Service Development through Quality Function Deployment in Niche Markets with High Product Innovation

Abstract

The services provided along with a product designed, made or installed by a firm, are becoming more and more important in maintaining market position, especially in niche markets, where the high levels of specialization required raise customers' expectations and increase their demands for quality performance. Also, in a niche market there are few customers, so if just one is lost, it means losing a relatively large share of the market, thus, customer satisfaction is all important. The problems for firms which operate under these conditions are exacerbated if the types of products and services they offer are highly innovative in the geographical area where they operate and/or, if their organization and finances are limited. The case of Geotherm srl, a small Italian firm that concentrates on designing, assembling and installing geothermal heat pump systems, offers an excellent example of the problems the management of a firm might meet in this situation: highly innovative context, correct interpretation of customer demands and transferring these demands into specific techniques of products and services. This paper describes how the QFD method was applied in Geotherm srl. QFD is today widely recognized as a valid tool for planning products and services using the Total Quality Management (TQM) approach.