Assignment Set- 2 Q.

1 Explain the types of new service developments and its stages
ANS. Types of New Service Development and its stages

Before discussing about the types of services, let us first learn the meaning of new service development. Products that are not developed within a framework are less likely to succeed when compared to those developed and implemented within a structured planning framework. The new service development system must have four basic characteristics because of the intangible nature of service. The four basic characteristics are: . Service must not be subjective, it should be objective. . It should be well defined not vague or ambiguous. . It must be based on facts rather than opinions. . It should be a step wise procedure rather than a philosophical one. The process of development of a new service should indeed follow a structure and a set of defined steps but this structure need not be too rigid. Service involves the interaction of customers and employees. Services are consumed as soon as it is produced. The involvement of employees in the design and implementation of new service design is beneficial since they are in direct contact with customers and know exactly what the customers expect. Customers are also often involved in the design of new service as they sometimes play an active role in service delivery. Let us now discuss about the different types of new services. Types of new services The following could be considered as different types of new services:     Major or radical innovations are services associated with markets that are not defined yet. Start-up businesses consist of new services for markets that already have products that meet customer needs. New services for currently served market are associated with offering customers with new services that were previously not offered by the company. Service line extensions are the expansion of the existing service line.
Page 1

RANJAN PAL , 511110942

RANJAN PAL . this could changes in features of existing services. Front end planning Let us learn the different development stages involved in front end planning. New service strategy development: A product portfolio strategy and defined organisational structure for a new product or service development is critical for the success of an organisation. Business strategy development or review: Every organisation has a unique vision and mission. emotions and attitudes. 511110942 Page 2 . Figure shows the stages involved in new service development. 2.  Service improvements represent changes in the already existing services. The new service developed should align itself with the strategic vision and mission of the organisation. Style changes are the simplest service innovation and have a significant effect on customer perception. Stages in new service development Let us now discuss the stages in new service development. 1. The growth efforts of the organisation must also be considered while developing the new service. Figure : Stages in New Service Development As shown in figure. the first two stage of new service development include front-end planning and implementation. Let us first discuss the frontend planning. A new service can be developed by first reviewing this vision and mission.

types of services. Business analysis: Estimating the economic feasibility and potential profit implications form a part of the next step after development. Commercialisation: The service goes live and is introduced in the marketplace in this stage of the process. Service concept development and evaluation: The development phase begins once the idea is regarded to fit both the business and new service strategies. let us now discuss about the implementation. time horizon for development. This step involves the building and maintaining acceptance of the new service in the market. These challenges can be addressed by involving all those who are involved in the new service in this step of the process. Service being intangible. 3. ideas from employees and customers. it is difficult to test services in isolation. the information gathered during commercialisation of the service can be reviewed and changes made to the delivery process. Describing an intangible service in concrete terms is difficult. profit criteria. and growth plans of the organisation need to be considered while developing new types of services. Post introduction evaluation: At this point. Demand analysis. It is in this step that the service is refined and service blueprint is drawn out. Idea generation: Generation of new ideas is the next step in the process. or marketing mix variables on the basis of actual market response to the offering. Service development and testing: This is the step where product prototypes are constructed and customer acceptance is tested. cost analyses and operational feasibility are assessed at this stage. Implementation We shall now learn the different development stages involved in implementation. learning about competitors are the methods used for idea generation. or other factors. Market testing: This is the stage where market acceptance is evaluated by introducing the new service in a test market. The new services might be offered to employees and their families for a time to assess their responsiveness to variations in the marketing mix. vision. capabilities. Due to the nature of services. Excellent internal marketing will contribute significantly to the success of the new service. The new service strategy screen screens the idea developed at this phase. 5. Service never RANJAN PAL . forming the product description and drawings and presenting it to customers would be the next step. 4. 511110942 Page 3 . After learning about the front-end planning. which include: 1. places complex demands on this phase of the process. lead user research.The goals. revenue projections. Brainstorming. A new service strategy could be defined in terms of markets. For a tangible product. 2. 3. staffing. This step presents unique challenges due to the intangible nature of service and the fact that the production and consumption is simultaneous. 4.

