Virtually all product-oriented companies have some form of research and development effort that is responsible for designing and testing new products and/or modifications to current products. The R&D task in service-oriented companies is different because it is complicated by the lack of a physical product. A service, especially in people-based businesses, can be a little bit different each time it is rendered. The entire process of creating such services deals with concepts rather than physical objects. The testing process varies depending on whether the service is equipment-based or people-based, but in either case it is difficult to do test marketing or other types of market research on the new service. The entire process of creating such services deals with concepts rather than physical objects.The testing process varies depending on whether the service is equipment-based or people-based, but in either case it is difficult to do test marketing or other types of market research on the new service. Customers must be enticed into experiencing the service, and this often requires major marketing efforts. Thus the cost of introducing a successful new service may be quite high because it is difficult to predict what service concepts will be understandable and attractive to the customer. The difficulty of test marketing can, however, be turned into an advantage. Service concepts, especially in people-based service businesses, are malleable and can be changed even after they have been introduced in the marketplace, and the cost of such a change is often quite low. Any business must develop new services if it is to survive. This task is quite different from new product development. It is highly abstract, and the services that are developed require difficult and expensive testing in the marketplace. Thus there is little real innovation, and a great deal of imitation of services. For example, airlines and banks are well known for their imitative practices.