Distinguishing between service design, and service

Service design as a construct has been somewhat vaguely used in the literature. Some researchers use term service design whereas some researchers talk about service develop-ment, or NSD, or service innovation although they might refer to the same topic. In this regard, I use the opportunity to contribute to this discussion by attempting to distinguish between these four concepts.

As to service design, it, according to ISO 9004-2 standard (1991, 9), refers to “speci-fication of service and its delivery” (see also Fitzsimmons and Fitzsimmons 2006, 81).

On the other hand, service design is defined to cover the whole development of service process from idea generation to concrete specification (e.g. Zeithaml et al. 1990; Martin and Horne 1993; Zeithaml and Bitner 2006). However, more acknowledged is the insight that service design is narrower construct than service development. In fact, there is some-what general agreement of determining service design as part of service development (or NSD) process (e.g. Sceuing and Johnson 1989; Johnson, Menor, Roth, and Chase, 2000;

Edvardsson, Gustafson, Johnson, and Sandén 2000). Johnson et al. (2000, 5) distinguish between service design and NSD by noting that service design determines a detailed struc-ture, infrastrucstruc-ture, and integration content of a service operations strategy (e.g. Roth and Jackson, 1995; Roth and van der Velde, 1992), whereas NSD refers to “the overall process of developing new service offerings”.

In this regard, service development, as well as NSD, are perceived to cover the whole de-velopment process of (new) service(s) (e.g. Cooper, Easingwood, Edgett, Kleinschmidt, and Storey 1994; Sundbo 1998). Further, earlier studies have proposed that as an end result of service development process a service provider, instead of offering services per se, offers its customers prerequisites for a service through which the actual service is realized for the customers in a form of the phases of service process as well as resources involved in the process (e.g. Edvardsson and Olsson 1996, 148-148; Edvardsson et al. 2000, 920). This in-sight is followed also in this study since the characteristics of service environment, and thereby prerequisites for a service in turn, are of the particular interest.

In the extant literature on NSD researchers have identified some common character-istics of the phenomenon. As already mentioned, NSD is seen to include service design.

Further, earlier research agrees about the process-based nature of NSD (e.g. Scheuing and Johnson 1989; Tax and Stuart 1997, Johne and Storey 1998). In addition, it has been suggested that NSD process is cyclical. Johnson et al. (2000, 18) have suggested an NSD model that describes the holistic, process-based (cyclical) nature of NSD with the empha-sis on (tangible) product design from the operations management perspective. However, the model of Johnson et al. (2000) is also generally acknowledged and referred in service management literature (see e.g. Tax and Stuart 1997, Menor et al. 2002; Fitzsimmons and Fitzsimmons 2006), too. Menor, Tatikonda, and Sampson (2002, 141) have slightly adapted the model of Johnson et al. to be conceptually better suited to service context (Figure 6).

The difference between service design and NSD (and service development) has already been established. Next, one could ask: “what is the difference between service development and NSD”? Actually, this is not an easy question. I have read many, and again many, articles concerning the topic, and I have come to a conclusion that, depending on a researcher,

ser-vice development and NSD, more or less, mean the same thing. For instance, recent research by Lidén and Sandén (2004) on service guarantees and service development, although us-ing a construct “service development”, still refers to models and studies by researchers who use the construct “NSD” in their own reports (e.g. Scheuing and Johnson 1989; Martin and Horne 1993; Johne and Storey 1998).

Futher, as Lovelock (1984, 44), although referring to the field of (service) marketing, has pointed out already more than twenty years ago, the word “new” is one of the most overused terms. However, as it has been suggested in the recent literature on service de-sign, NSD is the most recent of the terms describing how (new) services are designed ei-ther from customer’s or service provider’s view point (Goldstein, Johnston, Duffy, and Rao 2002, 122), and therefore, particularly extensively used. In this regard, I shall suggest that from a conceptual point of view service development and NSD are indicating the same phenomenon, and thereby, could be used interchangeably.

In order to consider the outcome of NSD process, earlier research has suggested classi-fication models for new services. Lovelock (1984), following the insights of Heany (1983) within the field of product development research, has originally introduced a classifica-tion model for new services. It posits on distinguishing developed new services into dif-ferent levels according to their extent of change (Table 1). This model is widely acknowl-edged and cited in service literature (see e.g. Zeithaml and Bitner 1996; Menor et al. 2002;

Fitzsimmons and Fitzsimmons 2006).

TABLE 1. CLASSIFICATION OF NEW SERVICES (ADAPTED FROMMENOR ET AL. 2002, 138) New service category Description

Radical innovation

Major innovation New services for the markets as yet undefined; usually driven by information and computer-based technologies

Start-up business New services in a market that is already served by existing services New services for

the market presently served

New service offerings to existing customers of an organization (although the services may be avaliable from other competitors)

Incremental innovations Service line

extensions

Augmentations of the existing service line such as adding new menu items, new routes, and new courses

Service improvements Changes in features of services that currently are being offered Style changes Modest forms of visible changes that have an impact on customer

perceptions, emotions, and attitudes, with style changes that do not change the service fundamentally, only its appearance

All in all, referring to the discussion above, I have got an impression that service develop-ment and NSD as constructs more or less refer to creating something totally new. Thus, I suggest that service development and NSD are more referring to radical innovations than incremental innovations discussed in the Table 1. However, it is essential to be noted that improving (i.e. developing) the characteristics of service does not always have to be con-ducted through creating something totally new. As Berry and Lampo (2000, 265) point out, service firms can also be innovative by redesigning the existing service (and its character-istics). In this regard, I suggest that the levels of innovation characterized as “incremental innovations” can, on the other hand, be considered as outcomes of service redesign. In this study, the insights of Berry and Lampo are preferred since they are more appropriate for the purposes of the study (i.e. investigating the design of a customer-friendly electronic service environment in the context of complex services, such as insurance).

As the discussion above indicates, term service innovation is also often mentioned in the context of service design and service development (see e.g. Sundbo, 1997; Sundbo, 2001; Barras, 1986; Gallouj and Weinstein, 1997). Similarly as in case of other related constructs, it is essential to determine what is meant by “service innovation”, and thereby, make a distinction to the other constructs in question. Menor et al. (2002, 139) state that when comparing service development to service innovation as a construct, the former re-fers more to operative and tactical side of service development whereas service innovation describes long-term strategic view on offering new services. Since the focus of this study

is not on strategic management the long-term approach is not considered here. Thus, the term service innovation is not discussed in this study.