Love Lock 04

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 4 - 1

Chapter 4

Creating the

Service Product


Key Steps in Service Planning:Matching Opportunities to Resources

Must relate marketing opportunities to firm’s resources (physical, financial, technological, human)

Identify, evaluate firm’s marketing assets Customer portfolio/lifetime value (customer equity) Market knowledge Marketing implementation skill Product line Competitive positioning strategies Brand reputation (brand equity)

Identify, evaluate firm’s operating assets Physical facilities, equipment Technology and systems (especially IT) Human resources (numbers, skills, productivity) Leverage through alliances and partnerships Potential for customer self service Cost structure


Operating Assets(Facilities/Equipment, IT Systems, People, Op. Skills, Cost Structure)

Service Design Involves Matching Marketing Concept with Operations Concept (Fig. 4.1)

Corporate Objectivesand Resources

Service Delivery Process

Marketing Assets(Customer Base, Mkt. Knowledge,

Implementation Skills, Brand Reput.)

Service Marketing Concept

•Benefits to customer from core/ supplementary elements, style, service level, accessibility

•User costs/outlays incurred•Price/other monetary costs•Time•Mental and physical effort•Neg. sensory experiences

Service Operations Concept

•Nature of processes•Geographic scope of ops•Scheduling•Facilities design/layout•HR (numbers, skills)•Leverage (partners, self-service)•Task allocation: front/backstage staff; customers as co-producers


Understanding the Components of the

Augmented Service Product


Shostack’s Molecular Model of a Total Market Entity - Passenger Airline Service (Fig. 4-2)

DistributionPrice

Marketing Positioning (Weighted toward evidence) Source: Shostack

KEY Tangible elements Intangible elements

Service frequency

Vehicle

Transport

Pre- and post-flight

serviceFood and drink

In-flight service


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 serviceenhancing the value and appeal of the core


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

Core

Scheduling Process

Service Level

Customer Role

Supplementaryservices offeredand how createdand delivered

Delivery Concept For Core Product


What Should Be the Core and Supplementary Elements of Our Service Product?

How is our core product defined and what supplementary elements currently augment this core?

What product benefits create the most value for customers?

Is our service package differentiated from the competition in ways that are meaningful to target customers?

What are current levels of service on the core product and each of the supplementary elements?

Can we charge more for higher service levels on key attributes (e.g., faster response, better physical amenities, easier access, more staff, superior caliber personnel)?

Alternatively, should we cut service levels and charge less?


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


What Happens, When, and in What Sequence? The Time Dimension in the Augmented Service Product

PreVisit

Reservation

USE GUESTROOM OVERNIGHT

Parking Get car

Check in

Porter

USE ROOM

MealPay TV Room service

PhoneCheck out

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


The Flower of Service:Categorizing Supplementary Services (Fig. 4-5)

Core

Information

Consultation

Order-Taking

Hospitality

Payment

Billing

Exceptions

Safekeeping Facilitating elements

Enhancing elements

KEY:


Facilitating Services - Information (Table 4.1)

Core

Customers often requireinformation about how toobtain and use a product orservice. They may alsoneed reminders anddocumentation


Facilitating Services - Order-Taking(Table 4.2)

Many goods and services must be ordered or reservedin advance. Customers need to know what is available andmay want to secure commitment to delivery

Core


Facilitating Services - Billing(Table 4.3)

“How much do I owe you?”Customers deserve clear, accurate and intelligiblebills and statements

Core


Facilitating Services - Payment(Table 4.4)

Customers may pay faster and more cheerfully if youmake transactions simpleand convenient for them

Core


Enhancing Services - Consultation(Table 4.5)

Value can be added to goods and services byoffering advice andconsultation tailored toeach customer’sneeds and situation

Core


Enhancing Services - Hospitality(Table 4.6)

Customers who invest time and effort in visiting abusiness and using itsservices deserve to betreated as welcome guests (after all, marketing invitedthem there!)

Core


Enhancing Services - Safekeeping(Table 4.7)

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

They may also want deliveryand after-sales services forgoods that they purchaseor rent

Core


Enhancing Services - Exceptions(Table 4.8)

Customers appreciate some flexibility in a businesswhen they make special requests. They expect itwhen not everything goesaccording to plan

Core


Branding

Service Products


Service Branding: Clarifying Distinctive Service Offerings

Marriott Hotel Brands

Marriott HotelsMarriott ResortsCourtyard by MarriottFairfield InnsResidence InnsSpringHill SuitesTownePlace SuitesMarriott Vacation Clubs

International

British Airways Brands

Intercontinental FirstClub WorldWorld Traveller PlusWorld TravellerEuropeanClub EuropeEuro-TravellerUK DomesticShuttle


Branding a High-Tech, B2B Product Line: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


Sun Spectrum Support: Sub-branding Highlights Four Service Levels

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


New Service Development:A Hierarchy of New Service Categories

Major service innovations--new core products for previously undefined markets

Major process innovations--using new processes to deliver existing products and offer extra benefits

Product line extensions--additions to current product lines

Process line extensions--alternative delivery procedures

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

Style changes--visible changes in service design or scripts


New Service Development: Physical Goods as Source of Service Ideas

Customers can rent goods—use and return for a fee— instead of purchasing them

Customers can hire personnel to operate their own or rented equipment

Any new durable product may create need for after-sales services (possession processing) Shipping Installation Problem-solving and consulting advice Cleaning Maintenance Repair Upgrading Disposal


Creating Services as Substitutes for Owning and/or Using Goods (Fig. 4-7)

Perform theWork Oneself

Hire Someone

to Do the Work

Own a Physical Good Rent the Useof a Physical Good

•• Hire a taxi or limousine

•• Send work to secretarial service

• Rent car and drive it

• Rent word processor and type

• Hire chauffeur to drive car

• Hire typist to use word processor

• Drive own car

• Type on own word processor


Service Development through Delivery Options: Alternative Meal Service Formats (Fig. 4-8)

HomeDelivery

Order food,

give address

Driver rings

doorbell

Pay driver,take food Eat

Telephone

Restaurant

Drive-InRestaurant(Take Out)

See sign Order viamicrophone

Get meal atpickup, pay

Drive away,eat later

Stop car atorder point

Fast-FoodRestaurant(Eat In)

See sign Park and

enter

Order meal,

and pay

Pick upmeal

Find tableand eat

Clear tableand leave

HomeCatering

Arrange to meet caterer

Plan meal, pay deposit

Food and staff arrive

Meal ispreparedand served

EatStaff cleans

up; pay


Elements of a Hotel Offering: Trading off Room Price vs. Features/Services

External building design and features

Room features

Food-related services

Lounge facilities

Services (e.g., reception)

Leisure facilities

Security—people/systems


Success Factors in New Service Development

Market synergy Good fit between new product and firm’s image/resources Advantage vs. 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

Love Lock 04

Documents

Transcript of Love Lock 04