MKW3301

Services Marketing

Lecture 3
Developing Services Offering
 Performing a service
• To plan a service performance successfully, it is
necessary to understand a performance’s
characteristics:
• A service performance is likely to be a multifaceted
phenomenon, i.e. many aspects making up the experience.
• A service performance exists only during its actual
enactment. It cannot be stored.
• A service performance occurs over time and involves a
sequence of events.
Supplementing the Basic Service
Performance
• Services can be seen as comprised of a core and
supplementary elements.
• The core is the basic need-satisfying ability of the product
while the supplementary elements enhance the core.
• Supplementing a service performance sometimes involves
increasing its complexity and adding in extra steps and
interactions for the customer
Differentiating the Service Performance
• The augmented product that an organisation develops can
easily become tomorrow’s expected product from the
customers’ point of view.
• Hence, organisations should keep a vigilant eye on ways to
develop the potential product. What we add in as a value can
become core aspects tomorrow.
• Organisations need to be sensitive to the costs of developing
and implementing supplementary service elements versus
the benefits provided.
 The Flower of Service
A core product surrounded by a cluster of supplementary
services ( Fig. 4.2)
 The Flower of Service
Supplementary Services
• There are two kinds of supplementary services
• Facilitating supplementary services ― either needed for service
delivery, or help in the use of the core product
• Enhancing supplementary service ― add extra value for the
customer

• In a well designed and well-managed service organization,

the petals and core are fresh and well-formed
• Market positioning strategy helps to determine which
supplementary services should be included
 The Flower of Service
Supplementary Services
• Facilitating
• Information – Customers often require information about how to
obtain and use a product or service

• Order-taking – Customers need to know what is available and may

want to secure commitment to delivery. The process should be fast
and smooth

• Billing – Bills should be clear, accurate and intelligible

• Payment – Customers may pay faster and more cheerfully if you

make transactions simple and convenient for them
 The Flower of Service
Supplementary Services
• Enhancing
• Consultation – Value can be added to goods and services by offering
advice and consultation tailored to each customer’s needs and situation

• Hospitality – Customers who invest time and effort in visiting a business

and using its services deserve to be treated as welcome guests

• Safekeeping – Customers prefer prefer not to worry about looking after

the personal possessions that they bring with them to a service site

• Exceptions – Customers appreciate some flexibility when they make

special requests and expect responsiveness when things don’t go
according to plan
 The role of intermediaries in service
distribution
Challenges for the original supplier:
• Act as guardian for the overall process
• Ensure that each element offered by intermediaries fits overall service concept
 Core and supplementary services
• Not every core service is surrounded by all supplementary
service elements
• Which type of service has supplementary elements?
 Core and supplementary services
• Typically, people processing services have more kinds of
service ‘petals’, but other types may be more dependent on
certain kinds of petals.
Beauty services
• The four facilitating service petals plus
• Consultation
• Hospitality
• Exception
Financial services or car mechanic
services
• Hospitality reduces in importance
• Safekeeping becomes crucial
• High contact services typically have more complementary services
• Supplementary services hold strategic value as they create a barrier
to customer switching
• Which supplementary services to include is determined by the
market positioning strategy
Comparing the petals for Air Asia vs. SIA
What facilitating service is this?
Facilitating supplementary services -
Information

• Advertisements • Advertisements
• In-flight service • In-flight service
• Frequent Flyer Club • Frequent Flyer Club
• Apps • Apps
What facilitating service is this?
 Facilitating supplementary services –
Order taking

• Online booking via own website

• Via travel agents/intermediaries i.e skyscanner.com
• Direct via sales counters
• Call centers
What facilitating service is this?
 Facilitating supplementary services –
Billing

• E-itinerary
• FFP account information
• Paper vs non-paper billing?
What facilitating service is this?
 Facilitating supplementary services –
Payment

• Direct Debit
• Credit Card
• Cash
• Third Party (paypal, alipay, etc
What enhancing service is this?
 Enhancing supplementary services -
Consultation

• Is there any?
• Is it needed?
• Who does it, the airlines itself or
collaborators?
What enhancing service is this?
Enhancing supplementary services -
Hospitality
What enhancing service is this?
Enhancing supplementary services -
Safekeeping

• Luggage handling (charged vs assumed)

• Procedures in dealing with delays, lost
luggage, etc
• Maximum amount of lost luggage
reimbursement
• Safekeeping privileges of premium
members?
• Partnership with insurance?
What enhancing service is this?
Enhancing supplementary services -
Exceptions

• Flexibility in changing flights?

• Flexibility in handling layovers?
• How much is being charged for giving
exceptions/‘flex’?
Managerial implications
• Not every core product is surrounded by supplementary
elements from all eight clusters
• Nature of product helps to determine:
• Which supplementary services must be offered
• Which might usefully be added to enhance value and ease of doing
business with the organization
• Firms that offer different levels of service often add extra
supplementary services for each upgrade in service level
Lecture summary
• Facilitating versus Enhancing services
• How is the flower of service closely tied to positioning and
differentiation