Group Study Case:
Service Innovation by Ali SEKBAN
Mithat PERKÖZ
Yasin Galip GENCER

submitted to

Assoc. Prof. Arzu İşeri SAY

April 7, 2011

SERVICE INNOVATION

In today’s business world, services and service industry has a great importance. Yet, it would be a mistake to attribute “service” concept only to service industry. Manufacturing firms need many services to deliver their goods to customers. Therefore, in recent years, services have become an important issue for them too. In this article, we will consider service innovations especially in terms of manufacturing firms and present a review about the issue. In the introduction section, we’ll give the definition of service and explain its importance in details. Then, as the main purpose of this review article, we’ll go into service innovations.

Introduction

There are lots of definitions for service concept. Among these, the followings are remarkable: “A Service is a product which is a process” (Shostack 1987), “Services are processes involving customer contact’ (Chase 1978)”. In other words, service is a product; however it is different from the product in the traditional sense. In general, there is a common distinction for service: “1- functional services: services offered by investment goods companies and service companies, 2- institutional services: services offered solely by services companies”.
With regard to properties of services, the most important ones are the followings;
“1- Intangibility - They cannot be seen, handled, smelled, etc.
2- Perishability - Unsold service time is ‘lost’, that is, it cannot be regained.
3- Lack of transportability - Services tend to be consumed at the point of ‘production’
4- Lack of homogeneity - Services are typically modified for each client or each new situation.
5- Labour intensity - Services usually involve considerable human activity,