LECTURE 1: DEVELOPING SERVICE
SUPPLEMENTARY SERVICES
PRODUCTS: CORE AND
SUPPLEMENTARY ELEMENTS
PRODUCT
 Defined as an object or
substance (matter) that is
manufactured or redefines for
sale or a physical product that
you can see, touch or possibly
consume.
 Tangible
 There’s a “DISTANCE” from
production to consumption
 “Homogeneity” standardization
 Perishable
 Quality can easily be measure
SERVICE
 Defined as the action of helping
or doing work for someone. It can
also be an assistance or advice
given to customers during and
after the sale of goods.
 Intangible
 “INSEPARABILITY” from
production to consumption
 “Heterogeneity” non-standard
 Imperishable
 Quality is not easily measured
SERVICE PRODUCT IS CONSISTS
OF:
1. CORE PRODUCT (ESSENTIAL)
- What is being delivered? What is the
customer fundamentally buying from
you? (Eg. Buying a one night stay in a
hotel.)
This core is not enough to differentiate
your brand from your competitors
2.
(EXTRA) - This process augments the
Core Product by facilitating its use and
enhancing its value and appeal.
(Eg Instead of just offering a room for
the night, the fee already includes free
wi-fi, a gym, an access to the pool, free
breakfast, etc.)
This process is what sets you apart from
your competitors
3. DELIVERY PROCESS (TRANSFER)
- Refers to the delivery of the Core
Product and Supplementary Service.
(Eg. Was the room clean when the
guest arrived? Was the breakfast served
on time? Was I greeted by the staff?)
The social interaction during service
delivery is the key elements in many
services. An important role played by
professional personnel.
THE FLOWER OF SERVICE
2 types of supplementary services:
FACILITATING – either needed for
service delivery, or help in the use of the
core product.
ENHANCING (pretty) – add extra value
for the customer.
In a well-managed service organization,
the petals (flower leaves) and core
(essential) are fresh and well-formed.
Market positioning strategy helps to
determine which supplementary
services should be included.
FACILITATING ELEMENTS
Information - Customers often require
information about how to obtain and use
a product or service.
Examples of elements:
- Directions to service site
- Schedule or service hours
- Prices
- Conditions of sale
- Usage instructions
Order Taking - Customers need to
know what is available and may want to
secure commitment to delivery. The
process should be fast and smooth.
Examples of elements:
- Applications
- Order entry
- Reservations and check-in
Billing - "How much do I owe you?" Bills
should be clear, Accurate, and
intelligible.
Examples of elements:
- Periodic statements of account
activity
- Machine display of amount due
Payment - Customers may pay faster
and more cheerfully if you make
transactions simple and convenient for
them.
Examples of elements:
- Self-service payment
- Direct to payee or intermediary
- Automatic deduction
ENHANCING ELEMENTS
Consultation - Value can be added to
goods and services by offering advice
and consultation tailored to each
customer's needs and situation.
Example of elements:
- Customized advice
- Personal counselling
- Management consulting
Hospitality - Customers who invest
time and effort in visiting a business and
using its services deserve to be treated
as welcome guests - after all, marketing
invited them.
Examples of elements:
- Greeting
- Waiting facilities and amenities
- Food and beverages
- Toilets and washrooms
Safekeeping - Customers prefer not to
worry about looking after the personal
possessions that they bring with them to
a service site.
Examples of elements:
- Looking after possessions
customers bring with them.
- Caring for goods purchased (or
rented) by customers.
Exceptions - Customers appreciate
some flexibility when they make special
requests and expect responsiveness
when things don't go according to plan.
Examples of elements:
- Special requests in advance
- Complaints or compliments
- Problem solving - Restitution
(e.g. refund)
LECTURE 2: BRANDING SERVICE,
PRODUCTS, AND EXPERIENCES
 In general, goods can be defined
as objects, devices, things, or the
tangible dominant,
whereas services can be defined
as deeds, efforts, performance,
or the intangible dominant.
 Moreover, kindly note that when
the term "product" is mentioned,
it refers to both goods and
services and is used in such a
manner throughout the remainder
of our lectures.
SINGLE PRODUCT
- A product delivers a single
feature set that gives benefits to
a customer. It can be physical, a
service, or digital. Or it may be a
combination of types.
PRODUCT LINE
- Product lines are groups of
related products and/or delivers
multiple attribute sets.
 Single brand to cover all products
and services
 A separate, stand-alone brand for
each offering
A PRODUCT IS SINGULAR AND
PRODUCT LINES ARE PLURAL.
WHAT IS A BRAND?
A brand is a product or service that has
a unique identity. It may have a unique
name, logo, design, and packaging.
BRAND. Is a name, term, symbol or
design, or a combination of them
intended to identify the goods or
services of one seller or group of sellers
and to differentiate them from those of
competitors.
BRANDING
- Branding is the process by which
companies distinguish their
product offerings from the
competitor.
- It is the process of designing,
planning, and communicating
the name and the identity, in
order to build or manage the
reputation of a brand.
BRAND ARCHITECTURAL MODELS
Branded House - The parent or holding
company remains the parent brand and
all of the smaller sub-brands operate
under its umbrella. There may be
individual brand activity for different
products or services, but no brand
stands completely on its own.
(e.g., Google (with Google Calendas,
Maps, Slide, Drive, Meet, Classroom)
Endorsed Brands - This model still
makes use of a parent brand but each
extension is given its own identity. The
sub-brand is associated with the parent
brand only if it adds value. This is often
communicated with a “powered by” or
“brought to you by” position.
(e.g., Courtyard by Marriott, Residence
Inn by Marriott, Park Inn by Radisson)
House of Brands - If a Branded House
is a mansion with many rooms, a House
of Brands is a subdivision with individual
houses built in their own style. The
parent or holding company shares little
branding with its sub-brands, and the
marketing strategy is focused on
individual brands.
(e.g., Procter & Gamble, Nestle, and
San Miguel)
NEW SERVICE DEVELOPMENT
Major Service Innovation: New core
products for previously undefined
markets. (e.g. introducing a loyalty
program)
Major Process Innovations: Using
new processes to deliver existing
products with added benefits.
