History Class XII Ch. 3 Kinship, Caste and Class (1).pptx
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Chapter 03
1. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 1
Chapter 3:
Developing
Service Concepts:
Core and
Supplementary Elements
2. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 2
Overview of Chapter 3
1. Planning and Creating Services*
2. The Flower of Service*
3. Planning and Branding Service Products
4. Development of New Services
3. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 3
1.Planning and Creating Services
a) Design a Service Concept
b) Document Delivery Sequence
over Time
c) Flowchart Service Delivery
4. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 4
Planning and Creating Services
ī§ A service product comprises all elements of
service performance, both tangible and
intangible, that create value for customers
ī§ The service concept is represented by:
īA core product
īAccompanied by supplementary services
5. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 5
Core Products and
Supplementary Services
ī§ In mature industries, core products often
become commodities
ī§ Supplementary services help to
differentiate core products and create
competitive advantage by:
īFacilitating use of core product (a service
or a good)
īEnhancing the value and appeal of the
core product
6. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 6
a) Designing a Service Concept
ī§ Core Product
ī Central component that supplies the principal, problem-solving
benefits customers seek
ī§ Supplementary Services
ī Augment the core product, facilitating its use and enhancing its
value and appeal
ī§ Delivery Processes
ī Used to deliver both the core product and each of the
supplementary services
7. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 7
Core and Supplementary Product Design:
An Integrated Perspective (Fig 3.2)
Scheduling
Nature of
Process
Service
Level
Customer
Role
Supplementary
services offered
and delivered
Delivery Concept
for Core Product
8. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 8
Core and Supplementary Services at Luxury Hotel
(Offering Much More than Cheap Motel!)
Reservation
Valet
Parking
Reception
Baggage
Service
Cocktail
Bar
Restaurant
Entertainment/
Sports/Exercise
Internet
Wake-up
Call
Room
Service
Business
Center
Cashier
A Bed forthe
Night in an Elegant
Private Roomwith
a Bathroom
9. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 9
Defining Core and Supplementary
Elements of Our Service Product
ī§ How is our core product defined and what
supplementary elements augment it?
ī§ What product benefits create most value for
customers?
ī§ What are current levels of service on core product
and each supplementary element?
ī§ Can we charge more for higher service levels? For
example:
ī§ Alternatively, should we cut service levels and
charge less?
10. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 10
b) Documenting Delivery Sequence
Over Time
ī§ Must address sequence in which customers will
use each core and supplementary service
ī§ Determine length of time for each step
ī§ Information should reflect good understanding
of customers, especially their:
īNeeds
īHabits
īExpectations
ī§ Question: Do customersâ expectations change
during service delivery in light of perceived
quality of each sequential encounter?
11. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 11
What Happens, When, in What Sequence?
Time Dimension in Augmented Product (Fig 3.3)
Before Visit
Reservation
internet
Parking Get car
Check in
Porter
Use
room
Meal
Pay TV
Room service
Internet
Check out
Time Frame of An Overnight Hotel Stay
(Real-time service use)
USE GUESTROOM OVERNIGHT
Internet
12. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 12
c) Flowcharting Service Delivery
ī§ Offers way to understand totality of customerâs
service experience
ī§ Useful for distinguishing between core product
itself and service elements that supplement core
ī Restaurants: Food and beverage (core)
ī Reservations (supplementary services)
ī§ Shows how nature of customer involvement with
service organizations varies by type of service:
ī People processing
ī Possession processing
ī Mental Stimulus processing
ī Information processing
13. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 13
Simple Flowchart for Delivery of a
People-Processing Service (Fig 3.4)
Park Car Check In
Spend
Night in
Room
Breakfast Check
Out
Breakfast
Prepared
Maid Makes
up Room
People Processing â Stay at Motel
14. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 14
Simple Flowchart for Delivery of a
Possession-Processing Service (Fig 3.4)
Possession Processing â Repair a DVD Player
Travel to
Store
Technician Examines
Player, Diagnoses
Problem
Leave
Store
Return, Pick up
Player and Pay
Technician Repairs Player
(Later) Play
DVDs at Home
15. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 15
Simple Flowchart for Delivery of Mental
Stimulus-Processing Service (Fig 3.4)
Mental Stimulus Processing â Weather Forecast
Turn on TV, Select
Channel
View Presentation of
Weather Forecast
TV Weatherperson
Prepares Local
Forecast
Confirm Plans for
Picnic
Meteorologists Input Data
to Models and Creates
Forecast from Output
Collect
Weather
Data
16. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 16
Simple Flowchart for Delivery of An
Information-Processing Service (Fig 3.4)
Information Processing â Health Insurance
Learn about
Options
Select Plan,
Complete Forms
Pay
Customer Information
Entered in Database
Printed Policy
Documents
Arrive
Insurance
Coverage Begins
University and Insurance
Company Agree on Terms of
Coverage
17. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 17
2. The Flower of Service (Fig 3.6)
Core
Information
Consultation
Order Taking
Hospitality
Payment
Billing
Exceptions
Safekeeping
Facilitating elements
Enhancing elements
KEY:
18. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 18
The Flower of Service:
Facilitating ServicesâInformation
Core
Customers often require
information about how to obtain
and use a product or service.
