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Creating Service Product Service Sector Mgnt

Creating Service Product Service Sector Mgnt

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Published by: anandpwaindeshkar on Dec 19, 2009
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TYBMS - SEM V Prof. Hemant Kombrabail
All service organizations face choices about the types of products to offer and the operational procedures to use in creating them. In a customer-focused organization, these choices are often driven by market factors, with firms seeking to respond to the expressed needs of specific market segmentsand to differentiate the characteristics of their offerings against those of competitors. The availabilityof new delivery processes, such as the Internet for information-based services, allows firms to createfor their existing services new methods of delivery that effectively change the nature of the serviceexperience and create new benefits. The growth of Internet banking is a case in point. A more radicalform of product innovation involves exploiting technological developments to satisfy latent needsthat customers have not previously articulated or even recognized.A service product typically consists of a core product bundled with a variety of supplementaryservice elements. The core elements respond to the customers' need for a basic benefit, such astransportation to a specific location, resolution of a specific health problem, a professional solution toa problem, or repair of malfunctioning equipment. Supplementary services facilitate and enhance useof the core service. They range from provision of needed information, advice, and documentation to problem solving and acts of hospitality.Designing new services is a challenging task because it requires thinking about processes, people,and experiences; as well as outputs and benefits. Processes can be depicted through blueprints thatspecify employee tasks and operational sequences, as well as track the experience of the customer ateach step in service delivery.In designing a service a service provider should explore the following questions1.What are the key ingredients in a service product?2.How can we categorize the supplementary services that surround core products?3.What are some of the approaches that can be used in designing new services?4.What is the role of branding for service products?
Planning And Creating Services
What do we mean by a service "product"? Earlier we noted that a service is a "performance" rather than a "thing." When they purchase manufactured goods, customers take title to physical objects. Butservice performances, being intangible and ephemeral, are experienced rather than owned. Evenwhen there are physical elements to which the customer does take title, such as a cooked meal (whichis promptly consumed), a pacemaker implanted in a patient's body, a replacement part inside a car, asignificant portion of the price paid by the customer is for the value added by the accompanyingservice elements, including labor and expertise and the use of specialized equipmentWhen they are required by the nature of the service process to visit the service site - as in people-processing services - or choose to do so in other types of services such as traditional retail bank  branches - customers may be asked to participate actively in the process of service creation anddelivery. If customers perform self-service, their experiences are often shaped by the nature and user friendliness (or lack thereof!) of the supporting technology. In both instances, evaluations of theservice product are likely to be much more closely interwoven with the nature of the delivery processthan is the case for manufactured goods.1
TYBMS - SEM V Prof. Hemant KombrabailKey Steps In Service PlanningOne of the challenges in services marketing is to ensure that the task of product managementmaintains a strong customer focus at all times. Historically, operations management was oftenallowed to dominate this task, with the result that customer concerns were sometimes subjugated tooperational convenience. On the other hand, marketers cannot work in isolation on new-productdevelopment, especially when its delivery entails use of new technologies; marketers need to form a partnership with operations personnel and, in the case of high-contact services, with human resourcemanagers as welt Figure below outlines the key steps involved in planning and creating services,emphasizing the need for managers to relate market opportunities to deployment of their firms'resources: physical, technological, and human
Planning And Creating Services
TYBMS - SEM V Prof. Hemant KombrabailThe task begins at the corporate level with a statement of objectives
This statement leads into adetailed market and competitive analysis,
addressing each of the markets in which the firm isinvolved or thinking of entering. Paralleling this step is a resource allocation analysis,
requiringdefinition and appraisal of the firm's resources and how they are being allocated, as well asidentification of additional resources that might reasonably be obtained. This pair of steps can bethought of collectively as a form of SWOT analysis, identifying strengths, weaknesses, opportunities,and threats on both the marketing and operational/human resources fronts. Each leads to a statementof assets.The marketing assets statement
includes details of the firm's existing customer portfolio (including itssize, profile, and value), knowledge of the market and competitors, its product line, the reputation of its brand(s), its marketing implementation skills, and its positioning strategy / strategies. A positioning statement can be developed for each service that the firm offers to one or more targetmarket segments, indicating the characteristics that distinguish that service from competitiveofferings.The marketing opportunities revealed by this analysis must now be matched against an operatingassets statement
Can the organization afford to allocate the physical facilities, equipment,information technology, and human resources needed to market existing service products moreeffectively, add enhancements designed to improve competitive appeal, or create new serviceofferings? Conversely, does an analysis of these operating assets suggest new opportunities toimprove their utilization in the marketplace? If it lacks the resources needed for a new marketinginitiative, could the firm leverage its existing assets by partnering with intermediaries or even withcustomers themselves? Finally, does an identified marketing opportunity promise sufficient profits toyield an acceptable return on the assets used after deducting all relevant costs?From a marketing perspective, the next step in transforming an opportunity into reality involvescreating a service-marketing concept
to clarify the benefits offered to customers and the costs theywill incur in return. This marketing concept considers both core and supplementary services, their characteristics in terms of both performance level and style, and where, when, and how customerswill be able to have access to them. The related costs of service include not only money but alsodefinition of the amount of time, mental hassle, physical effort, and negative sensory experienceslikely to be incurred by customers in receiving service.A parallel step is to establish a service operations concept
which stipulates the nature of the processes involved (including use of information technology) and how and when the various types of operating assets should be deployed to perform specific tasks. Hence the need to define thegeographic scope and scheduling of operations, describe facilities design and layout, and identify thehuman resources required. The operations concept also addresses opportunities for leveraging thefirm's own resources through use of intermediaries or the customers themselves. Finally, theoperations concept clarifies which tasks and resources will be assigned to front-stage and which to backstage operations.Defining the marketing and operations concepts is necessarily an interactive process, as either or bothmay have to be modified in order to bring the two into the harmony needed to proceed with a givenservice offering. The planning task then moves on to a set of choices that management must make inconfiguring the service delivery process.3

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