The following are the keys for successful differentiation:     Uderstand your customers very well.2 What is service differentiation? Explain service differentiation strategies. Hence it is necessary to evaluate the changes so as to improve service quality. Identify a totally new market or type of product or service. and then you will know the requirements of the customers.  Select unique channel for the service: Use unique channels like phone or internet to offer a service. Offer services to your customers in such a way that they should feel really good about doing business with you. Guarantee/warranty: Provide offers like 100% money-back. For example if you are in a highly regulated business.  Fast delivery of the services: Deliver the services before one day or one hour before customers think possible. Update your differentiation often by listening to changing customer needs. or free servicing. Q.3 What are the different stages in which organisations choose innovative operational methods? RANJAN PAL . however. Ans. Differentiation of service depends on the type of business. It also needs you to offer your service long before your competitors offer. let us now discuss about service differentiation strategies. Differentiate your service with reference to customer benefits.remains the same. Successful differentiation needs you to understand your customers and talk to them often. Choose a combination of differentiation methods that gives you a separate place in the market. Service Differentiation Strategies As we have learnt the various types of strategies used for positioning. and the possibilities around. 511110942 Page 4 . The following are some of the ways through which you can make customers feel good about your business: .  Before/during/after-sales support: Make sure to ensure that you will be there to support your customers in case of any issues with you service. your may have limited choices. Q.

Available for service: In this stage. The presence of customer in factory ensures that changes made to product will be visible to them. as part of its Strategies for attracting customers and delivering quality services. operations department become more outward looking and focus on benchmarking. Organisation seeks feedback from clients on costs and perceived quality of service. However. Achieving of competitiveness: In this stage. The dual roles played by customer as a provider. Managers of service firms should understand interactive nature of services and significance of consumer involvement in the production process. We already know that services marketing concentrate on selling services. gasoline was not part of the product offering. Customer had to learn the way in which a gas pump works. operations department attempts to avoid errors and reduce back office support in order to reduce costs. Involving customers reduces cost of R&D and increases probability of success. 3. Let us see the manner in which various service firms embrace operational Competitiveness in following four stages: 1. Journeyman: when operations department reach this stage. Advent of gasoline brought new challenges to customer. develop capabilities and generate opportunities. The back office must be proactive. Changes in service factory indicate changes in RANJAN PAL . They can implement their own innovative operational methods for delivering quality service. They also attempt to minimise technological investment and investment in training for front-line personals. Involvement of customer in production process Customers are an integral part of service process irrespective of whether their participation is active or passive. organisation will have to not only excel. The thought of purchasing gasoline from the place where food products were sold resisted manufacturers from going for it. 511110942 Page 5 . and use it as a key component in its competitive strategy. 4. At this specific point. a consumer during service delivery process also helps to prohibit companies from getting responses from customers in advance. the level of competitiveness would have increased. as well as. 2. For example. Customers will have a framework of themselves for services that are often used.Ans. service operations reach a point where organisation master service and realise complexity of changing such operations. This forced gas pump manufacturers and convenience store owners to build up gas pumps and monitor procedures for this self-service operation. Organisations will have to offer innovative operational methods. Customer involvement reduces risk and accelerates speed with which new products or services are developed. when convenience stores in US were opened initially. selling process and marketing approach for services can be tricky. The back office will be seen as valuable as front office personal and technology will be used to improve the quality of delivery process to customers. but also be fast and innovative. World class service delivery: To maintain high quality level of performance.

It makes use of prototyping to test results and process maps to implement solutions. website. Service design is a continuous process that works with components. it is difficult to communicate and describe service design. Service design agencies implement new tools and techniques in order to improve their existing services or to create new ones. there are four risks involved in describing services. New developments coming from customer and factory indicate a change in both factory and in customer. For example. generating ideas. As per experts. active involvement of customers stresses need for a proper design activity that systematizes interaction between them and employees of organisation. In short. blog. projects. telephone. It generates specifications. improve market acceptance. In services marketing. This also involves internal processing of queries/letters sent by customers and redesigning media used by customers to contact service provider. It uses different methods to explain and share complex structures and procedures. and material elements of a service to improve its quality and to facilitate interaction between service provider and customers. Involvement of customers implies that service design can be analysed not only from functional side. Service design adapts well to organisational requirements and can be converted into business structures and processes: It helps in unveiling opportunities. For example. First risk is over simplification as words would RANJAN PAL . inperson and so on. a restaurant might opt for a service design agency which asks them to change the way menu is written or room layout to attract more customers. Design of a service includes organising or re-organising the activities that are offered by service provider. There is an increase in their complexity if services are delivered after a long period. resolving problems and implementing productive solutions. Process is performed based on service users' insights. It is impossible to state the form and characteristics of an emotional value produced by the service. Service design has its own characteristics. These collected ideas are captured in sketches or in service prototypes. and also establish a long term relationship with customers. strategies. It is difficult to prescribe exact result of an interaction between customers and service providers. It is a multi-disciplinary field. it includes stating and constructing technically networked social practices. Challenges in service design: As services are intangible.consumer script. and workshops to integrate innovative service practices into organisation. Service design Service design is the process of arranging and organising persons. communication. This technique provides more insights into usability of a service and is more effective than surveys. . but also from emotional side. and guidelines. 511110942 Page 6 . In addition. it helps organisation to provide differential services compared to its competitors. Service design is used by many of public sector organisations as a method to change customer requirements with regard to service experience. Services are variable as employees deliver it to customers. infrastructure. It helps to innovate and improve existing services to make them useable and desirable for clients and effective for organisation.