(e.g. introduction of key cards instead of
bulky room keys)
Product Line Extensions: Additions to
current product lines. (e.g. Hotel having
their own restaurant)
Process-Line Extensions: Alternative
delivery procedures (e.g. online booking
and now accepting credit card
payments)
Supplementary Service Innovations:
Addition of new or improved facilitating
or enhancing elements. (e.g. an added
pool or gym at the hotel, or an addition
of Netflix)
Service Improvements: Modest
changes in the performance of current
products – whether it’s core or
supplementary. (e.g. improved wifi-
connection or bed size)
Style Changes: Visible changes in
service design or scripts.
(e.g. welcoming guest at check-ins now
require addressing the guest by name)
LECTURE 3: IMPROVING QUALITY
AND PRODUCTIVITY
QUALITY - A distinctive attribute or
characteristic possessed by someone or
something.
PRODUCTIVITY - Is a measure of how
efficiently a person completes a task.
We can define it as the rate at which a
company or country produces goods
and services, based on the amount of
inputs used to deliver the goods.
Quality and productivity are twin
paths toward creation of value for
both customers and organizations.
FACTORS THAT BOOST
PRODUCTIVITY IN OPERATIONS
MANAGEMENT
1. Training - Training is teaching, or
developing in oneself or others, any
skills and knowledge or fitness that
relate to specific useful competencies.
Training has specific goals of improving
one's capability, capacity, productivity
and performance. Well-trained
employees can work faster with less
waste or errors, meaning higher output
in less time.
2. Team Goals - Work can be pretty
uninspiring when there are no defined
goals to reach. Ensure the entire team is
aware of the goals, and make those
goals realistic. Too low, and employees
might feel less motivated after reaching
an easy goal. Too hard, and employees
will feel deflated and stressed. Also,
incorporate rewards for when the team
hits their goals.
3. Working Conditions - Make the
workspace comfortable and inviting for
employees. That could mean choosing
an office with plentiful windows, adding
in standing desks, or outfitting a break
room with tons of amenities like coffee,
snacks, and comfy sofas.
4. Support - If an employee is
struggling with something, listening to
their problems and providing swift
guidance and understanding can make
all the difference. Training plays a role
here, too; if an employee is having a
hard time meeting goals due to a
specific weakness, offering support via
training can help them grow their skills.
5. Fair Wages and Benefits - Knowing
they are being paid fairly for their work
and they can enjoy free healthcare or
plentiful vacation time will motivate
employees to give their all at work.
Competitive pay and benefits help
employees feel valued and dedicated to
the job.
6. Technology - Technology can
improve productivity immensely. It can
be used to improve team
communications through collaborative
tools, like a project management app,
track inventory, and automate
monotonous tasks so the team can
focus on more pressing issues.
What is the core of Total Quality
Management?
Customer Satisfaction - Utmost
customer satisfaction is a primary need
for a product (whether its goods or
service). It is therefore necessary for
products and services to meet or
exceed customer expectations.
Marketing/sales have a great impact on
the opinions of customers and their
perception of quality; regardless of the
manufacturer's perception of quality for
that product/service. Thus, this widens
the gap between the
operations/manufacturing team and the
sales and marketing team.
So, customer expectations should be
fulfilled by the quality of the product or
service.
QUALITY - is the totality of features and
characteristics of a product or service
that bear on its ability to satisfy given
needs.
THE GAP MODEL IN SERVICE
DESIGN AND SERVICE DELIVERY
The gap model (also known as the "5
gaps model") of service quality is an
important customer-satisfaction
framework.
Valarie Zeithaml, A. Parasuraman, and
Leonard Berry distinguished four
possible gaps inside the service
organization that may lead to the fifth
and most dangerous gap—the
difference between what customers
expected and what they perceived was
delivered.
TOTAL QUALITY MANAGEMENT
HISTORY
- The history of quality
management can be traced all
the way back to The Middle
Ages. Work completed by
journeymen and apprentices
were evaluated and inspected by
the skilled worker to ensure that
quality standards were met in all
aspects of the finished product,
ensuring satisfaction of the buyer.
And while the history of quality
management has gone through a
number of changes since that
time, the end goal is still the
same.
- It was during the 1920’s when
quality management systems, as
we know them today, started to
surface. The focus of quality
management was on the end
product, it was the first time that
statistical theory was applied to
product quality control.
- Product quality control was
determined through inspections.
This involved measuring,
examining and testing the
products, processes and services
against specific requirements to
ensure that each element
adhered to set standards and
guidelines.
- Companies started to experience
difficulties in following through
with quality control standards. It
became evident that there was a
great need for change and
development. Change and
development were brought forth
during the 1940’s by industry
leaders and experts like Deming,
Dodge, Juran and Kawasaki. This
would be the beginning of Total
Quality Management as we know
it today.
- Inspections were now carried out
by production personnel. They
were responsible for inspections
during specific production
intervals. This would change the
focus from simply inspecting the
end product to actually
preventing end product problems
through early detection on the
production line.
WILLIAM EDWARDS DEMING known for the development of the
concept of the fishbone diagram, which
Is widely acknowledged as the leading
is also known as the “Ishikawa diagram“
management thinker in the field of
quality. He was a statistician and
business consultant whose methods
helped hasten Japan's recovery after
the Second World War and beyond.
It was during the 1940’s that Japan
caught wind of Total Quality
Management. At that time, Japanese
products were considered poor quality
imitations. Hearing about the success of
quality management in the west, Japan
employed the assistance of quality
management experts like Deming and
Juran. Little did the Western culture
know at that time, Japan would soon
push the envelope and set new
standards in TQM.

