The PDMA Handbook of New Product Development

7.2. How Service Development Is Different

NOTE

The lack of understanding surrounding the word "services" leads to misfocused and inefficient new service efforts.

Despite its pervasive use in today's business lexicon, the word "service" is widely misunderstood. What exactly constitutes a service? What is unique about a service compared to a product? What is the relationship between services and products? Since the answers to these questions remain unclear to much of the business world, the majority of service development efforts are misfocused and inefficient. Understanding what differentiates services and makes them unique is the first step in enhancing new service development.

The four unique-to-service qualities that help to define the word "service" are summed up in the four "I's": Individualized, Intangible, Instantaneous, and Inseparable.

1. Services are individualized to a given customer.

2. Services are intangible.

3. Customer reaction and evaluation is instantaneous.

4. Services can only be thought of as a holistic sum of their parts—they are inseparable.

Founded in 2000 on the premise of offering a superior customer experience, JetBlue Airways has quickly established itself as the premier airline service provider in the nation. They are a case study example of a service company that intimately understands the four "I's" of service development, and they have reaped the rewards. JetBlue was named the best domestic airline and best value-for-cost airline by Conde Nast Traveler in 2002 ...