Service Innovation and Management

Service Innovation and Management

DOI: 10.4018/978-1-4666-2512-9.ch014
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The purpose of this chapter is to explain the basic principles, theories, process, and management of service innovation. The authors first review the basic set of customer-centric principles of service innovation. Next, the authors review the theories behind service innovation typology. The following sections focus on the service innovation process, new service development, service engineering, customer participation, and lifecycle management. Then the authors select a couple of case examples from the literature to illustrate how the interrelated core concepts of knowledge, dynamic capabilities, and service innovation that have been covered in the previous and current chapters are utilized in different types of firms.
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Service Innovation: Basic Principles

Service is customer centered. Likewise, service innovation must focus on the customer, not the service solution. Grawe et al. (2009, p. 284) posit that service innovation is linked to the creation of customer value. Bettencourt (2010, p. 1) argues “the best guide to discovering service innovation opportunities is knowing how customers define value and the types of customer needs that can direct meaningful service innovation.” He proposes four fundamental “truths” related to customer needs that provide a basis for the systematic discovery of opportunities for unique and valuable service innovations. They are (Bettencourt, 2010, p. 1-7):

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