NEW SERVICE PRODUCT DEVELOPMENT

NEW SERVICE PRODUCT DEVELOPMENTMARKETING OF SERVICES

Presented bynabadeep urang (41) and sangita paul (64)PRESENTED TOASST. PROF. AMIT KUMAR DAS

CONTENTSPAGE NUMBER

Introduction2-3

Front end planning4-5

implementation6-7

INTRODUCTION:Service development has direct parallels in the new service product development process for manufactured goods. Because of inherent characteristics of services, however, the development process for new services requires adaptations. The challenges that typically lie in developing new service lie in defining the concept in the early stages of the developmental process and again at the prototype developmental stage. Other challenges come about design and implementation of the new service because these steps often involve coordinating human resources, technology, internal processes, and facilities within already existing firms. Partially because of these challenges, service forms are generally less likely to carry out a structured developmental process for new innovations than are their manufacturing and consumer-goods counterparts. Moreover, before proceeding to the next step in the new service development process, the previous checkpoints must be meet.Many companies find that some steps can be worked on simultaneously and in some instances a step maybe even skipped, particularly for simple products and services. The overlapping of steps and simultaneous development of various pieces of the new service development process has been referred to as flexible product development. This type of flexible, speedy process is particularly important technology industries, in which products and services evolve quickly. Often, the next version of the service is in planning stages at the same time that the current version is being launched.The new service development process is divided into two sections: front-end planning and implementation. The front end determines what service concepts will be developed, whereas the black end implements the service concept.

FIGURE1: new service development process

FRONT END PLANNING:BUSINESS STRATEGY DEVELOPMENT:One of the first steps in new service development is to review the organizations mission and vision. The new business strategy and specific new service ideas must fit within the larger strategic mission and vision of the organization.

NEW SERVICE STRATEGY DEVELOPMENTResearch suggested that a product portfolio strategy and a defined organizational structure for new product or service development are critical and are the foundation for success. This type of new services that will be appropriate depend on the organizations goals, vision, capabilities, and growth plans. By defining a new service innovation strategy, the organization will be in a better position to begin generating specific ideas. For e.g. , it may focus its growth on new services at a particular level of the described continuum from major innovations to styles changes. Or the organization may define its new service strategy even more specifically in terms of particular market segments or in terms of specific profit generation goals.One way to begin formulating a new service strategy is to use the framework for identifying growth opportunities. The framework allows an organization to identify possible directions for growth and can be helpful as a catalyst for creative ideas. The framework may also later serve as an initial idea screen if, for example, the organization chooses to focus on one or two of the four cells in the matrix. The matrix suggest that the company can develop a growth strategy around current customers or new customers and can focus on current offerings or new service offerings.

IDEA GENERATIONThe next step in the process is the generation of ideas that can be passed to the new service strategy described in the preceding step. Formal brainstorming, solicitation ideas from employees and customers, lead user research and learning about competitors offerings are some of the most common approaches. Some companies are even collaborating with outsiders or developing licensing agreements and joint ventures in an effort to exploit all possible source of new ideas.Observing customers and how they use the firms products and services can also generate creative ideas for new innovations. Sometimes referred to as EMPATHIC DESIGN, observing is particularly effective in situations in which customers may not be able to recognize or verbalize their need.. some organizations found that internal networks of employees, across functions and disciplines , can be great sources of innovative ideas; thus ,organizational practices that encourage networking and make collaboration easy are also ways to encourage new ideas.

SERVICE CONCEPT DEVELOPMENT AND EVALUATIONOnce an idea surfaces that is regarded as a good fit with both business and the new service strategies, it is ready for initial development. The inherent characteristics of services place complex demands on this phase of the process. Drawing pictures and describing an intangible service in concrete terms are difficult, particularly when the service is not standardized. By involving multiple parties in sharpening the concept definition, it often becomes apparent that individual views of the concept are not the same. After clear definition of the concept, it is important to produce a description of the service that represents its specific characteristics and then determine initial customer and employee responses to the concept. The service design document should describe the problem addressed by the service, discuss the reasons for offering the service. The roles of customers and employees in the delivery process are also described. It may be very useful to create level blueprint at this point in the service innovation process. The service concept is then evaluated by asking employees and customers whether they understand the idea of the proposed service, whether they are favorable to the concept, and whether they feet it satisfies an unmet need.

BUSINESS ANALYSISAssuming that the service concept is favorably evaluated by customers and employees at the concept development stage, the next step is to estimate its economic feasibility and potential profit implications. Demand analysis, revenue projections, cost analyses and operational feasibility are assessed at this stage. Because the development of service concepts is so closely tied to the operational system of the organization, this stage will involve preliminary assumptions about the costs of personnel hiring and training, delivery system enhancements, facility changes and any other projected operations costs. The organization will pass the results of the business analysis through its profitability and feasibility screen to determine whether the new service idea meets the minimum requirements.

IMPLEMENTATIONOnce the new service concept has passed all the front-end planning hurdles, it is ready for the implementation stages of the process.

SERVICE PROTOTYPE DEVELOPMENT AND TESTINGIn the development of new tangible products, the development and testing stage involves the construction of product prototypes and testing for consumer acceptance. Again, because services are intangible and simultaneously produced, consumed and frequently cocreated, this step presents unique challenges. To address these challenges, this stage of service development should involve all who have a stake in the new service: customers and contact employees as well as functional representatives from marketing, operations, and human resources. During this stage, the concept is refined to the point at which a detailed service blueprint the customer experience and the implementation plan for the service can be produced. The blueprint is likely to evolve over a series of iterations on the basis of input from all involved parties.

MARKET TESTINGAt the market testing stage of the development process, a tangible product might be test marketed in a limited number of trading areas to determine marketplace acceptance of the product as well as other marketing mix variables such as promotion, pricing, and distribution system. Because new service offerings are often interwined with the delivery system for existing services, it is difficult to test new services in isolation. And in some cases, it may not be possible to introduce the service to an isolated market area because the organizations has only one point of delivery. There are alternatives way of testing the response to marketing mix variables, however. The new service might be offered to employees of the organization and their families for a time to assess to their responses to variations in the marketing mix.It is also extremely important at this stage in the development process to do a pilot run of the service to be sure that the operational details are functioning smoothly. By this point mistakes in design are harder to correct.

COMMERCIALIZATIONDuring the commercialization stage, the services goes live and is introduced to the marketplace. This stage has two primary objectives. The first is to build and maintain acceptance of the new service among large number of service delivery personnel who will be responsible day-to-day for service quality. This task is made easier if acceptance has been built by involving service delivery personnel as one of the key groups in the design and developmental process all along. The second objective is to monitor all aspects of the service during the introduction and through the complete service cycle. If the customer needs six months to experience the entire service, then careful monitoring must be maintained through at least six months. Every detail of the service should be assessed- phone calls, face-to-face transactions, billing, complaints, and delivery problems. Operational efficiency and costs should also be tracked.

POSTINTRODUCTION EVALUATIONAt this point, the information gathered during the commercialization of the service can be reviewed and changes made to the delivery process, staffing, or marketing mix variables on the basis of actual market response to the offering. No service will stay the same. Whether deliberate or unplanned, changes will always occur. Therefore, formalizing the review process to make those changes that enhance service quality form the customers point of view is critical.1 | Page