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€ Services

dominate70% of the aggregate production and employment in OECD nations € Generate new markets € Reshape existing one € Innovation in service- process, product and markets € Most innovations are incremental or radical

Ebay($ 60 billion) .€ Market creating service innovation promises far greater upside potential than incremental € Ex ² Enterprise Rent A Car Company($8billion). google($110 billion).

The degree of service ´separability.€ Service innovations that create new markets differ from each other along two primary dimensions: 1. Cirque du Soleil. € Doctors and nurses can advise patients via privacy-protected e-mail or voice mail and can monitor patients· health through telemedicine. The type of benefit offered ƒ 2. the University of Phoenix Inc. € Online booking € .µ ƒ For example. € Technology has transformed innovation € The delivery of ´separableµ care is growing.

Spice jet b. FLEXIBLE SOLUTIONS a. COMFORTABLE GAINS a. CONTROLLABLE CONVENIENCE a. CNN 2. Barnes and Nobles 4. Southwest Airlines Inseparable Core Type of benefit Delivery . Google b. Federal express b.Separable 1. Skype Type of service 3. RESPECTFUL ACCESS a. eBay c. Cafe coffee day b.

€ This cell describes service innovations that offer a new core benefit and that can be consumed apart from where and when they are produced. € These . innovations allow their users to break free of the constraints of time and place.

€ New market creation based on New Delivery Separable Service .g Google didn¶t invent the core benefit of providing information available relevant and rapid Web search for information on any subject two innovation that positioned Google for dominance € Google € Made € The . E.

whereas competitors operated on looking for keywords and tallying their frequency -Linked computers instead of using large server configuration to make search quick ‡ Hence they reshaped the world of internet searching ‡ Other example: Skype technologies ± offer free calling between Skype members over internet ‡ Thus offering benefits of global telecom munication .-Developed search algorithms.

€ Example € Before Starbucks came in. both quality of coffee and customer experience were inconsistent improved experience to coffee lovers by € Offered .€ Service innovation that offers ² core benefit consumed at the time and place of production : Starbucks corp.

Brewed coffee of uniform quality -emphasizing on relaxing atmosphere (tables are spaced apart) Other examples: Barnes and Noble Large stocks of books on array of topics and easy chairs .

² Drugstore chain € Example € Stores are easy to get to and easy to get through .€ Service innovation through new delivery benefit and production consumption of services are inseparable ² Walgreen co.

low shelves. excellent in store signage and automated queuing of prescriptions . drive through pharmacy windows.‡ Innovation geared to shoppers who place premium on saving time and effort ‡Free standing stores that are easy to access ‡ Ample parking.


A Scalable business model ³Business Model Innovation improves margins´ € Be capital intensive customers to perform more themselves people intensive ² hard to check productivity separable version of service € Encourage € Reducing € Create .

Comprehensive customer experience management Identifying the clues € Functional clues : technical quality of offering Mechanical clues : non human elements € € Human clues : behavior and appearance of employees A total experience is the convergence of theses three clues .

Investment in employee performance The more important. the more pronounced the human effect Where to invest ?? € € € € € Initial hiring Ongoing training & education Information sharing Performance based compensation Internal branding (reinforcing brand image to employees) . personal and enduring the service.

performing core service liability and finding ways to connect with customers emotionally .Continues operational innovations Service businesses are operations-intensive Continuous innovation makes it difficult to imitate and it improves operations and ca become a core competence Brand differentiation ‡ A trusted brand reduces perceived risk ‡ Communicating consistent message.

An innovation champion € Imagine the possibilities embedded in an idea € Lead the transformation of idea into market reality A superior customer benefit ‡ Clear better solution for customer problem and to stimulate customers try the product or service .

e.Affordability € € Cost. to change consumer behavior but also have the means to do so Continuous strategic innovation ‡ Strategic innovation and integral part of service business .structure innovation is very important i.