and high. in a symphony concert. Figure : Various Risks in Explaining Services Q. Even in a simple service such as retail mail order. Services are actions that are produced and consumed at the same time. In medium level or moderate level of customer RANJAN PAL . the physical presence of the customer is required. For example.4 What are the various levels of customer satisfaction? How important is a plan or methodology to initiate customer responses? Ans. Following Figure explains various risks involved in explaining services. In low level of customer satisfaction. Third risk is subjectivity where a person describing services will be influenced by his or her own personal experiences with service. The role of the customer is important in the production and delivery of a service. This means employers or managers tend to omit service aspects. the employees of the firm will be doing all the production work. There are various levels of customer satisfaction and they are low. There are many cases when the employees and customers interact with each other to produce a successful product.become in adequate to describe a complex service system. 511110942 Page 7 . medium. Fourth risk is biased interpretation as word 'flexibility' or 'responsiveness' is likely to be misinterpreted by employees. Second risk is incompleteness. There are very less work for the symphony goers. customer's active participation will have a great impacton the service delivery. which are not familiarised.

The examples are marriage counselling and personal training centres. Every services organisation must have a well-written plan or methodology to ensure that customer response is initiated. HIGH Customer co-creates service product. each organization must have a clear distinction between the customers and consumers of its services and products. The inputs here. In these services. lack of active participation from the client will affect the successful delivery of the service. At all levels. and the client satisfaction. Lack of customer's participation makes it difficult to create the service. and suggestions are resolved in a quick and timely manner. the Active client participation guides the customized service. 511110942 Page 8 . means information. These services require high level of participation from the customer. there must be a customer response initiative to make sure that questions raised. Service is provided Provision of service need irrespective of any individual customer purchase purchase. problems. services quality. Customer response is very crucial as a profitable customer response strategy is very much valuable. In high level of customer satisfaction customers are the active participators in the creation of the service. delivery. but the service will be provided by the service organisation. Level of Client Expectations level of Client Expectations LOW MODERATE The presence of the customer Consumer inputs are required is required during service for creation of the service. Standardised products The inputs from client modify a standard service. essential to get adequate income. These are required to prepare the tax return of the client in an effective manner. issues. Customer Responses in Services Most organisations undervalue the importance of good customer response and the harmful effects of bad customer response. the effectiveness of the client satisfaction will make a positive impact on the organisational efficiency. Payment will be the only The inputs from the client are output in this case. Even if you provide the best RANJAN PAL . effort or physical possession. Before developing the customer response master plan. complaints. Irrespective of the people who consume the product. one should develop a good relationship with the customer. Table below explains the various levels of customer satisfaction across various services. the inputs of the customer are required in helping the organisation in creating the service.satisfaction. Irrespective of the size of the organisation. The inputs from the customer are essential and the outcome is co created with an active participation from the client.

else the policy normally expires without providing any benefits to the policy holder. Here the benefits are payable to the policy holder only after his/her death.  Develop a customer response service team: Those people who provide services are the most important aspects in customer satisfaction. The insurance provided to the customer can be categorised into two. For example. Page 9  RANJAN PAL . namely life insurance and non-life insurance. You can divide the teams into various functional areas such as hardware. The various types of Insurance policies that these companies provide are:  Term insurance: this insurance service is offered to customers who seek life insurance protection for selected number of years. Let us examine the framework used to produce a feasible customer response initiative:  Develop a customer response policy: This can be considered as a business plan to satisfy the customers. Marketing in Insurance Sector As we know insurance protects the financial well being of an individual. Life insurances are provided by Government agencies like LlC and private Agencies like Max New-York life insurances and so on. the response that you give to your customers determines your durability in the market. A well-planned customer initiative ensures the presence of someone. and services. Whole life insurance: this insurance service is offered to customers who seek life insurance protection during one's lifetime. The team members must be allowed to take the ownership and be creative. Ans. It should begin with a mission statement that summarise the objectives.5 Categorise the marketing mix in insurance sector & airline industry . Q. for resolving customer issues. The insurance companies provide various policies for the Personnel seeking these two types of insurance. Under this type of service the policy holder obtains all the benefits if he/she dies during the selected period. goals. 511110942 . software.service in the world. They must also be given adequate training in solving and dealing with the clients. There should always be a person in the centre to resolve the customer issues. Organisations can announce incentives and discounts for loyal customers.  Provide a customer response reward program: The organisations can increase the client loyalty by being pro-active. and procedures to improve the customer service experience  Develop a customer response centre: This is regarded as the infrastructure to carry on with the customer response policy. you will feel good when someone greets you once you walk into a store. company or an entity in case of unexpected loss.

