about topics like service science, new service development, and service-oriented business models to strategically think about how services can drive profitability. - The course uses lectures, readings, student projects, and guest lectures to teach concepts and apply learning to real-world topics like smart cities, big data advertising, and digital marketing services.

1. The Service Innovation CourseThe Service Innovation Course
at Portland State Universityat Portland State University
Robert R. Harmon, Ph.D.
Professor of Marketing and Service Innovation
Cameron Research Fellow
at Portland State Universityat Portland State University
Director, Strategic Marketing Area
School of Business, Portland State University
Portland, Oregon
harmonr@pdx.edu@p
November 20, 2013
Robert R. Harmon © 2013
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2. The Evolution of Service Innovation Education at Portland StateThe Evolution of Service Innovation Education at Portland State
 1997-2003: Technology Marketing. Offered as the core marketing course for the
MBA/Management of Innovation & Technology Option, Engineering Management MS and
Ph.D., and Ph.D. in Systems Science programs. This course had an emphasis on the creation
and delivery of customer value. Focus was on high-technology firms and their customers.
 2003-2010: Services Marketing. Offered as core course in the Marketing Information &
Technology Track for Ph.D., MBA, and advanced marketing majors. Other track courses were
Product Innovation & Management, E-Marketing, and Customer Relationship Management.g , g, p g
Focus was on the development of technology-capable marketing professionals.
 2010-Present: Service Innovation. Offered as a core course in the Marketing Innovation &
Technology Track for Ph.D., MBA and advanced marketing and supply chain management
majors Other track courses are Product Innovation & Management and E Marketing Focusmajors. Other track courses are Product Innovation & Management and E-Marketing. Focus
is on the development of “T” competencies for marketing managers, product managers,
designers, and technology service professionals.
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3. Marketing Innovation &Technology Track ThemeMarketing Innovation &Technology Track Theme
Because its purpose is to create a customer, business enterprise has two—and only
two—functions: marketing and innovation. They are the entrepreneurial functions,
all the rest are costs. Marketing is the distinguishing, the unique, function of the
business.
Peter F. Drucker (1954), The Practice of Management, New York: Harper Business
Publishers.
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4. Course DescriptionCourse Description
 Service innovation is an emerging interdisciplinary field that integrates knowledge from service
i i k ti i i d t d l t i f ti t h l b iscience, services marketing, engineering, product development, information technology, business
strategy, and social science as the driving force for the development of and transition to new service-
oriented business models. Services represent a large and growing proportion of the world economy.
Citizens of knowledge-based economies already predominantly work in services. Service is the key
economic driver for the U S and other developed economies accounting for approximately 70% ofeconomic driver for the U.S. and other developed economies, accounting for approximately 70% of
GDP. Service innovation creates competitive advantage for companies in all business segments.
Some companies such as Microsoft, Google, and Facebook are service companies. However,
companies that most people would consider to be manufacturing companies, such as Apple, IBM,
HP, and GE now generate a majority of their profits from service activities.
 This is a new course, not only at Portland State, but within academic disciplines worldwide. A
thorough understanding of service innovation is a core requirement for the successful development
of new business models for the commercialization of new services. Most college graduates in
Oregon, and indeed nationwide, will have careers in services. Unfortunately few students will
graduate with a comprehensive and actionable knowledge of service concepts and strategies. This
course is created to address this shortcoming in the business curriculum.
 Service Innovation is intended to provide a deeper understanding of key topics such as service
science, new service development, service transition, service platforms, service-dominant logic,
service-oriented business models, and services marketing strategy. Students will develop the ability
to critically assess and think strategically about how services can drive sales and profitability across
a wide range of markets and industries. Students will also gain insights on the creation and delivery
of intangible value through the development and commercialization of services. Special attention
ill b i t k ti d i t th t l th i ti t ti l fwill be given to new marketing and services concepts that leverage the innovation potential of
information technology for the enablement of world-class services including new Internet-based
services.
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5. Learning GoalsLearning Goals
 Service Innovation is focused on the issues that confront marketing executives as they
address the issues impacting the development of market-driven service strategies.
 The course recognizes that services present special challenges that must be identified,
analyzed, and successfully addressed in real situations. Critical thinking and assessmenty , y g
are emphasized.
 At its core, the course will focus on the requirement for developing strong customer
relationships through the creation of quality service experiences.
