Creating the Service Product

Planning & Creating a ServiceCorporate Objectives and Resources

Marketing AssetsCustomer Base, Mkt. Knowledge Product opportunitiesBrand Reputation

Service Marketing Concept

•Benefits to customer Core supplementary elements accessibility (where & When)

•User cost Price/other monetary costs Time Mental and physical effort

Service Operations Concept

•Nature of processes•Geographic scope of ops•Scheduling•Facilities design/layoutLeverage through partners•Task allocation:

Market & Competitive Analysis

Resource Allocation Analysis

Operating AssetsLocation & Equipment, IT Systems, HR (number &. Skills)Cost Structure)

Augmented Service Product

Core Products and Supplementary Services

• Most firms offer customers a package of benefits:

• core product (a good or a service)

• supplementary services that add value to the core

• In mature industries, core products often become commodities

• Supplementary services help to differentiate core products and create competitive advantage by:

– facilitating use of the core service

– enhancing the value and appeal of the core

Shostack’s Molecular Model of a Total Market Entity

DistributionPrice

Marketing Positioning

KEY Tangible elements Intangible elements

Service frequency

Vehicle

Transport

Pre- and post-flight

serviceFood and drink

In-flight service

Product Design: What Do We Offer and How Do We Create and Deliver It?

Design of your product = Core + Supplementary + Delivery process

Core

Scheduling Process

Service Level

Customer Role

Supplementaryservices offeredand how createdand delivered

Delivery Concept For Core Product

Core and Supplementary Services in a Luxury Hotel (Offering Guests Much More than a Cheap Motel!)

Reserva tio nVa let

Pa rking

Receptio n

Ba gga geService

C o ckta il Ba r

Resta u ran tEnterta inment/

Spo rts / Exercise

Teleph o ne

W a ke - upC a ll

Ro o mService

BusinessC enter

C a sh ier

A Bed fo r theN igh t in an

Elega n t Priva teRo o m w ith a

Ba th ro o m

Hotel stay

Note:Core services shouldbe stretched More than the Supplementary

What Happens, When, and in What Sequence?

The Time Dimension in the Augmented Service Product

PreVisit

Reservation

USE GUESTROOM

Parking Get car

Check in

Porter

USE ROOM

MealTV Room service

PhoneCheck out

Time Frame of an Overnight Hotel Stay(real-time service use)

The Flower of Service:Categorizing Supplementary

Core

Information

Consultation

Order-Taking

Hospitality

Payment

Billing

Exceptions

Safekeeping Facilitating elements

Enhancing elements

KEY:

Facilitating Services - Information

Core

Customers often requireinformation about how to obtain and use a service.

They may alsoneed reminders anddocumentation

Facilitating Services - Order-Taking

Many goods and services must be ordered or reservedin advance. Customers needs to know what is availableand may want to secure commitment to delivery

Core

Facilitating Services - Billing

“How much do I owe you?”

Customers deserve clear, accurate and intelligible

bills and statements

Core

Facilitating Services - Payment

Customers may pay faster

and more cheerfully if you

make transactions simple

and convenient for them

Core

Enhancing Services-Consultation

Value can be added to goods and services byoffering adviceconsultation according each customer’sneeds and situation

Core

Enhancing Services - Hospitality

Customers who invest time

and effort in visiting abusiness and using itsservices deserve to betreated as welcome

guests

Core

Enhancing Services - Safekeeping

Customers prefer not toworry about looking afterthe personal possessions that they bring with themto a service site.

And also want deliveryand after-sales services

Core

Enhancing Services - Exceptions

Customers appreciate some flexibility in a business like

Prior special requests. Listening to their complainsResolving problemsRefunds / free repairs

Core

Branding Service Products

Service Branding: Clarifying Distinctive Service Offerings

• Marriott Hotel Brands– Marriott Hotels– Marriott Resorts– Courtyard by Marriott– Fairfield Inns– Residence Inns– SpringHill Suites– TownePlace Suites– Marriott Vacation Clubs

International

• British Airways BrandsIntercontinental

– First– Club World– World Traveller Plus– World Traveller

European

– Club Europe– Euro-Traveller

UK Domestic

– Shuttle

Branding A Family of Brands at Sun Microsystems

• Corporate umbrella brand– Sun Microsystems

• Product line brand (system support services)– Sun Spectrum Support

• Sub-brands (4 levels of support service programs)• Platinum• Gold• Silver• Bronze

Sub-branding clarifies service levels offered at different fees

Platinum: “Mission Critical” On-site service 24/7, two-hour response; telephone support 24/7, onsite parts replacement; additional services available

Gold: “Business Critical” Onsite service Mon-Fri 8am-8pm, four-hour response; telephone support 24/7; onsite parts replacement

Silver: “Basic Support” Onsite service Mon-Fri 8am-5pm, four-hour response; telephone support Mon-Fri 8am-8pm; onsite parts replacement

Bronze: “Self Support” Phone support Mon-Fri 8am-5pm; parts replacement by courier

New Service Development:A Hierarchy of New Service Categories

• Major service innovations--new core products for previously undefined markets Eg: Ebay, Amazon, Dabbawalas

• Major process innovations--using new processes to deliver existing products and offer extra benefits (Eg: Vodafone)

• Product line extensions--additions to current product lines (Eg: SBI Mutual Funds)

• Process line extensions--alternative delivery procedures (Hotels- Self-service, Eat there, Catering)

• Supplementary service innovations--adding new or improved facilitating or enhancing elements

(Eg: institutes providing Book bank)

• Style changes--visible changes in service design or scripts

Success Factors in New Service Development

• Market synergy

• Organizational factors

• Market research factors