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DEVELOPING SERVICE

PRODUCTS:
CORE AND SUPPLEMENTARY
ELEMENTS
JONATHAN E.W 201360042
STEFANY TABITA.E 201360173
ROSE LINDA 201460052
LYVIA201460082
EDITA ELIEZER 201460092
RISKA IMELYATNI 201460

Overview of Chapter 4
Designing a Service Product
The Flower of Service
Branding Service Products and Experiences
New Service Development

Service Product
A service product comprises all elements of
service performance, both tangible and
intangible, that create value for customers.
The service concept is represented by:

A core product,
Accompanied by supplementary services

Designing a Service Concept (1)


Core Product

Central component that supplies the principal,


problem-solving benefits customers seek

Supplementary Services

Augment the core product, facilitating its use and


enhancing its value and appeal

Delivery Processes

Used to deliver both the core product and each of


the supplementary services

Designing a Service Concept (2)


Service concept design must address the
following issues:

How the different service components are


delivered to the customer
The nature of the customers role in those
processes
How long delivery lasts
The recommended level and style of service to be
offered

Integration of Core Product, Supplementary


Elements and Delivery Process

The Flower of Service

The Flower of Service


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

Facilitating supplementary services


1. Information. To obtain full value from any good or
service, customers need relevant information. The
types of information range from train and airline
schedules to assistance in locating specific retail
outlets, to information on the services of professional
firms
2. Order. Taking once customers ready to buy, a key
supplementary element comes into play-accepting
application, orders, and reservations. Order taking
includes applications, order entry, and reservations
or check-ins.

Facilitating supplementary services


3. Billing is common to almost all service (unless
the service is provided free of charge).
Inaccurate, illegible, or incomplete bill risk
disappointing customers who may, up to that
point, have been quite satisfied with their
experience, or worse, such failures add insult to
injury if the customer is already dissatisfied

Facilitating supplementary services


4. Payment in most cases, a bill requires the
customer to take action on payment (and such
action may be very slow in coming !). Exceptions
include bank statements and other direct debit
paid services, which detail charges that will be
deducted from a customes account

Enhancing Supplementary Services


1. Consultation
Core: -Customized advice
-Personal counseling
-Tutoring/Training in product use
-Management or technical consulting

Enhancing Supplementary Services


2. Hospitality
Core: -Greeting
-Food and beverages
-Toilets and washrooms
-Waiting facilities and amenities
-Transport
-Security

Enhancing Supplementary Services


3. Safekeeping
Core: -Caring for possessions customer bring
with them
-Caring for good purchased or rented by
customers

Enhancing Supplementary Services


4. Exceptions
Core: -Special requests
-Problem solving
-Handling of complaints, suggestions,
compliments
-Restituition

Managerial Implications
Not every core product is surrounded by supplementary elements
from all eight clusters
The nature of the product helps to determine which supplementary
services must be offered and which might usefully be added to
enhance value and make the organization easy to do business with
People-processing services tend to be the most demanding in
terms of supplementary elements. especially hospitality, since they
involve close (and often extended) customer contact; similarly,
high-contact services usually have more customer interaction than
low-contact services
The Flower of Service and its petals discussed here can serve as a
checklist in the continuing search for new ways to augment
existing core products and to design new offerings

BRANDING SERVICE PRODUCTS AND EXPERIENCES

A product implies a defined and consistent


bundle of output as well as the ability to
differentiate one bundle of output from another
Service firms can also differentiate their products
in similar fashion to the various models offered
by manufacturers
Providers of more intangible services, also offer a
menu of products, representing an assembly of
carefully prescribed value-added supplementary
services built around the core product

Branding Strategies for Services


Most service organizations offer a line of
products rather than just a single product.
they must choose among four broad branding
alternatives:
Branded house (using a single brand to cover all
products and services),
house of brands (using a separate stand-alone
brand for each offering), or
Sub brands and endorsed brands which are both
some combination of these two extremes

Tiering Service Products with Branding


In a number of service industries, branding is not
only used for core services, but also to clearly
differentiate different service levels. Often based
on offering several price-based classes of service
concept, each is based on packaging a distinctive
level of service performance across many
attributes. This phenomenon, known as service
tiering, is particularly evident in industries such
as hotels, airlines, car rentals, and computer
hardware and software support.

Offering a branded experience


Branding can be employed at both the corporate
and product levels by almost any service
business. In a well managed firm, the corporate
brand is not only easly recognized but also has
mening for customers , standing for a particular
way of doing business. Applying distinctive brand
names to individual products enables the firm to
communicate to the target market the distinctive
experiences and benefits associated with a
specific service concept.

Offering a branded experience


The forum corporation, a consulting firm,
differentiates between
A random customer experience with high
variability
A generic branded experience by suppliers who
offer a consistently similar experience
A branded customer experience

New service development


Competitive intensity and customer expectations
are increasing in nearly all service industries.
The outcomes and process aspects of a service
often combine to create the experience and
benefits obtained by customer, both aspect must
be addressed in new service development

A hierarcy of new service categories

Style changed
Service improvements
Supplementary
Process line extensions
Product line extensions
Major process innovations
Major service innovations

Reengineering Service Processes


The design of service process has implications not only for
customers but also for the cost , speed, and productivity with
which the desired outcome is achieved.
involves analyzing and redesigning processes to achieve faster
and better performance
Running tasks in parallel instead of sequence can
reduce/eliminate dead time
Examination of processes can lead to creation of alternative
delivery methods
Add/eliminate supplementary services
Resequence delivery of service elements
Offer self-service options

Physical Goods as a Source Of New


Service Ideas
Services can be built around rentals:
Alternatives to owning a physical good
and/or doing work oneself
Customers can rent goods, use and return for
a fee instead of purchasing them
Customers can hire personnel to operate own
or rented equipment
Any new durable good may create need for
after-sales services now and in future
possession processing

Creating Services as Substitutes for


Owning and/or Using Goods

Achieving Success in New Services


Developing
In developing new services :
Core product is of secondary importance
Ability to maintain quality of the total service
offering is key
Accompanying marketing support activities
are vital
Market knowledge is of utmost importance

Success Factors in
New Service Development
Market synergy

Good fit between new product and firms image/resources


Advantage versus competition in meeting customers needs
Strong support from firm during/after launch
Firm understands customer purchase decision behavior

Organizational factors
Strong interfunctional cooperation and coordination
Internal marketing to educate staff on new product and its competition
Employees understand importance of new services to firm

Market research factors


Scientific studies conducted early in development process
Product concept well defined before undertaking field studies

Conclusion
Designing a service product is a complex task that
requires an understanding of how the core and
supplementary services should be combined,
sequenced, delivered, and branded to create a
value proposition that meets the needs of target
market segements.

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