Examples of elements:
ī§ Directions to service site
ī§ Schedule/service hours
ī§ Prices
ī§ Conditions of sale
ī§ Usage instructions
19. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 19
The Flower of Service:
Facilitating ServicesâOrder Taking
Core
Customers need to know what
is available and may want to
secure commitment to
delivery. The process should
be fast and smooth.
Examples of elements:
ī§ Applications
ī§ Order entry
ī§ Reservations and check-in
20. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 20
The Flower of Service:
Facilitating ServicesâBilling
Core
âHow much do I owe you?â
Bills should be clear,
Accurate, and intelligible.
Examples of elements:
ī§ Periodic statements of
account activity
ī§ Machine display of amount
due
21. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 21
The Flower of Service:
Facilitating ServicesâPayment
Core
Customers may pay faster
and more cheerfully if you
make transactions simple
and convenient for them.
Examples of elements:
ī§ Self service payment
ī§ Direct to payee or intermediary
ī§ Automatic deduction
22. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 22
Core
The Flower of Service:
Enhancing ServicesâConsultation
Value can be added to goods
and services by offering advice
and consultation tailored to
each customerâs needs and
situation.
Examples of elements:
ī§ Customized advice
ī§ Personal counseling
ī§ Management consulting
23. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 23
The Flower of Service:
Enhancing ServicesâHospitality
Customers who invest time and
effort in visiting a business and
using its services deserve to be
treated as welcome guestsâ
after all, marketing invited them!
Examples of elements:
ī§ Greeting
ī§ Waiting facilities and amenities
ī§ Food and beverages
ī§ Toilets and washrooms
ī§ Security
Core
24. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 24
Core
The Flower of Service:
Enhancing ServicesâSafekeeping
Customers prefer not to worry
about looking after the personal
possessions that they bring
with them to a service site.
Examples of elements:
ī§ Looking after possessions
customers bring with them
ī§ Caring for goods purchased
(or rented) by customers
25. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 25
Core
The Flower of Service:
Enhancing ServicesâExceptions
Customers appreciate some
flexibility when they make
special requests and expect
responsiveness when things
donât go according to plan.
Examples of elements:
ī§ Special requests in advance
ī§ Complaints or compliments
ī§ Problem solving
ī§ Restitution
26. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 26
Managerial Implications
ī§ To develop product policy and pricing strategy,
managers need to determine:
īWhich supplementary services should be offered
as a standard package or as options
ī§ Firms that compete on a low-cost, no-frills basis
needs fewer supplementary elements
ī§ Each flower petal must receive consistent care
and concern to remain fresh and appealing
27. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 27
How to Determine What Supplementary
Services Should Be Offered
ī§ Nature of product helps to determine:
īWhich supplementary services must be offered
īWhich might usefully be added to enhance value
ī§ People-processing and high-contact services tend
to have more supplementary services
ī§ Market positioning strategy helps to determine
which supplementary services should be included
28. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 28
3. Planning and Branding Service
Products
29. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 29
Service Products
ī§ A service product: A defined and consistent
âbundle of outputâ
ī§ Service firms can differentiate their products in
similar fashion to various âmodelsâ offered by
manufacturers
ī§ Providers of more intangible services also offer a
âmenuâ of products
īRepresent an assembly of elements that are built
around the core product
īMay include certain value-added supplementary
services
30. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 30
Product Lines and Brands
ī§ Most service organizations offer a line of products rather
than just a single product
ī§ They may choose among three broad alternatives:
ī Single brand to cover all products and services
ī A separate, stand-alone brand for each offering
ī Some combination of these two extremes
31. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 31
Spectrum of Branding Alternatives
(Fig 3.8)
âHouse of Brandsâ
e.g., P&G
Corporate
Branding
Individual Product
Branding
âBranded
Houseâ
e.g., Virgin Group
Sub-brands
e.g., Raffles Class at
Singapore Airlines
