Augmenting the Core Product

Shostack’s Molecular Model: Passenger Airline Distribution

Service Price

Service Vehicle
Frequency

In-flight
Transport Service
Pre- &
Postflight
Service Food &
Drink

Key
Tangible Elements
Marketing Positioning
(weighted toward evidence)
Intangible Elements
Source: Shostack
 The Components of a Service Product
• ‘What’ the customer is fundamentally buying

Core Product • The core product is the main component that supplies the desired
experience, it supplies the principal, problem-solving benefits
customers seek

• The core product is usually accompanied by a variety of other

Supplementary service-related activities referred as supplementary services

Services • Supplementary services augment the core product, both

facilitating its use and enhancing its value

Delivery • The processes used to deliver both the core product and
Processes each of the supplementary services

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Augmenting the Core Product

Are supplementary services needed to facilitate use of core product

or simply to add extra appeal?

Should customers be charged separately for each service

element?

Or should all elements be bundled at a single price?

Core and Supplementary Services at Luxury Hotel (Offering Much More than Cheap
Motel!)

Reservation
Cashier Valet
Parking

Business
Reception
Center
A Bed for the
Room Night in an
Service Elegant Private Baggage
Room with a Service
Bathroom
Wake-up Cocktail
Call Bar

Internet Entertainment/
Sports/ Restaurant
Exercise
The Flower Of Service

Consultation

The Flower of Service: Core Product Surrounded by Clusters of

Supplementary Services
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How to Determine What Supplementary Services Should Be Offered

• 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
• People-processing and high-contact services tend to have more supplementary
services
• Market positioning strategy helps to determine which supplementary services
should be included
• Firms that offer different levels of service often add extra supplementary services
for each upgrade in service level
 Facilitating Supplementary Services:
Information
To obtain full value from any good or service, customers need relevant
information.
Information includes the following:
• Direction to service site
• Schedules/service hours
• Price information Core
• Terms and conditions of sale/service
• Advice on how to get the most value from a service
• Warnings and advice on how to avoid problems
• Confirmation of reservations
• Receipts and tickets
• Notification of changes
• Summaries of account activities

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 Facilitating Supplementary Services: Order-taking

Once customers are ready to buy, a key supplementary

element comes into play — order-taking.
• Order-taking includes:
• Order entry
• On-site order entry
• Mail/telephone/e-mail/online/mobile app order
• Reservations or check-ins Core
• Seats/tables/rooms
• Vehicles or equipment rental
• Professional appointment
• Applications
• Memberships in club/programs
• Subscription services
• Enrolment-based services
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 Facilitating Supplementary Services: Billing

Billing is common to almost all services (unless the service is

provided free-of-charge).

• Billing can be:

Core
• Periodic statements of account activity.

• Invoices for individual transactions.

• Verbal statements of amount due.

• Online or machine display of amount due for self-payment transactions.

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 Facilitating Supplementary Services: Payment
A variety of payment options exist
• Self-service
• Inserting card, cash or token into machine
• Electronic funds transfer
• Mailing a check
• Entering credit card information online
• Online payment systems such as PayPal, Google Wallet or Bitcoins Core
• Direct to payee or intermediary
• Cash handling or change giving
• Check handling
• Credit/charge/debit card handling
• Coupon redemption
• Automatic deduction from financial deposits
• Automated systems
• Pre-arranged automatic deduction for bill payment through direct debit

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Enhancing Supplementary Services (1 of 4)
Consultation - involves a dialog to probe for customer requirements and then
develop a tailored solution
o Customized advice
o Personal counseling
o Tutoring/training in service use
o Management or technical consulting Core

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Enhancing Supplementary Services (2 of 4)
Hospitality - reflect pleasure at meeting new customers and greeting old ones
when they return
• Greeting
• Food and beverages
• Toilets and washrooms
• Waiting facilities and amenities Core
o Lounges, waiting areas, seating
o Weather protection
o Magazines, entertainment, newspapers
• Transport
Enhancing Supplementary Services (3 of 4)
Safekeeping - assistance with safekeeping customers’ personal
possessions
• Child care, pet care
• Parking for vehicles, valet parking
• Coat rooms
• Baggage handling Core

• Storage space
• Safe deposit boxes
• Security personnel

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Enhancing Supplementary Services (4 of 4)
Exceptions - supplementary services that fall outside the routine of
normal service delivery
• Special requests
• Problem-solving
• Handling of complaints/suggestions/compliments
• Restitution Core