CHAPTER 4 - DEVELOPING SERVICE COCEPTS: CORE AND SUPPLEMENTARY ELEMENTS Understand the key ingredients in a service product Marketers

have traditionally used the concept of the augmented product (also called theextended product or the product package) to describe the supplementary elements that add value to manufactured goods. Several similar frameworks have been developed to describe augmented products in a service context. You will learn about several models that seek to represent the ingredients of a service product.
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Shostack¶s molecular model, uses a chemical analogy to help marketers visualize their offerings as a ³total market entity´ (see Figure 4.2). The core benefit is at the center of the molecular model and is linked to a series of other service characteristics. Shostack argues that as in chemical formulations, a change in one element may completely alter the nature of the identity. Surrounding the core is a series of bands representing price, distribution, and communication efforts. This model helps identify the tangible and intangible elements involved in service delivery. Eiglier and Langeard¶s model is based on the concept of core and peripheral services. The core service is surrounded by a circle containing a series of peripheral services specific to that particular product. This model, like Shostack¶s, emphasizes the interdependence of the various components. Eiglier and Langeard distinguish between peripheral elements needed to facilitate use of the core service and those needed to enhance its appeal.

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Document the delivery sequence over time Documenting the delivery sequence over time has many benefits:
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Necessary for marketing Necessary for facilities planning Necessary for operations management Necessary for allocation of personnel Shows how certain services must be used before others Shows the amount of time that customers may spend on different service elements

Know the role of flowcharting in clarifying product elements Flowcharting is useful for several reasons:
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Offers a way to understand the totality of the customer¶s service experience Distinguishes between steps at which customers use the core service and those involving supplementary services

The Flower of Service: Categorize supplementary services that surround the core product You will learn that supplementary services can be divided into two broad groups, facilitating and enhancing, each of which can subsequently be divided into four clusters (for a total of eight), based on their more specific functions. Facilitating supplementary services are those that are

Understand the role of branding for different service products Branding is used at the product level (as opposed to the corporate level) to transform a series of service elements and processes into a consistent and recognizable service experience. placing or ers. The marketer¶s objective is to become a ³brand champion. ranging from major innovations to simple style changes. resolving problems. Billing: supplementary services that facilitate purchase by providing clear. Payment: supplementary services that facilitate purchase by offering a choice of easy procedures for making prompt payments.11 provides examples of several supplementary services in the consultation category. In the competitive arena. accurate and relevant documentation of what customers owe. y Hospitality: supplementary services that add value by treating customers like guests and providing amenities that anticipate their needs during interactions with the service provider. the support levels available from Sun Microsystems. and responsive procedures for taking applications. or training to help them obtain maximum benefit from the service experience. or making d reservations. . Within a company. Know the hierarchy of new service categories There are seven categories of new service. and the travel classes offered by Singapore Airlines and British Airways. counseling. branding of products can serve to differentiate one service package from another ²as exemplified by the array of hotel brands offered by Marriott. Figure 4. Order-taking: supplementary services that facilitate purchase by establishing fast. timely. plus information about how to pay. There are eight clusters²or petals²of supplementary services that surround the core: Facilitating Services y y y y Information: supplementary services that facilitate purchase and use by telling customers about service features and performance before. and after service delivery. accurate. although enhancing supplementary services add extra value to the product core. handling complaints and suggestions. y Safekeeping: supplementary services that add value by assisting customers with personal possessions that they have brought with them to a service delivery facility site or purchased there. branding serves to differentiate one firm¶s offering from another¶s. y Exceptions: supplementary services that add value by responding to special requests.required in service production.4) is a compelling visual framework for understanding the supplementary service elements that surround and add value to the product core. and providing compensation for service failures. during. offering a definable and predictable output. Enhancing Services Consultation: supplementary services that add value by providing responses to customers who require advice. The Flower of Service (Figure 4.´ by creating preference for a specific brand and build loyalty.

