Learning Objectives
       Discuss the new service development process.
       Prepare a blueprint for a service operation.
       Describe a service process using the dimensions of divergence and 
        complexity.
       Use the taxonomy of service processes to classify a service 
        operation.
       Compare and contrast the generic approaches to service system 
        design.
       Place an example of service automation in it proper category.
       Discuss the managerial issues associated with the adoption of new 
        technology. 
    Customer Benefit Package
       Hierarchy     Element      Core Good     Core Service 
         Level                     Example        Example
      Category      Business     Custom         Business hotel
                                 clothier        
      First         Core         Business       Room for 
                                 suits          the night
                                                 
      Second        Peripheral   Garment        Bath robe
                    Good         bag             
                    Peripheral   Deferred       In house 
                    Service      payment        restaurant
                                 plans
      Third         Variant      Coffee         Airport 
                                 lounge         shuttle 
  
   Levels of Service Innovation
                   Radical Innovations
       Major Innovation: new service driven by information and computer 
        based technology
       Start-up Business: new service for existing market
       New Services for the Market Presently Served: new services to 
        customers of an organization
                  Incremental Innovations
       Service Line Extensions: augmentation of existing service line (e.g. 
        new menu items)
       Service Improvements: changes in features of currently offered 
        service
       Style Changes: modest visible changes in appearances
    Technology-Driven Service 
    Innovations
         Source of           Service Example            Service Industry Impact
        Technology
     Power/energy        Jet aircraft               International flight is feasible
                         Nuclear energy             Less dependence on fossil fuel
     Facility design     Hotel atrium               Feeling of grandeur/spaciousness
                         Enclosed sports stadium    Year-around use
     Materials           Photochromic glass         Energy conservation
                         Synthetic engine oil       Fewer oil changes
     Methods             Just-in-time (JIT)         Reduce supply-chain inventories
                         Six Sigma                  Institutionalize quality effort
     Information         E-commerce                 Increase market to world-wide
                         Satellite TV               Alternative to cable TV 
                                                                                       3-5
    Challenges for Service 
    Innovation
          Ability to protect intellectual and property 
            technologies
          Incremental nature of innovation
          Degree of integration required
          Ability to build prototypes or conduct tests 
            in a controlled environment
                                                                      3-6