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
ByVijyata
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 JohnT. Gourville wrote in 2004 that the new offering should offer
plenty of new benefits while requiring little change in consumer behaviour.
Sure failures
DVORAK Keyboard
Long Haul
Satellite Radio
Easy Sells
McDonald’sVegetarian
menu
Smash hits
Google
New
offering
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
DEVELOPMENT1.BUSINESS
STRATEGY
DEVELOPMENTOR
REVIEW
2.NEWSERVICE
STRATEGY
3.IDEAGENERATION
4.CONCEPT
DEVELOPMENTAND
EVALUATION
5.BUSINESS
ANALYSIS
6.SERVICE
DEVELOPMENTAND
TESTING
7.MARKETTESTING
8.COMMERCIALIZATI
ON
9.EVALUATION
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.
1.
Identify
the
service
process
to be
blueprin
ted
2.
Identify
the
customer
or the
customer
segment
experien
cing the
service
3. Map
the
service
process
from the
custome
r’s point
of view
4. Map
contact
employe
e
actions
5. Link
contact
activitie
s to
needed
support
function
s
6. Add
evidence
of
service
at each
custome
r action
step
7.
Isolate
fail
points
8.
Establis
h time
frame
9.Analyze
profitabili
ty

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 vijyata.rwc@gmail.com or comment in
comment box