The determinants of new service development: Service characteristics, market orientation, and actualizing innovation effort

This study aims to understand how service characteristics, market orientation, and efforts in innovation together drive new service development (NSD) performance. Both qualitative and quantitative (mixed methods) research are used in researching these relationships: first, in-depth interviews from six service managers are taken to support the conceptual framework and investigative measures. Then, a survey research from Top 500 service firms and Top 100 financial firms in Taiwan is used to examine the research hypotheses. The results indicate that service characteristics of heterogeneity and perishability and market orientation positively influence a firm’s resources and reward in innovation. Also, efforts in innovation and market orientation positively impact NSD performance. These understandings benefit the development of the innovative advantages of service firms in contrast to physical goods. Unlike prior research limited to a single service case, the empirical evidence here is supported by various service industries to develop a generalized model.