 The course will also explore the knowledge requirements for the creation of service The course will also explore the knowledge requirements for the creation of service
strategies across a variety of industries.
 Frameworks for understanding customer expectations, increasing customer value and
satisfaction, and the development of successful service-oriented business models are
id dconsidered.
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6. Course MethodCourse Method
 Lecture. Weekly lectures on service innovation topics. See weekly schedule.
 Service Literature. The course features a reading list that surveys the service innovation
discipline. No textbook is assigned.
 Reading Briefs. Each student is required to develop a written reading brief for an
assigned article and present the brief to the class. The brief covers: article overview, keyg p , y
learning points, follow-on research from a similarly themed article, and application of the
research concepts and findings to the student’s team project. Post presentation, each
student is required to post their review and presentation and lead an online forum
discussion with classmates.
 Service Innovation Project. Each student is assigned to a team with a choice of service
innovation topics. The goal is to develop a professional research paper on the chosen
topic. It may be a conceptual paper such as a research agenda for a developing topic, or
an applied paper that focuses on the practical application of service innovation conceptsan applied paper that focuses on the practical application of service innovation concepts
and theories. All papers survey both the academic and business periodical literature as
well as interviews with leading industry experts.
 Guest Lectures. Each term the course features several lectures by service professionals.
Executives from industries such as cloud services big data direct digital marketingExecutives from industries such as cloud services, big data, direct digital marketing,
advertising, web analytics, alternative energy, smart cities, social media, etc., have visited
the class. Often these industry experts become resources for the team projects.
 Final Presentation. Each team presents their research projects to a panel of service
i d t tiindustry executives.
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7. Course OutlineCourse Outline
Week Lecture Topics
1 F d ti f S i I ti S i i S i h ll T h d i t1 Foundations of Service Innovation: Service science, Service challenges, T-shaped innovators
2 Value Dimensions of Service Innovation: Goods-dominant logic, Service-dominant logic, Managing
value co-creation, Understanding the power of intangible value—knowledge, emotion, and the service
experience, Building relationships.
3 S i S t d A li ti A E T t ti W t F d I f ti T h l3 Service Systems and Application Areas: Energy, Transportation, Water, Food, Information Technology,
Retail, Finance, Healthcare, Education, Government.
4 Identifying Service Opportunities: Continuous vs. disruptive innovation, value migration, creating
new markets, redefining existing markets, requirements research,
5 S i D i D i d d l t C t d fi d i S i t d d5 Service Design: Design and development processes, Customer-defined services, Service standards,
Servicescapes, and Service platforms
6 Service Strategy: Exploration and exploitation, Competitive advantage through services, Service-based
business models.
Midt P t tiMidt P t tiMidterm PresentationsMidterm Presentations
360 Reviews Due360 Reviews Due
7 Service Transition Strategies: The evolution of service in manufacturing companies, The IBM story,
Hybrid services, Pure services.
8 IT bl d S i Bi d t i S t t k S t Citi O li i S i l M di8 IT-enabled Services: Big data services, Smart networks, Smart Cities, Online services, Social Media,
Green IT/Sustainable IT services, Location-based services, Digital marketing services, Privacy and
online services.
9 Managing Services: Commercializing services, Services pricing, Service intermediaries, Measuring
i f S i i f i Ri kservice performance, Service satisfaction, Risk management.
10 Team Project PresentationsTeam Project Presentations
11 Final Projects DueFinal Projects Due
360 Reviews Due360 Reviews DueRobert R. Harmon © 2013
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8. Reading ListReading List
1. Anderson, E.W., C. Fornell, and R.T. Rust (1997), "Customer satisfaction, productivity, and profitability: Differences
between goods and services", Marketing Science, 16(2), 129-145.
2. Berry, L., V. Shankar, J. Parish, S. Cadwallader, and T. Doetzal (2006), “Creating New Markets Through Service
Innovation,” MIT Sloan Management Review, 47(2), Winter, 56-63.
3 Ch E R H d H D i k (2012) “P i d V l C C i f IT bl d S i S d3. Chan, E., R. Harmon, and H. Demirkan (2012), “Privacy and Value Co-Creation for IT-enabled Service Systems, and
Service Innovation: Cui Bono?” Proceedings of the Hawaii International Conference on System Sciences (HICSS-45),
January.