The marketing significance of supplementary services is fourfold: 1) Different segments may seek different levels of supplementary services. Supplementary services can enhance any type of core product a service or a physical ² good. a badly designed or poorly executed service is like a flower with missing. What does this concept provide for service marketers? insights The ³Flower of Service´ concept is used to illustrate the relationship between the core service and its supplementary services. billing. Th core e product is the central component that supplies the principal. the overall impression of the flower is unattractive. or discolored petals. Services usually are defined with reference to a particular industry ²for instance. hospitality. 2) The cost of providing an increased level of supplementary service on any one element can be related to the extra perceived value that it offers the customer and to the incremental price increase that the customer might be willing to pay to obtain it. Also.1) 2) 3) 4) 5) 6) 7) Major service innovations Major process innovations Product-line extensions Process-line extensions Supplementary service innovations Service improvements Style changes QUESTIONS AND EXERCISES Explain what is meant by core product and supplementary services. Explain the ³Flower of Service´ concept and identify each of the petals. The essence of the Flower of Service concept is that supplementary services can be categorized into eight distinct groups. product innovation usually centers on improvements or additions to supplementary service elements. 2. The latter consists of facilitating (information. as well as within it. order taking. problem-solving benefits customers seek. 4) In a mature product category. and payment) and enhancing (consultation. This makes the service attractive to customers. health care or transportation²based on the core set of benefits and solutions delivered to customers. and exceptions) services which serve to augment the ³beauty´ of the service. most core products are relatively ma ture. it serves as a guide for marketers for areas in the service that may need to be improved to prevent the flower from wilting further. This concept is useful for service marketers in identifying supplemen tary services needed to increase the attractiveness of the overall service. Such products could easily become commodities with competition based solely on price. 3) Supplementary services offer the possibility for differentiation against competitive offerings. wilted. Because supplementary services are often common to many different types of core products. without differentiation and augmentation. In a well-designed and well-managed service organization. the petals and core are fresh and well formed. Even if the core is perfect. Conversely. marketing managers can benchmark performance on any given supplementary element outside their own industry. safekeeping. The concept of supplementary services emerged from the notion of the ³augmented product´ in which services were often seen as a way to add value to manufactured goods. In many industries. .

phrase. In order to achieve this.3. The core product is also important. and poor execution. being held above all the product sub-brands. and also at the product level (e. i product line extensions.g. both core and supplementary service elements must meet consistent standards and mutually reinforce each other. price line extensions. service improvements. supplementary service innovat ons. Why do new services often fail? What factors are associated with successful development of new services? The failure of new services may be attributed to the inability of meeting a demonstrable consumer need. and also of the marketing support that goes with this. inability to cover costs from revenues. The nature of these enhancements is often tailored to suit the needs of customers in specific market segments. 6. 5. in an era of greater competition and product proliferation. Marriott versus Hilton. information etc. Facilitating supplementary services facilitate use of the core product or are required for service delivery and sale. design. For success development of new services.. The corporate brand is often referred to as the umbrella brand because it stands for a certain service style and set of corporate values. deep market knowledge is essential. Branding is used at both the corporate level (e. may keep recurring. branding the different levels of hotel offered by Marriott. or by a software support firm such as Sun Microsystems.g. citing services that you have used recently. symbol. or the different types of service offered by a specific airline such as BA. product brand names (sometimes referred to as sub-brands) have been given greater prominence. . they make t e h company ³easy to do business with. With the use of flowcharts. Enhancing supplementary services add extra value for customers and help to position the core product away from the competition.. students can also discuss that the core products may differ widely and common supplementary elements like billing. but it may take on a secondary role as compared to those listed above. servicing to distinguish these from the competitions. How is branding used in services marketing? What is the distinction between a corporate brand such as Marriott and the names of its various inn and hotel chains? A brand is a name. If well executed. and major service innovations are seven ways that a service provider can use to innovate. In designing a service concept however. British Airways versus United). What are the approaches firms can take to create new services? Style changes. Historically. Explain the distinction between enhancing and facilitating supplementary services. that are vital.´ 4. Different types of supplementary services play different roles. Give several examples of each. some will argue that it is the quality of the total service offering. major process innovations. or som combination of these that identifies a e company or its individual service offerings. service companies emphasized the corporate name but today.

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