New Services Development

(NSD).

Lecture 5, Prof Pradeep Pai

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 Impressive New Services
Development - NGO

https://www.npr.org/blogs/parallels/2014/06/17/323026150/indias-transgender-
community-turns-seat-belt-safety-into-video-hit

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About Seatbelt Crew
 Seatbelt Crew is a public service initiative video by VithU and
O&M Mumbai to encourage the use of seatbelts, where a group
of hijras dressed as plane cabin crew enact the message.
 Uploaded on May 5, 2014
 The hijra community in India, unlike in any other part of the
world, is a much worshipped community. Newly weds and
parents of new borns often seek their blessings for an
auspicious beginning, as they are considered ‘sacred’ and also
quite feared at times. But despite that, they have no source of
employment and often resort to begging at traffic signals in
return for blessings. A majority of them are hence considered a
nuisance, especially when they come clapping their hands at
traffic signals.
 The public service initiative also helps showcase the transgender
community as contributing members of the society, unlike the
notion that they only beg and create a nuisance to the society.

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Stages in Services Vision

Target
Unmet Operating Service
Market
Need Strategy Concept
Segment

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 NSD few pointers
 Focus on customers & satisfying their needs, especially
due to
 low entry barriers,

 no economies of scale,

 erratic sales fluctuations,

 easy products substitution &

 limited opportunities for Economies of scale.

 SWOT Analysis & Porter’s Five Forces Model to be

applied in developing a strategy.
 Services Product innovation is driven by an appreciation
of changing demographics and lifestyles.
 The purpose & place of a service begins with
entrepreneur’s idea & unmet user need. 5
Strategic Analysis, Porter’s 5 Forces

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 Competitive Strategies
 Overall Cost Leadership – requires efficient scale facilities, tight cost
controls, overhead control and innovative technology.
 Seeking out Low cost customers.

 Standardizing a custom service, Form 16 or IT returns.

 Reducing the personnel element, Ginger Hotels, ATM’s

 Reducing Network Cost, Federal Express HUB & Spoke.

 Taking Services Operations offline.

 Differentiation – Unique services impression

 Making the intangible, tangible.
 Customizing the standard product, Burger King’s made to order.
 Attention to Personal training.
 Reduced perceived risks (Avoid lack of information, e.g. auto
repair)
 Quality Control.
 FOCUS, servicing a particular target market (only) well 8
 Winning Customers in Market – “What
do customers of Services actually
want?”
 Availability – Accessibility of service.
 Convenience – Location
 Dependability – Reliability
 Personalization – Repeat customers greeted by
their name.
 Price – Not very effective in services though.
 Reputation – Ensuring positive Word of Mouth
 Safety – Airline operations
 Speed – “How long must I wait for Services?”
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Service Purchase Decision is
based on,
 Qualifiers – Service firm must attain a certain level of
competitive dimension to be considered seriously in
the market. Airworthiness of aircrafts, pilot training
for an airline.
 Service winners – Lunch on convenience basis (least
time) but dinner on basis of reputation (most time).
 Service Losers – Loss of a customer due to service
being left wanted.

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How to CREATE barriers in Services
 Although there are very low barriers in
services barriers can still be created,
 Reservation Systems – available only to
approved sales intermediaries.
 Frequent Users Club
 Increased switching costs
 Technology support in managing
inventories & in yield management.

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Features of New Service Development.
 Designing a service delivery system is a creative
process, which begins with a service concept and more
importantly features to differentiate from competitors.
 Typical issues in Designing a new service,
 Location
 Facility Design and layout (Customers & work)
 Procedures & job definitions.
 Extent of customer involvement
 Equipment selection
 Adequate service capacity
 Innovative service system design of Frederick Smith’s
Federal Express, guaranteed overnight airfreight
delivery. Hub & Spoke model. (The project received a
grade C when it was first postulated by Smith in
college)
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In conclusion “Phases in NSD”.
 Planning phase having development &
analysis.
 Execution phase having design & launch.
 Radical Innovations different from incremental
innovations and are driven by information and
computer based technologies.
 In Services aim for radical innovations.
 Service system elements,
 Structural – Delivery mechanism, facility design,
location & capacity planning.
 Managerial – Service encounter, Quality, managing
capacity and demand, Information.
 Services Blueprinting is similar to design
blueprints which captures ideas on paper and
avoids costly trial and error losses. 13
Case Cirque Du Soleil

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 Some More Videos
1. Bharati Axa

http://www.youtube.com/watch?v=UBK_sihTyrE

2. Bharati Axa

http://www.youtube.com/watch?v=WeZiLqsuaso

3. Vodafone

http://www.youtube.com/watch?v=bNz3sbZDFv4

4. LIC Corporate

http://www.youtube.com/watch?v=W4ukEfbk3_4

5. Seatbelt Crew

https://www.npr.org/blogs/parallels/2014/06/17/323026150/indias-transgender-
community-turns-seat-belt-safety-into-video-hit

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Group Assignment 2
 Using the learnings from New Services
Development process, develop new
service for which there is an unmet
need.

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