Service Innovation Essay

Furseth, Cuthberson, and Reynolds (n.d.) define service innovation as an activity where known products, services or process are combined or created in a new way, to generate a positive net present value from a market. The innovation is to combine known solutions, or create new service, processes, or business models, and either sell these on a market or employ them for internal increased value. In the end, the purpose of service innovation is to give customers a better experience or higher value for the specific service. Through the article “Creating New Markets through Service Innovation”, Berry, Shankar, Parish, Cadwallader, and Dotzel presented some key issues to the readers and why it is important for the study of marketing strategy.

As a result, the importance of service outgrew the importance of goods, which is why companies should be constantly seeking for ways to provide better services. However, most businesses only make incremental improvements to their existing service activities. Even though these improvements are important to keep the businesses going, the rate of returns is only limited to their existing services. Only a small percentage of businesses innovate a service that creates new market demands or reshapes the existing market which the company could reap big benefits from the new innovation. Service innovation promises greater long-term potential benefits than imitative or incrementally improved service offerings. Google did not invent the core benefit of providing information, but its market-creating service innovation is the availability of relevant and rapid Web searches for information on almost any subject (Berry et.al., 2006). As a result of its important innovation, Google leads the search engine market in the world and it is still hard for competitors to outgrow

Leadership role is also important during this phase. Dr. Martinette mentioned on his class lecture that giving services to everyone is impossible; therefore it is acceptable to pick a market niche and put the best efforts to serve those customers. By thinking about a service in terms of its core benefits and the separability of its use from its production, managers can easily determine how to out innovate their competitors. Creating long lasting relationship with customers and sustain the company for years to come are the essential things that businesses need to focus on.

Works Cited

Berry, L.L., Shankar, V., Parish, J.T., Cadwallader, S., Dotzel, T., (2006). Creating new markets through service innovation. MIT Sloan Management Review, 47(2), 56-63.

Cravens, D.W., Piercy, N.F. (2009). Strategic Marketing. New York, NY: McGraw-Hill.

Furseth, P.I., Cuthberston, R., Reynolds, J., (n.d.). The value dynamics of service innovation. Retrieved from www.reser.net/file/94574/

Sager, I., Burrows, P., Reinhardt, A., (2008, May 25). Back to the future at apple. Bloomberg Businessweek. Retrieved from