New Service Development Essay

Topics: New product development, Customer, Service Pages: 3 (993 words) Published: October 14, 2012
New Service Development (NSD) Essay
The difference between the new product development process (NPD) and the new service development process (NSD) is the involvement of customers in services. A service is an intangible good that relies and focuses heavily on customer involvement and experience. Four main characteristics of services outlined by Alam & Perry (2002) are intangibility, heterogeneity, perishability and inseparability and it is because of these characteristics that the NSD and NPD process differ.

Whilst extensive research has been carried out in the area of NPD, little attention has been paid to the specifics of NSD. Three key issues have been outlined by Alam and Perry (2002). The first issue is that little effort has been made to propose NSD models. Only two linear NSD models have been proposed however neither address important stages such as the development of the cross-functional team or parallel processing which leads to cycle time reduction. Secondly there is limited knowledge of the nature of the NSD stages in service firms and how they are to be managed. Finally Alam and Perry highlighted that many firms don’t realise the importance of the customer because they do not obtain information or involve them in their NSD process.

The role of the customer in a service is the most crucial. Unlike a mass produced product, a service is an experience, which involves a heterogenic interaction between the customer and the service provider. A service is more flexible than a product and able to meet the changing needs of the customer more quickly. In order to be successful, services need to meet the customers’ individual needs hopefully leaving a positive impression on the customer. Services are continually evaluated by the customer, with the customer evaluating the sum of its parts; if one area performs poorly, then the whole service results in a low evaluation. This is why feedback at every stage of the service is essential. Feedback allows the...
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