NEW SERVICE DEVELOPMENT

New service development relies on the complex task of understanding and anticipating latent
customer needs. To facilitate proactive learning about the customer, recent findings stress
customer involvement in the development process and observations of customers in real action.
The experiment reveals that the consumers service ideas are found to be more innovative, in
terms of originality and user value, than those of professional service developers.
Ideas for new service innovations can originate from many sources. Customers can offer
suggestions (e.g., menu additions at a restaurant). Frontline employees can be trained to listen to
customers’ concerns (i.e., listening posts). Customer databases can be mined for possible service
extensions (e.g., additional financial services). Trends in customer demographics can suggest new
services (e.g., long-term health care) and new advances in technology.
Stages of new service development

1. Concept/ideation
2. Feasibility study and design planning
3. Design and development
4. Testing & verification
5. Validation & collateral production
6. Manufacture/launch
7. Improvement
NSD CYCLE