LECTURE 4: SERVICESCAPE

SERVICESCAPE is defined as the

physical environment in which a service
can be performed. It aids in the analysis
and identification of the impact of a
favorable environment on the service-
based industry.

KAORU ISHIKAWA Aspects of servicescape:

Kaoru Isikawa is considered as the
Father or Japanese Quality. He was a
Japanese professor, advisor and
motivator with respect to the innovative
developments within the field of quality
management. Kaoru Ishikawa is best
1. Spatial Layout and Functionality -
is concerned with how furnishings,
equipment, and machinery are
arranged, their shape and size, and, of
course, the spatial relationship that
exists between them. Functionality or cookies, acts as a strong enticing
refers to an item's ability to provide force and can easily draw people in.
customer satisfaction. Remember that the ambient condition
has proven to be a significant aspect of
(e.g. Employees or workers are unlikely
servicescape.)
to assist you in dealing with them.
ATMs, self-service restaurants, internet
shopping, and so on are all good
Examples of Servicescape:
examples.)
When the product value of two
2. Signs, Symbols, and Artifacts - In a
companies is the same, what
physical environment, the sign is one of
distinguishes them is their physical
the most explicit signals that can
environment. A person will feel at ease
communicate directly with a customer.
in one location but not in another. This
These are prominently displayed on
could be the deciding factor for him. For
both the exterior and interior of a
example, if you have the choice
building and serve as communicators.
between having dinner in a plain room
The signs can be used as labels, such
with only basic amenities and another
as the name of a department or
place with a soothing ambiance, you will
company, for directional purposes, such
always choose the latter.
as an entrance, or as rules for specific
behavior, such as no smoking. Symbols
and artifacts can also be used to give
the reader an implicit cue. Elements of Servicescape

(e.g. Artwork, floor coverings, 1. Facility Exterior

photographs on the wall, and the display
 Landscape
of prominent artifacts with symbolic
meaning that connect and communicate  Exterior design
with its reader are some important
examples.)  Surrounding environment