4. Gebauer, H. A. Gustafsson, and L. Wittel (2011), “Competitive Advantage Through Service Differentiation by
Manufacturing Companies,” Journal of Business Research, 64, 1270-1280.
5. Grace, D. and A. O'Cass (2004), "Examining Service Experiences and Post-Consumption Evaluations", Journal of Services
Marketing, 18(6), 450-461.
6 H R d H D i k (2011) “Th N t W f S t i bl IT ” IT P f i l IEEE C t S i t6. Harmon, R., and H. Demirkan (2011), “The Next Wave of Sustainable IT,” IT Professional, IEEE Computer Society,
January/February, 19-25.
7. Harmon, R. H. Demirkan, and D. Raffo (2012), “Roadmapping the Next Wave of Sustainable IT, foresight, 14(2), 121-138.
8. Kindstrom, D. (2010), “Towards a Service-Based Business Model: Key Aspects for Future Competitive Advantage,”
European Management Journal, 28, 479-490.
9. Kindstrom, D. and C. Kowalkowski (2009), “Development of Industrial Service Offerings: A Process Framework,” Journal
of Service Management, 20(2), 156-172.
10. Mathieu, V. (2001), “Product Services: From a Service Supporting the Product to a Service Supporting the Client,” Journal
of Business and Industrial Marketing, 16(1), 39-58.
11. Menor, L., M. Tatikonda, and S. Sampson (2002), “New Service Development: Areas for Exploitation and Exploration,”
Journal of Operations Management, 20, 135-157.
12. Nordin, F. and C. Kowalkowski (2010), “Solution Offerings: A Critical Review and Reconceptualization,” Journal of
Service Management, 21(4), 441-459.
13. Nordin, F., D. Kindstrom, C. Kowalkowski, and J. Rehme (2011), “The Risks of Providing Services: Differential Risk
Effects of the Service Development Strategies of Customization, Bundling, and Range,” Journal of Service Management,
22(3), 390-408.
14. Payne, A., K. Storbacka, and P. Frow (2008), “Managing the Co-creation of Value,” Journal of the Academy of Marketing
Science, 36, 83-96.
15. Pinhanez, C. (2008). "Service Systems as Customer-Intensive Systems and its Implications for Service Science and
Engineering", Proceedings of the 41st
Hawaii International Conference on System Sciences (HICSS-41), 10 pages, IEEE
Computer Society, January.
16. Spohrer, J. and P. Maglio (2008), “The Emergence of Service Science: Toward Systematic Service Innovations to
Accelerate Co-Creation of Value,” Production and Operations Management, 17(3), May-June, 238-246.
17. Spohrer, J., S. Vargo, N. Caswell, and P. Maglio (2008), “The Service System is the Basic Abstraction of Service Science,”
Proceedings of the Hawaii International Conference on System Sciences (HICSS-41), January.
18. Vargo, S.L. and M.A. Akaka (2009), “Service-Dominant Logic as a Foundation for Service Science: Clarifications,” Service
Science, 1(1), 32-41.
19. Vargo, S. L. and R.F. Lusch (2004a), “Evolving to a New Dominant Logic for Marketing", Journal of Marketing, 68, 1-17.
20. Vargo, S. L. and R.F. Lusch (2004b), "The Four Service Marketing Myths: Remnants of a Goods-Based, Manufacturing
Model,” Journal of Service Research, 6(4), 324-335.
21. Vargo, S.L. and R.F. Lusch (2006), "Service Dominant Logic: Reflections and Refinements", Marketing Theory, 6(3), 281-
288.
22. Ulaga, W. and W. Reinartz (2011), “Hybrid Offerings: How Manufacturing Firms Combine Goods and Services
Successfully,” Journal of Marketing, 75, November, 5-23.
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9. Service Innovation ProjectsService Innovation Projects——Fall 2013Fall 2013
 Smart Systems for Smart Cities: The Evolution of the City through Service Innovation
 Designing the Service Experience: Models for Customer Engagement and Value Co-
Creation
 Big Data and the Evolution of Smart Location-Based Advertising Services
 Vi l G f i A E l ti f E i Bi D t D i Di t Di it l M k ti Viral Geofencing: An Exploration of Emerging Big Data Driven Direct Digital Marketing
Services.
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