The insurance companies hire representatives to convince the customer about their insurance offer and explain the benefits obtained from their policies. Banking services are inclined towards fulfilling the financial need of the customer whereas insurance marketing is inclined towards providing the assurance to the customer to come handy in time of adversity. Annuities: this insurance service is offered to customers who seek life insurance protection and agrees to pay the policy holder on a series of regular periodical payments for a fixed period of time or during someone's life time. you can get insurance for your mobile phone by paying some amount of money. 511110942 Page 10 . Companies like Baja Allianz. While purchasing an expensive phone. The key difference between the marketing of the banking and insurance services remain the orientation. Universal and many other shops also provide insurance for expensive mobile phones. which dominate the scene of involvement with the purpose of ensuring appropriate profits to the policy holder and to the company. They setup large customer services and follow analysis in a more planned way for directly marketing their products to the targeted customers. All elements within the control of the organisation. Many insurance companies are adopting the approach of the direct marketing for their products. which covers legal liabilities. To meet this competition each provider markets their policies and offers to meet the requirement of the customers. are used for the marketing. For example these days mobile sellers like Sangeetha. The marketing mix is used by the insurance companies in order to attract the majority of the customers. burglary and so on. They are also providing the online access and services to the customers for their convenience. These days there is competition among the various insurance providers in the market.  Endowment insurance: this insurance service is offered to customers who seek life insurance protection for selected number of years. and Liability insurance. you can claim your insurance amount. and Reliance General Insurance Ltd insurance offer non-life insurance or general services. In case you lose or misplace your phone. Tata AIG general insurance. when the customer requires the service most. They provide insurance services for property against fire. Companies are coming up with new offers and are applying more aggressive promotion. The insurance marketing focuses on their customers and develops the marketing strategies for their products. Insurance marketing involves marketing of policies and various features of those policies. It can be broadly divided into the following main categories: RANJAN PAL . personal insurance like accident and health insurance. which display the organisation's capabilities and image to customers or that influence customer satisfaction with the organisation's product and services. Here the insurance is paid out whether the policy holder lives or dies on maturity date of the term. Airlines marketing The Indian Aviation sector is one of the fastest growing aviation industries in the world. This is similar to insuring your car or vehicles.

most airlines provide online booking. Air Charters India. Ans. It should deliver what the company wants to deliver to its customer without any ambiguity.6 Define the elements of strategic management. So it is of paramount importance to maintain the brand value and put effort in the brand management. Mention the technical options in the service marketing. It differentiates the company and its services from the competitors. benchmarking. Branding: Branding plays an important role in the marketing of the company and its product or service. Q. Cargo service includes air transportation of cargo and mail. Kingfisher airlines. Non scheduled transport service includes charter operators and air taxi operators. Some companies like Kingfisher airways target the high-end users and provide them luxury facilities. Aryan Air.   For instance. Communication strategy: communicative strategies to' customers should be clear and with motive. and competitive analysis are the techniques used for the marketing planning so that the marketing can generate the desired results. For example Indian Airlines. They provide discounts and gifts for online booking. 511110942 Page 11 . Plan for entertainment offerings are also on track that includes having hi-tech shopping models for its customers during their flight. For example Pawan Hans. status check. Kingfisher flights also have on-demand multi-Channel video services. Golndigo airlines. Many airlines also offer accredited taxis enabling pickup-andreturn service. Marketing is done with some strategy developed by the organisation. Strategy defines the major decisions taken by the organisation to compete in RANJAN PAL . AirCargo Express. so the airlines are also getting online to attract maximum customers towards them. The reach of internet is very large and deep and as most of the banking services are online. Strategic Approach in Services Marketing In the previous unit we learnt how the various sectors market their services. For example QuickJet. So let's discuss the strategy part of the service marketing. The aviation sector is witnessing strong competition as the numbers of Operators are rising. Some companies like Golndigo and SpiceJet have targeted the budget travelers providing them cheap flying options.   Scheduled air transport service includes domestic and international flights. Online marketing: Online marketing is one of the premier marketing media for every organisation for its marketing needs. Marketing strategies employed by the aviation industry are:   Marketing planning: Marketing analysis.

present their services to customers and develop itself as a brand. All the policies of the organisation should be relevant to the business area of the organization. 511110942 .the market. Figure below provides a diagrammatic look of the major strategic decisions elements and shows the interrelationship between them. The policies are defined by keeping in touch with the external competitive environment. It is for the long term duration and helps the organisation to achieve' high growth. Page 12 RANJAN PAL . Figure : Elements of Strategic Management Major business decisions are strategic in nature and they mainly focus on the following points:  Business definition: The business definition defines the areas in which the organisation will compete.