Endorsed Brands
e.g., Courtyard
by Marriott
Source: Derived from Aaker and Joachimsthaler
32. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 32
Example: British Airways Sub-brands
ī§ British Airways offers six distinct air travel products
ī Four intercontinental offerings:
â First (deluxe service)
â Club World (business class)
â World Traveller Plus (premier economy class)
â World Traveller (economy class)
ī Two intra-European offerings:
â Club Europe
â Euro-Traveller
33. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 33
Offering a Branded Experience (1)
ī§ Branding can be employed at both corporate and product levels
ī§ Corporate brand:
ī Easily recognized
ī Holds meaning to customers
ī Stands for a particular way of doing business
ī§ Product brand:
ī Helps firm communicate distinctive experiences and benefits
associated with a specific service concept
ī§ Moving toward branded customer experience includes:
ī Create brand promise
ī Shape truly differentiated customer experience
ī Give employees skills, tools, and supporting processes to deliver
promise
ī Measure and monitor
34. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 34
Offering a Branded Experience (2)
âThe brand promise or value proposition
is not a tag line, an icon, or a color or a
graphic element, although all of these
may contribute. It is, instead, the heart
and soul of the brandâĻ.â
Don
Schultz
35. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 35
4. Developing New Services
36. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 36
A Hierarchy of
New Service Categories (1)
1. Major service innovations
ī New core products for previously undefined markets
1. Major process innovations
ī Using new processes to deliver existing products with added
benefits
1. Product-line extensions
ī Additions to current product lines
1. Process-line extensions
ī Alternative delivery procedures
37. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 37
A Hierarchy of
New Service Categories (2)
5. Supplementary service innovations
ī Addition of new or improved facilitating or enhancing elements
6. Service improvements
ī Modest changes in the performance of current products
7. Style changes
ī Visible changes in service design or scripts
38. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 38
Reengineering Service Processes
ī§ involves analyzing and redesigning processes to
achieve faster and better performance
īRunning tasks in parallel instead of sequence
can reduce/eliminate dead time
ī§ Examination of processes can lead to creation
of alternative delivery methods
īAdd/eliminate supplementary services
īResequence delivery of service elements
īOffer self-service options
39. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 39
Physical Goods as a Source Of
New Service Ideas
ī§ Services can be built around rentals:
Alternatives to owning a physical good
and/or doing work oneself
īCustomers can rent goodsâuse and return
for a feeâinstead of purchasing them
īCustomers can hire personnel to operate
own or rented equipment
ī§ Any new durable good may create need for
after-sales services now and in futureâ
possession processing
40. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 40
Creating Services as Substitutes for
Owning and/or Using Goods (Fig 3.10)
ī§Drive Own Car
ī§Use Own Computer
ī§Rent a Car and Drive
it
ī§Rent Use of
Computer
ī§Hire a Chauffeur to
Drive
ī§Hire a Typist to Type
ī§Hire a Taxi or
Limousine
ī§Send Work Out to a
Secretarial Service
Own a Physical Good
Rent Use of a
Physical Good
Perform Work
Oneself
Hire Someone
to Do Work
41. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 41
Achieving Success in Developing
New Services
ī§ In developing new services
īCore product is of
secondary importance
īAbility to maintain quality
of the total service
offering is key
īAccompanying marketing
support activities are vital
īMarket knowledge is of
utmost importance
42. Slide Š 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 42
Success Factors in
New Service Development
ī§ Market synergy
ī Good fit between new product and firmâs image/resources
ī Advantage versus competition in meeting customersâ needs
ī Strong support from firm during/after launch
ī Firm understands customer purchase decision behavior
ī§ Organizational factors
ī Strong interfunctional cooperation and coordination
ī Internal marketing to educate staff on new product and its
competition
ī Employees understand importance of new services to firm
ī§ Market research factors
ī Scientific studies conducted early in development process
ī Product concept well defined before undertaking field studies