1. Kindstrom, Daniel and Kowalkowski, Christian (2009),
“Development of Industrial Service Offerings: A Process
Framework,” Journal of Service Management, 20(2), 156-172.
Brett Carter
MKTG 463: Service Innovation
Fall of 2014
2. Agenda
• Article Overview
• Key Learning Points
• Follow-up Research
• Application to Team Topic
• References
• Questions
3. Article Overview
• Business is clearly moving from a goods dominant logic to service
dominant logic. This means that if traditional product companies do
not understand and conform, their marketing activities will become
outdated and obsolete.
• Product companies can apply Kindstrom and Kowalkowski’s four
stage framework for service development in order to continue to
stay viable.
• These stages include:
▫ Market Sensing
▫ Development
▫ Sales
▫ Delivery
4. Article Overview - Continued
• Notice that the framework is not linear. Rather, it is a continuous
process that a product company must be constantly using in order
to innovate their new service offerings.
• Kindstrom and Kowalkowski took 10 different Swedish based
companies and put them through personal interviews and focus
groups and tried to apply the four stage framework to potential new
service offerings.
5. Key Learning Point 1
• Market Sensing
▫ Product dominant firms have to be aware of any agents that are
acting on the company, regardless of if they are threatening,
friendly, helpful, etc. in order to gain more insight as to what may
or may not work as a service offering.
▫ This step is mostly about finding out what the best way to
structure the service would be and how to leverage current
knowledge to make the service offering possible.
6. Key Learning Point 2
• Development
▫ Developing a service instead of a product is going to be tough for
traditional product firms who know nothing else.
▫ This stage is about the co-creation of the service with the
customer, not simply using complex blueprints that are
traditionally used in new product development strategies.
▫ Services are customer-centric, so using a typical NPD framework
for a new service is not only a bad strategy but ultimately will not
work.
7. Key Learning Point 3 & 4
• Sales
▫ The sale of a service is obviously much different than the sale of a
product.
▫ Thus, sales forces that typically sell products are going to have to
be trained a very different way so they can sell services.
• Delivery
▫ Ultimately, the delivery of the service is the most people, and
relationship, intensive part of the whole process.
▫ This is where the customer decides whether or not they made a
good decision for themselves.
▫ In this stage, service providers will receive feedback and thus can
innovate their service offerings so they are better.
▫ Which means the company can then start from the beginning at
market sensing, and continue the constant innovation process.
8. Key Learning Point 5 & 6
• The Four-Stage framework as a whole.
▫ The framework, in-and-of itself, is a key learning point.
▫ It gives the audience a starting point for developing services for
companies that have traditionally focused on the production and
the sale of goods.
• Managerial Implications
▫ This last key learning point has to do with managers being able to
keep the new service development process focused, but at the
same time, creative.
▫ By keeping the process too structured, creativity may be lost.
▫ By keeping the process too creative, the process loses focus.
▫ Good and bad ideas become indistinguishable.
9. Follow-up Research
• Kindstrom, Daniel and Kowalkowski, Christian (2014),
“Service Innovation in Product-Centric Firms: A Multi-
Dimensional Business Model Perspective,” Journal of
Business and Industrial Marketing, 29(2), 96-111
• Five years later, the same authors apply their knowledge
of new service development to business models as a
whole.
• 10 more Swedish based, international firms were studied
using the same process as four years earlier.
▫ Interviews
▫ Focus groups
10. Follow-up Research - Continued
• The overall model, although containing elements from the
previous study, is slightly different.
• The relationship between all the elements is that embedded in
a company’s strategy and structure is the offering, revenue
model, development process, sales process, delivery process,
customer relationships, value network, and culture.
• The elements are thus dependent on a company’s resources
and capabilities.
11. Application
• Group project: Service innovation as a driver for
competitive advantage in product companies.
• For product companies, Kindstrom and Kowalkowski
provide a simple framework product companies can use
to develop new service offerings.
▫ Although developing new service offerings may be a source
of competitive advantage, it is not sustainable.
▫ There needs to be something more to further differentiate
the business from competitors.
12. References
• Kindstrom, Daniel and Kowalkowski, Christian (2009),
“Development of Industrial Service Offerings: A Process
Framework,” Journal of Service Management, 20(2),
156-172.
• Kindstrom, Daniel and Kowalkowski, Christian (2014),
“Service Innovation in Product-Centric Firms: A Multi-
Dimensional Business Model Perspective,” Journal of
Business and Industrial Marketing, 29(2), 96-111.
