Prepared by Management Department | www.unimedia.ac.id | man@unimedia.ac.id

New Service InnovationNew Service Innovation

Within the EU services now account for 60% of GDP (Eurostat, 2006).

Growth in knowledge intensive business services (KIBS)

Growth in services – but what does this mean?

huge growth in coffee bars, smoothie bars and hair salons?

Since 2003, shares in oil companies have doubled.

Halliburton and Schlumberger, the world market leader for oil services, have more than tripled.

www.unimedia.ac.id

Outsourcing and service growth

Expected gains that companies can derive from outsourcing include:

• the reduction of operational costs;• the ability to transform fixed costs into variable costs;• the ability to focus on core competencies;• access to the industry-leading external competencies and expertise.

Business-to- business services (traditional)

Business-to- business services (KIBS)

Consumer services

Internal firm services

Public services

Not-for-profit services

Description Services provided for businesses

Specialist services provided to businesses

Services provided to individuals

Services provided by internal functions

Services provided by local and national government

Services provided by charities

Examples AccountancyLegal adviceTraining

Management consultancyIT consultancy

ShopsHotelsBankingHealth and beauty

FinancePersonnelIT

HealthEducationLeisurePrisons

HospicesCounsellingAid agencies

Customers Frequently purchased by professionals, who may not be end users

Frequently purchased by professionals, who may not be end users

Purchased by consumer of the service

Consumers of the service have no choice of provider

Funded through taxation and little choice for consumer

Funded through charities maybe government grants consumers chosen or choose.

Challenges Providing high-quality tailored and personal service

Providing high quality services to businesses who have high purchasing power

Providing a consistent service to a wide variety of customers

Delivering customised, personal service. And demonstrating value for money.

Delivering acceptable public services against a backcloth of political pressures.

Balancing needs of volunteers, donors and overwhelming needs of customers.

Typology of services

Technology and new service development

Technology has become the most significant enabler of innovation in services.

Transforming the roles of both employees and customers.

Easing the connectivity between service developers andcustomers.

E.g. ebay . . .

Company Industry sector New service/new business model

eBay On-line auction A new way of buying and selling through a community of individual users

Ryanair Airline A new way of consuming air-travel with no frills service and emphasis on economy

Amazon Retailer New way to buy goods – on-line retailer

Napster; iTunes

Music retailer New way to buy and download music

Google Internet search engine

A fast way to search for information on the internet

Partygaming On-line gambling Gambling and gaming from the comfort of your own home

Myspace Social networking A community of users on-line who can chat and share music, images, news from their own home

You-Tube On-line video and film archive

A community of users sharing home made video clips plus recorded favourite clips from movies

A range of new services that also create new business models, where technology plays a key role

Services areprocesses

Services areco-producedby the customer

Services areintangible

Services areperishableServices cannot

be transported

Services areproduced andconsumedsimultaneously

Services areheterogeneous

Characteristics of Services

New service innovation

As with products service, innovations can be classifiedin many ways: • eBay was new to the market; Google’s on-line auction

is new to Google;• Internal process innovations, e.g. Amazon: delivering books to consumer is

not new, but using internet;• Line extensions to services, e.g. banks offering insurance;• Service modifications, e.g internet access to airline passengers.

The service innovation process

Different from NPD: customer is part of the process

• Blueprinting the service Identify every activity and every possible outcome in the process

• Intensive market researchDirect contact facilitates dialogue

• Service prototypesDifficult because customer is part of processLevel of integration determines ability to prototype

Perceived service quality . . .Perceived service value . . .Customer expectations . . .

How do customers evaluate services?

• Reliability• Responsiveness• Assurance• Empathy• Tangibles

• Reliability– Providing service as promised– Dependability in handling customers’ problems– Performing services right first time– Performing services at the promised time– Maintaining error free records

• Responsiveness– Keeping customer informed when service will be performed– Prompt service to customers– Willingness to help customers– Readiness to respond to customers’ requests

• Assurance– Employees who instil confidence in customers– Making customers feel safe in their transactions– Employees who are consistently courteous– Employees who have knowledge to answer questions

• Empathy– Giving customers individual attention– Employees who deal with customers in a caring manner– Having the customers best interests at heart– Employees who understand the needs of their customers– Convenient business hours

• Tangibles– Modern equipment– Visually appealing facilities– Employees who have neat, professional appearance– Visually appealing materials associated with service

Final Project

Buatlah sebuah ide inovasi di industri tertentu. Berikan alasan mengapa Anda tertarik memasuki industri

tersebut. (gunakan analisis five forces porter) Buatlah nama perusahaan Anda, dan jelaskan visi dan

misinya. Jelaskan business model perusahaan Anda (jelaskan inovasi

yang dilakukan). Uraikan strategi marketing : target customer, customer

value, 4P Uraikan strategi operasional : proses produksi, apakah

inovasi akan dilakukan secara internal / akuisisi Uraikan strategi HRM : kebutuhan karyawan, pembagian

departemen Paper dikumpulkan tanggal 15 Desember 2010

www.unimedia.ac.id

www.unimedia.ac.id

End of Chapter 7