Success and Failure in New Industrial Services

TLDR

Innovation is critical for physical goods, yet innovative services have received comparatively little attention. This study reports on an early major investigation of success and failure in new industrial services. The author integrates new product innovation and services marketing literature to examine how firms measure new service performance and the factors linked to success. New industrial services share success factors with physical goods—market orientation, formal development processes, project synergy, and superior offerings—yet require adjustments to service‑specific aspects such as customer quality perceptions, differentiating features, and cost reduction.

Abstract

The critical role of innovation has long been recognized in physical goods; however, the development of innovative services has received much less attention. The research described here reports on an early major study of success and failure in new industrial services. Building on her integration of two literatures on new product innovation and services marketing, Ulrike de Brentani reports how companies measure new service performance and the factors which are associated with success. She reports that new industrial services share some important success factors with physical goods, such as the firm's market orientation, a formal service development process, project synergy and a truly superior new service offering. Yet she finds that firms must adjust their approach to the distinctive character of services, including customer perceptions of service quality, features that successfully differentiate services in competitive terms and cost reduction.