CHAPTER 4
Developing SERVICE Products:
Core and Supplementary
Elements
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Overview of Chapter 4
Designing a Service Product
The Flower of Service
Branding Service Products and Experiences
New Service Development
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Designing a
Service Product
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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
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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
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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 customer’s role in those processes
➔How long delivery lasts
➔The recommended level and style of service to be offered
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Integration of Core Product, Supplementary
Elements and Delivery Process (Fig. 4.3)
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The Flower of Service
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The Flower of Service (Fig 4.4) (1)
Information
Payment Consultation
Billing Core Order-Taking
Exceptions Hospitality
Safekeeping
KEY:
Facilitating elements
Enhancing elements
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The Flower of Service (2)
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
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Supplementary Services (1)
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
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Supplementary Services (2)
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 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
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Facilitating Services – Examples of Information
(Fig. 4.5)
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Facilitating Services – Examples of Order-Taking
(Fig. 4.7)
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Facilitating Services – Examples of Billing (Fig. 4.9)
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Facilitating Services – Examples of Payment
(Fig. 4.10)
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Enhancing Services – Examples of Consultation
(Fig. 4.11)
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Enhancing Services – Examples of Hospitality
(Fig. 4.13)
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Enhancing Services – Examples of Safekeeping
(Fig. 4.14)
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Enhancing Services – Examples of Exceptions
(Fig. 4.15)
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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
People-processing and high contact services tend to have more
supplementary services
Firms that offer different levels of service often add extra
supplementary services for each upgrade in service level
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Branding Service
Products and
Experiences
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Service Products
A product implies a defined and consistent “bundle of
output”
Firms can differentiate its bundle of output from
competitors’
Providers of more intangible services also offer a
“menu” of products
➔Represent an assembly of elements that are built around the core
product
➔May include certain value-added supplementary services
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Product Lines And Brands
Most service organizations offer a line of products rather
than just a single product.
They may choose among 3 broad alternatives:
➔Single brand to cover all products and services
➔A separate, stand-alone brand for each offering
➔Some combination of these two extremes
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Spectrum of Branding Alternatives
(Fig 4.18)
Source: derived from Aaker and Joachimsthaler
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New Service
Development
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A Hierarchy of
New Service Categories (1)
1. Style changes
➔Visible changes in service design or scripts
2. Service improvements
➔Modest changes in the performance of current products
3. Supplementary service innovations
➔Addition of new or improved facilitating or enhancing elements
4. Process-line extensions
➔Alternative delivery procedures
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A Hierarchy of
New Service Categories (2)
5. Product-line extensions
➔Additions to current product lines
6. Major process innovations
➔Using new processes to deliver existing products with added
benefits
7. Major service innovations
➔New core products for previously undefined markets
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Achieving Success in Developing
New Services
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
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QnA
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