SESSION 7 & 8

New Service Development

By

Agenda
Levels of Service Innovation
New Service Development Process Service Design Elements

Dr. Nripendra Singh

Jaypee Business School, Noida

Case Study: 100 Yen Sushi House & Commuter Cleaning

New Service Development

Case: Taco Bell Corporation Taco Bell is a fast food restaurant chain serving Mexican food that is formulated to appeal to the American general public. As of 1991, the company had gone through a remarkable transformation and was hailed by the press and industry experts as having revolutionized the fast food world. The new delivery process, referred to as K-minus (kitchen moved out of the restaurant to a central facility), illustrates the design strategy of separating physically the front-and back-office operations. Case: Alaska Airlines Alaska Airlines, serving west coast cities from Prudhoe Bay, Alaska, to Puerto Vallarta, Mexico, has won awards for providing outstanding customer service. Faced with price competition from Southwest Airlines, Alaska is introducing frontline technology and customer self-service options to improve productivity and reduce costs. Case: Commuter Cleaning Dry cleaning service for individuals with careers that make it difficult for them to find time to go to traditional dry cleaners.

Case: Caruso's Pizza Caruso's Pizza is a small, entrepreneurial restaurant chain. Its owner is considering an experimental pizza delivery system (called "express delivery") that involves a major process innovation, producing pizzas to inventory and storing them on trucks equipped with ovens. The system promises faster delivery of higher-quality pizza, but, as yet, is an unproven technology. At the same time a computerized one-phone-number order entry system is under consideration. Case: 100 Yen Sushi House Sushi is the most popular snack in Japan. It is an ultimate showcase of Japanese productivity. The house features an ellipsoid shaped serving area in the middle of the room, where inside three or four cooks were busily preparing sushi. 30 stools surround the serving area. JIT inventory control system, live fishes and octopus. Workers and their equipments are positioned very close. Uniqueness is in the conveyor belt with a train of plates of sushi carrying all types of sushis, each plate for 100 yen.

Levels of Service Innovation

New Service Category Major Innovation Description Radical Innovations New services for markets as yet undefined. These Wells Fargo innovations are usually driven by information and Internet banking computer based tech. New services in a market that is already served by existing services. Mondex Master Card-cards for retail transactions Examples

Start-up business New Services for the market presently served

New service offerings to existing customers of an Bikanerwala Kiosk in Big Bazzarorganisation (it may be available by other cos.) Shipra Mall Incremental Innovations

Service Line Extensions Augmentations of the existing service line such Singapore Airlines first-class airport as adding new menu items check-in in a special, exclusive lounge. Service improvements Changes in features of services that Delta Airlines use of ATM-like kiosks are currently being offered. to distribute boarding passes Style Changes Modest form of visible changes that have impact Funeral Home at Lucknow, on customer perceptions, emotions, and Haldiram Sweets attitudes.

New Service Development (NSD Cycle)Process

Planning Phase = Development + Analysis Execution Phase = Design + Launch Enablers: Teams, Tools, Organisational Context. Service Product: People, Systems, Technology.

1) Development Formulation of New Services Objective / Strategy Idea generation and screening Concept development and testing 2) Analysis Business Analysis Project Authorization

New Service Development (Cycle)Process

Planning Phase = Development + Analysis Execution Phase = Design + Launch 3) Design Service design and testing Process and system design and testing Marketing program design and testing Personnel training Service testing and pilot run Test marketing 4) Full Launch Full-scale launch Post-launch review

Service Design Elements

Just like architect design in mind, but draws on paper with details like foundation, structure, plumbing and electrical. Service design elements become a blueprint to communicate employees and customers alike. Structural Elements & Managerial Elements: (Arvind Eye Hospital Case) Structural Elements
1.Delivery system (Front & Back office, automation, customer participation) 2.Facility Design (Size, aesthetics, layout) 3.Location (demographics, single or multiple sites) 4.Capacity planning (queues, no. of servers, demand)

Service Design Elements

Managerial Elements: 1. Service Encounter (culture, motivation, training, empowerment) 2. Quality (measurement, expectation vs perception) 3. Managing Capacity and Demand (ste. For altering demand and controlling supply) 4. Information (competitive resource, data collection)

Case Study
100 Yen Sushi House

THANKS