Services Marketing

The Service Product

Module 4
 Service Decision Framework:
Decisions Involving Product Elements
What Business Are We In?

What Service Processes Can Be Used in Who Are Our Customers and
Our Operation? (PROCESS) How Should We Relate to Them?

WHAT SHOULD BE THE CORE AND SUPPLEMENTARY ELEMENTS

OF OUR SERVICE PRODUCT? (PRODUCT ELEMENTS)

What Price Should We Charge? How to Communicate? (PROMOTION &

(PRICE AND OTHER USER OUTLAYS) EDUCATION, PHYSICAL EVIDENCE)

Options for Delivery? (PLACE, CYBERSPACE How Can We Balance

& TIME, PHYSICAL EVIDENCE) PRODUCTIVITY AND QUALITY?

How Should We Match Demand and Productive Capacity?

What Are Appropriate Roles for People and Technology? (PEOPLE)

2
How Can Our Firm Achieve Service Leadership?
Conceptualizing the Service Product
Level 1 Consumer Benefit Concept
Concerned with what benefits do customers/clients seek

Level 2 Service Concept

Concerned with what general benefits will the service organization offer

Level 3 Service Offer

Concerned with more detailed shaping of the service concept.
Decisions on, and clarifications of:
• service elements (tangible and intangible)
• service forms (in what way / how)
• service levels (quality and quantity)

Level 4 Service Delivery System

Concerned with people, process, facilities etc. 3
 The Service Product

Intangible
product core
Expected level

Augmented level

Unexpected
positive level
4
What Should Be the Core and Supplementary
Elements of Our Service Product?
• What are the characteristics of our core product?
• What supplementary elements augment this
core?
• What product benefits create the most value for
customers?
• How can we differentiate our service offering
from the competition’s?
• How should we go about designing new
services? 5
 Molecular Model of
Passenger Airline Service
Distribution
Price

Service Vehicle
frequency

Transport In-flight
service
Pre and
post-flight Food
service and
drink

KEY

Tangible elements Marketing Positioning

(Weighted toward evidence) 6
Intangible elements Source: Shostack
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
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– enhancing the value and appeal of the core
 The Flower of Service:
Core plus Supplementary Services

Information

Payment Consultation

Billing Core Order-Taking

Exceptions Hospitality

KEY:
Safekeeping
Facilitating
8
Enhancing
Facilitating Services - Information

Customers often require

information about how to
Cor
Core obtain and use a product or
e
service. They may also need
reminders and documentation

9
Facilitating Services - Order Taking

Many goods and services

must be ordered or reserved in
Cor
Core
advance. Customers need to
e know what is available and may
want to secure commitment to
delivery

10
 Facilitating Services - Billing

“How much do I owe you?”

Cor
Customers deserve clear,
Core
e accurate and intelligible bills
and statements

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Facilitating Services - Payment

Customers may pay faster

Cor
and more cheerfully if you
Core
e make transactions simple
and convenient for them

12
Enhancing Services - Consultation

Value can be added to goods

and services by offering advice
Cor
Core and consultation that are
e
tailored to each customer’s
needs and situation

13
Enhancing Services - Hospitality

Customers who invest time

and effort in visiting a
business and using its
Cor
Core
e
services deserve to be
treated as welcome guests
(after all, marketing invited
them there!)

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Enhancing Services - Safekeeping

Customers prefer not to

worry about looking after
the personal possessions
Cor
Core that they bring with them
e to a service site; they also
expect firms to help care
for the goods that they
purchase or rent.

15
Enhancing Services - Exceptions

Customers appreciate some

flexibility in a business
Cor
Core when they make special
e requests. They expect it
when not everything goes
according to plan

16
 The secondary service
• Differentiating features of the service:
– features
– styling
– packaging
– branding
– physical evidence
– service delivery
– people
– quality
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 Service Blueprinting: Key Components
(Where appropriate, show Fail Points, risk of Excessive Waits)
1. Define standards for frontstage activities
2. Specify physical evidence
3. Identify principal customer actions
4. ------------line of interaction (customers and frontstage personnel)--------
5. Frontstage actions by customer-contact personnel
6. ------------line of visibility (between front stage and backstage)--------------
7. Backstage actions by customer contact personnel
8. Support processes involving other service personnel
9. Support processes involving IT 18
 Flowcharts of Alternative Meal
Delivery Options
Fast-Food Park & Order meal Pick up Find table
Restaurant See sign
enter & pay meal & eat
(eat in)

Drive-In Stop car Order via Get meal

Drive away,
See sign at micro- at
Restaurant order point phone pickup, pay
eat in car
(Take Out)

Order food, Delivery Pay

Home Telephone
give boy rings delivery boy Eat
Delivery Restaurant
address doorbell take food

Home Arrange to Plan menu Food & Meal

meet pay staff prepared Eat
Catering caterer deposit arrive & served
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