Identify the factors influencing ethical behavior Services are notoriously difficult to define. One jocular definition is that they are 'the fruits of economic activity that you cannot drop on your foot' (Pennant-Rea and Emmott, 1983). The act of dropping things on feet, or indeed on other things, could however be a service! Service innovations can involve the introduction of new services (with all, or most, of the characteristics outlined above) which can be provided for the client (without their active involvement), or which can be provided with the client being actively involved in the execution of the service.

1. CHAPTER 30
SERVICES,
INNOVATION, AND MANAGING
SERVICE
INNOVATION
BRUCE S. TETHER
2023

2. Introduction
01

3. • Innovation management comprises the
strategies and practices that decision-
makers use to achieve organizational bene-
fits from innovation, which is here defined
as the commercial exploitation of new
ideas, and includes both the introduction of
'radically new services' and, more
commonly, the incremental improvement of
existing services (Avlonitis et al, 2001;
Alam, 2006b).

4. • Service businesses, meanwhile, can intro-
duce 'product innovations'. McDonald's is
a prime example, where a service has
essen- tially been turned into a product
(or suite of products), and with great
success (Levitt, 1976). Many other service
organizations, such as retail banks,
essentially provide products, albeit
intangible products, rather than true
services (Hill, 1999; Avlonitis et al., 2001).

5. WHAT ARE SERVICES?
Services are notoriously difficult to
define. One jocular definition is that
they are 'the fruits of economic
activity that you cannot drop on your
foot' (Pennant-Rea and Emmott, 1983).
The act of dropping things on feet, or
indeed on other things, could however
be a service!
1
Services are often derided as being
menial, but paradoxically they also
contain the most knowledge intensive
of all activities, including surgery,
higher education, and consulting of
various forms. The same word 'service'
relates to both the 'best' and the 'worst'
jobs in advanced economies, or both
the 'top' and the 'bottom' of the
knowledge economy.
2

6. • This is one of the reasons why many service
providers seek to innovate by 'productizing'
their service (e.g. by selling recordings of
the orchestra playing-i.e. creating tangible
products), by shifting activities from them-
selves to the customer (i.e. self-servicing),
or by cutting back on the 'service elements'
of their offer (e.g. less frequent mail
deliveries; or employing fewer people to
help guests at a hotel).

7. 'True' or 'classic' services are considered to
have four characteristics that distinguish them
from physical products, or goods, some- times
captured by the acronym: IHIP (Sasser, Olson,
and Wyckoff, 1978; Johne and Storey, 1998):
• First, intangibility, or immateriality. This
means the service cannot be touched, seen,
tasted, or heard.

8. • Second, inseparability between what is pro-
vided and who is providing it.
• Third, services are temporal and perishable:
they exist in time. This property partially
follows from their inseparability. Because
outputs have no independent existence they
cannot be stocked as physical products can be
stocked.

9. • Fourth, because services are enacted, they
are often variable or heterogeneous.
Whereas with classic manufacturing the aim is
to first design and then produce in volume
such that each individual product is identical
(and therefore the client is indifferent to which
particular item he buys).

10. FORMS OF SERVICE
INNOVATION
02

11. • Service innovations can involve the
introduction of new services (with all, or
most, of the characteristics outlined above)
which can be provided for the client
(without their active involvement), or which
can be provided with the client being
actively involved in the execution of the
service.

12. • Increasing tangibility:
Although the essence
of a service may
remain intangible,
one form of
innovation involves
increasing the
tangible, or material
aspects of the service
experience.

13. • Addressing
inseparability:
Because a service is
inherently tied to the
entity that provides it,
there are two basic
ways to innovate with
respect to this
characteristic.

14. • Addressing temporality: Services are
typically demanded in time and space, and
innovation can relate to breaking both these
constraints. For example, 'out of hours', or
'extended hours' services make services
available outside of normal working hours,
often through developing different
organizational arrangements.

15. • Addressing heterogeneity: At one extreme
each service event is unique or bespoke,
and designed to meet the specific needs of
a particular client. But unique or bespoke
services are typically expensive to provide.

16. THE MANAGEMENT OF
SERVICE INNOVATION
03

17. Barriers to Innovating Services
• Most of the barriers to innovation that exist
in manufacturing also apply to services, but
arguably services also face some important
additional barriers. One is that because ser-
vices do not have an independent physical
existence, but are instead provided, there is
a much closer relationship between the
service output (or product) and the means
of provision (the process).

18. The Appropriability Regime for Innovating
Services
A second important issue is the
'appropriability regime', which concerns how
firms can protect their inventions and
innovations against copying or imitation, and
how they can extract commercial value from
them (i.e. gain the returns to innovation).

19. • Formal forms include intellectual property
rights, such as patents, copyrights, design
rights, and trade- marks.
• Patents, which can be the strongest form of
intellectual property protection for techno-
logical innovation.
• Brands, trademarks, and service marks are
more relevant to services: a brand is a
repository or sign of qualities that are
difficult, if not impossible, to quantify.

20. • Copyright is also relevant, although copy-
rights protect intangible products, rather
than true services.
• Strategic forms of protection (including
secrecy, complementary assets and
activities, social capital or connections, and
reputation) are generally more significant
than formal IP protection, with both less
widely used than in manufacturing.

21. • Innova

22. • Innova

23. • Innova

24. • Innova

25. WHAT ARE
SERVICES?
SURGERY
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27. INTRODUCTION
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28. I'm Rain, and I'll be sharing with you
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33. Strategy
One
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convallis turpis venenatis interdum.
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WEBSITE
MARKETING
CONTENT
MARKETING
SOCIAL MEDIA
MARKETING
VIDEO
MARKETING

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2020
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2022
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36. Our New
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JOHN DOE

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38. Strategies
03
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85+ 90%
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Market Research

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Marketing campaign launches on September
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