3. Ambient Conditions - Ambient  Parking

conditions include an environment's  Signage
background conditions such as color,
noise, music, sound, lighting, and so on. 2. Facility Interior
These are significant factors because  Music
they affect one or more of our five
senses and can alter a person's mindset  Layout
and perception.  Equipment
 Air quality temperature
(e.g. In some cases, we hear a relaxing  Interior design
background score to help us relax. The
effect of a strong scent, such as coffee
3. Others
 Virtual servicescape
 Brochures
 Employee dress
 Billing Statements
 Web pages
 Uniforms
 Reports
 Stationary
 Business cards
FUNCTIONS OF SERVICESCAPE
1. Image, differentiation, and
positioning - Servicescape is an
important component of value
proposition and service experience
because it can easily attract attention. It
provides entertainment as well as a
contact service, for example, in
shopping malls, the staff and the
environment work together to please its
customers.
2. Facilitating service encounters and
increasing productivity - If you want to
facilitate service encounters and
maximize productivity, design is critical
in the servicescape. Several shopping
malls have included small playhouse-
style enclosures as part of their
innovative design so that mothers can
use the services, leave their child there,
and continue shopping in peace.
APPROACH OF SERVICESCAPE
1. Direct Observation - Trained
observers are hired to observe and
record the actions and reactions of both
employees and customers. In-depth
interviews and direct observation have
aided in the investigation of participant
reactions and interactions. The findings
have been helpful in comparing and
redesigning the servicescape for
improved results.
2. Environment Surveys - An
environment survey asks both
employees and customers to express
their preferences and needs by
responding to predetermined questions
in a specific format. It assesses three
different factors, including social
condition, design, and ambiance. The
most significant benefit of this survey is
the interpretation and administration of
the derived results in order to improve
the servicescape.
3. Photographic Blueprint - The visual
and photographic blueprint can assist in
understanding the customer's point of
view. It is used to evaluate the service
process.
4. Experiments - Experimental methods
aid in assessing specific reactions of
both customers and employees to
environmental changes. It is very simple
to assess and implement real
perceptions and reactions.
LECTURE 5: DISTRIBUTING
SERVICES THROUGH PHYSICAL
AND ELECTRONIC CHANNELS
Key questions for designing an effective
service distribution strategy:
THE ROLE OF INTERMEDIARIES
(Understand the role, benefits, and
costs of using intermediaries in
distributing services)
Should a service organization deliver all
aspects of its service itself? Or it should
it involve intermediaries to take on
certain parts of service delivery?
ALTERNATIVE SALES CHANNELS IN
THE HOSPITALITY INDUSTRY.
FACTORS FAVORING ADOPTION OF
TRANSNATIONAL STRATEGIES
Several forces or industry drivers
influence the trend toward globalization
and the creation of transnationally
integrated strategies.
Applied to services, these forces
are market, competition, technology,
cost, and government drivers.
Their relative insignificance may vary by
type of service.
FACTORS FAVORING ADOPTION OF
TRANSNATIONAL STRATEGIES
Market Drivers - include common
customer needs across many countries,
global customers who demand
consistent service from suppliers around
the world, and the availability of
international channels in the form of
efficient physical supply chains or
electronic channels
Technology Drivers - they tend to
center around advances in information
technology such as enhanced
performance and capabilities in
telecommunications, computerization,
and software;
Cost Drivers - the effects of these
drivers vary according to the level of
fixed costs required to enter an industry
and the potential for cost savings. Cost
may be reduced by strategies such as
equipment leasing, seeking local-
investor owned facilities or awarding
franchise to local entrepreneurs.
Government Drivers - this driver can Possession-processing Services
serve to encourage or discourage the
this category involves services to the
development of a transnationally
customer's physical possessions and
integraed strategy. Among these drivers
includes repair and maintenance, freight
are favorable trade policies, compatible
transport, cleaning, and warehousing.
technical standards, and common
Most services in this category require an
marketing regulation.
ongoing local presence, regardless of
Competition Drivers - firms may be whether customers drop off items at a
obliged to follow their competitors into service facility or have a service staff
new markets in order to protect their visit the customer's site.
position elsewhere. Similarly, once a
major player moves into a new foreign
market, a scramble for territory among
competing firms may ensue.

HOW DOES THE NATURE OF

SERVICE AFFECT INTERNATIONAL
DISTRIBUTION?
Are some types of services easier to
internationalize than others? What are
the alternative ways a service company
can tap on the potential of international
markets? Depending in part on the
nature of the service (possession-
processing or information-based
service) international distribution
strategies have vastly different
requirements.

People-processing Services
this service requires direct contact with
the customer. the service provider
needs to have a local geographic
presence, stationing the necessary
personnel, building, equipment,
vehicles, and supplies within reasonably
easy reach of target customers.