As all the units work in mutual Cooperation with each other to achieve the goals. Core competency: The organisation offering services must keep track of current and the future market environment and competition. Consistency of approach: The consistency of the strategy should be maintained and must focus on the organisational growth. This process has major resource implications. 511110942 Page 13 . A well formed strategy can help in achieving greater level of performance goals and help in Building up a more profitable organisation.   Johnson and Scholes provided a model that summarises the elements of the strategic planning. The strategies of the organisation must exhibit the future perspective of the organisation. Integrity: The strategy planned by the organisation has far reaching effect on all the working areas of the organisation. The tactical activities may change to encounter the change in the competitive market but the strategic instructions should remain constant. Figure: Elements of Strategic Development RANJAN PAL . the whole organization view would help the managers to have better integrity between various units and generate a synergy among them. both in terms of resources and investments.

and capabilities of the organisation to deliver services. The strategy should exhibit the integrity.  Marketing of the strategic services should handle all the discussed topics effectively so that the organisation could get the benefit of the resources that it poses and develop the competitive edge. the culture and the expectations of the stake holders. In an emerging economic power like India. Different organisations are trying different strategies to find out the answers to these new emerging issues. Marketing of the strategic services should be done with the proper market mix and some physical elements should be added to the services to override the intangible nature of the services. Approach like telemarketing helps companies to target customers individually and provide the desired service. While implementing the strategy. Even customers can directly reach the service providers and seek service. stakeholders. Strategic implementation: The implementation of the chosen strategy is very important. service sector has seen high growth rates in past couple of decades. The organisational structure and design should also be considered while implementing. strategic planning. Service providers are forced to come up with new and different ideas so as to remain in market and maintain their market share. 511110942 Page 14 . It can generate good sales figure if telemarketing is done effectively. INNOVATION AREAS: We are familiar with the fact that services sector plays an important role in the economic development of the country. The development in the technology has also boosted this trend of using new and innovative ideas in the service sector. Brief descriptions of the three stages are as follows:   Strategic analysis: This analysis is followed to generate detail information about the environment of the organisation. resources. The new emerging issues in the service marketing also affect the market.The figure above shows three main stages about the strategy: strategic analysis. This would help us to decide as which level would receive the changes first and where resource planning should be done to ensure proper implementation of the strategy. focus on the competitive market and also consider the long term effect on the organisation. but also in the rural RANJAN PAL . it becomes very important to be aware of the new and emerging trends in the service marketing. Strategic choice: after all the details have been studied. Innovative marketing strategies for services are required not only in urban and global marketing. This has also caused several new competitors coming into the market. as implementation remains the most crucial element among for the success or failure of the strategy. e-Commerce and e-marketing are the trends that started as the effect of technological development and need of new marketing strategy in the service sector and helps the organizations to reach the technologically aware public and provides them the ability to search the potential customers. In country like India where services contribute to more than 50% to the GDP. The strategy that closely represents the overall business objective of the organisation and provides the competitive edge on the competitors must be chosen. and strategic implementation. the best strategy is chosen. which led to the demand for marketing. the management of the strategic change should be handled effectively. making it more cost effective than the traditional approaches.

It also tells how you can handle and develop a new perspective toward these issues. But the service marketing strategies in rural market differ from the global market. Objectives: After studying this unit. This unit will provide the description about the various service marketing you should be able to:  describe strategic service marketing  classify service marketing in e-Marketing and e-Commerce  define telemarketing services  evaluate service marketing research in global and rural markets  identify innovations in service marketing  assess ethical aspect in service marketing RANJAN PAL . 511110942 Page 15 . It also discusses the ethical aspect that must be followed by personnel while delivering a service. an overview about the global and rural market. In context to Indian economy. rural market provides great potential for the organisation in order to utilize them. Working on these issues are must for the service sector organisations. This unit presents and makes you aware of the various new issues emerging in the service marketing sector. so that they can maintain their competitive edge over their competitors.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.