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302 CHAPTER 8 • PRoduCT And sERviCE dEvEloPmEnT And oRgAnisATion
clients, so design suppliers can use similar client knowledge management to manage
the development of the relationship with customers. Third, it broadens the nature of
contact with customers to include a more general responsibility for the development
of relationships among other sources of expertise in the network. This has implications
for the way suppliers might organise their design activity – for example, in the way they
attempt to respond to change in client needs during the creation of the design service,
or in the use of implicit ‘service guarantees’.

Involving customers in development
Few people know the merits and limitations of products and services better than the
customers who use them. An obvious source, then, of feedback on product or ser-
vice performance will be those who regularly use (or have ceased using) them. Differ-
ent types of customers have the potential to provide different types of information.
New users can pinpoint more attractive product and service features; those who have
switched to a competitor offering can reveal its problems. A particularly interesting
group of customers are the so-called ‘lead users’. Lead users have requirements of
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a product or service that will become more general in a market, but they are aware
of these needs well ahead of the rest of the market. They are also users who will ben-
efit significantly by finding a solution to their requirements. This may prompt them
to develop or modify products or services themselves rather than wait for them to
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become commercially available. One reported example of lead-user research con-
cerns a new product development manager at Bose – the high-quality hi-fi and speaker
company. On visiting his local music store, his professional ear noted the high quality
of the background music being played. Investigating, he found that the store man-
ager was using Bose speakers designed for home use but had attached metal strips
around the speaker boxes so that they could be suspended close to the ceiling of the
store. Inspired by this, Bose built prototypes of speakers that would satisfy the need for
quality in-store speakers. These were taken back to the music store for further testing
and eventually led to the company successfully entering the market for high-fidelity
background music speakers.

Product and service development technology
One of the more significant changes in product and service development has been the
growing importance of ‘process’ technology within the development process. Until
relatively recently, although product/service technology knowledge was an important
input into the development activity, technology used to process this knowledge was
relatively unusual. It was limited to testing and evaluation technologies such as the
mechanical devices that would simulate the stresses of everyday use on products such as
automobiles or sports shoes, often testing them to destruction. Now process technolo-
gies are much more common, especially those based on computing power. For example,
simulation software is now common in the design of everything from transportation
services through to chemical factories. This allows developers to make design decisions
in advance of the actual product or service being created. The process technologies
allow designers to work through the experience of using the service or product and
learn more about how it might operate in practice. They can explore possibilities, gain
insights and, most importantly, they can explore the consequences of their decisions.
In that sense, simulation is often a predictive rather than an optimising technology.

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