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Essentials of Services Marketing,
2nd Edition
Instructor Supplements
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
3
Developing Service Product:
Core and Supplementary Elements
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
4
Chapter 4 Outline
4.1 The Flower of Service
4.2 Facilitating Supplementary Services
4.3 Enhancing Supplementary Services
4.4 Branding Service Products and Experiences
4.5 New Service Development
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
5
4.1
The Flower of Service
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
6
4.1 The Flower of Service
A core product surrounded by cluster of
supplementary services (Fig. 4.2) (1)
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
7
4.1 The Flower of Service
• 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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
8
4.1 The Flower of Service
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
9
4.1 The Flower of Service
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
10
4.2
Facilitating Supplementary Services
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
11
4.2 Facilitating Supplementary Services
Examples of Information
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
12
4.2 Facilitating Supplementary Services
Examples of Information
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
13
4.2 Facilitating Supplementary Services
Examples of Information
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
14
4.2 Facilitating Supplementary Services
Examples of Information
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
15
4.3
Enhancing Supplementary Services
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
16
4.3 Enhancing Supplementary Services
Examples of Consultation
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
17
4.3 Enhancing Supplementary Services
Examples of Consultation
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
18
4.3 Enhancing Supplementary Services
Examples of Consultation
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
19
4.3 Enhancing Supplementary Services
Examples of Consultation
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
20
4.3 Enhancing Supplementary Services
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
21
4.4
Branding Service Products and Experiences
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
22
4.4 Branding Service Products and Experiences
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
23
4.4 Branding Service Products and Experiences
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
24
4.4 Branding Service Products and Experiences
Spectrum of Branding Alternatives (Fig 4.16)
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
25
4.4 Branding Service Products and Experiences
Example: British Airways Subbrands
• British Airways offers seven distinct air travel products
– Four intercontinental offerings:
○ First (deluxe service)
○ Club World (business class)
○ World Traveller Plus (premier economy class)
○ World Traveller (economy class)
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
26
4.4 Branding Service Products and Experiences
Example: British Airways Subbrands
– Two intra-European offerings:
○ Club Europe (business class)
○ Euro-Traveller (economy class)
○ UK Domestic (economy class between London and major British
cities
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
27
4.4 Branding Service Products and Experiences
Offering a Branded Experience (1)
• Branding can be used at both company and product levels
• Corporate brand:
– Easily recognized
– Holds meaning to customers
– Stands for a particular way of doing business
• Product brand:
– Helps firm establish mental picture of service in consumers’
minds
– Helps clarify value proposition
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
28
4.4 Branding Service Products and Experiences
Offering a Branded Experience (2)
• Four key ways to build strong brands
– Dare to be different
– Determine your own fame
– Make an emotional connection
– Internalize the brand
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
29
4.4 Branding Service Products and Experiences
Building Brand Equity (Fig. 4.19)
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
30
4.5
New Service Development
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
31
4.5 New Service Development
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
32
4.5 New Service Development
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
33
4.5 New Service Development
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
34
4.5 New Service Development
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
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
35
Summary of Chapter 4:
Developing Service Concepts (1)
• Flower of service includes core product and two types of
supplementary services: facilitating and enhancing
– Facilitating services include information, order taking, billing, and
payment
– Enhancing services include consultation, hospitality, safekeeping,
and exceptions
• Spectrum of branding alternatives exists for services
– Branded house
– Subbrands
– Endorsed brands
– House of brands
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
36
Summary of Chapter 4:
Developing Service Concepts (2)
• Seven categories of new services:
– Style changes
– Service improvements
– Supplementary service innovations
– Process-line extensions
– Product-line extensions
– Major process innovations
– Major service innovations
• Success factors in new service development:
– Market synergy
– Organizational factors
– Market research factors
Thank you

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service marketing Essentials of Services Marketing,2nd Edition

  • 1.
  • 2. Essentials of Services Marketing, 2nd Edition Instructor Supplements
  • 3. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 3 Developing Service Product: Core and Supplementary Elements
  • 4. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 4 Chapter 4 Outline 4.1 The Flower of Service 4.2 Facilitating Supplementary Services 4.3 Enhancing Supplementary Services 4.4 Branding Service Products and Experiences 4.5 New Service Development
  • 5. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 5 4.1 The Flower of Service
  • 6. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 6 4.1 The Flower of Service A core product surrounded by cluster of supplementary services (Fig. 4.2) (1)
  • 7. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 7 4.1 The Flower of Service • 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
  • 8. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 8 4.1 The Flower of Service 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
  • 9. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 9 4.1 The Flower of Service 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
  • 10. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 10 4.2 Facilitating Supplementary Services
  • 11. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 11 4.2 Facilitating Supplementary Services Examples of Information
  • 12. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 12 4.2 Facilitating Supplementary Services Examples of Information
  • 13. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 13 4.2 Facilitating Supplementary Services Examples of Information
  • 14. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 14 4.2 Facilitating Supplementary Services Examples of Information
  • 15. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 15 4.3 Enhancing Supplementary Services
  • 16. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 16 4.3 Enhancing Supplementary Services Examples of Consultation
  • 17. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 17 4.3 Enhancing Supplementary Services Examples of Consultation
  • 18. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 18 4.3 Enhancing Supplementary Services Examples of Consultation
  • 19. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 19 4.3 Enhancing Supplementary Services Examples of Consultation
  • 20. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 20 4.3 Enhancing Supplementary Services 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
  • 21. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 21 4.4 Branding Service Products and Experiences
  • 22. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 22 4.4 Branding Service Products and Experiences 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
  • 23. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 23 4.4 Branding Service Products and Experiences 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
  • 24. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 24 4.4 Branding Service Products and Experiences Spectrum of Branding Alternatives (Fig 4.16)
  • 25. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 25 4.4 Branding Service Products and Experiences Example: British Airways Subbrands • British Airways offers seven distinct air travel products – Four intercontinental offerings: ○ First (deluxe service) ○ Club World (business class) ○ World Traveller Plus (premier economy class) ○ World Traveller (economy class)
  • 26. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 26 4.4 Branding Service Products and Experiences Example: British Airways Subbrands – Two intra-European offerings: ○ Club Europe (business class) ○ Euro-Traveller (economy class) ○ UK Domestic (economy class between London and major British cities
  • 27. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 27 4.4 Branding Service Products and Experiences Offering a Branded Experience (1) • Branding can be used at both company and product levels • Corporate brand: – Easily recognized – Holds meaning to customers – Stands for a particular way of doing business • Product brand: – Helps firm establish mental picture of service in consumers’ minds – Helps clarify value proposition
  • 28. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 28 4.4 Branding Service Products and Experiences Offering a Branded Experience (2) • Four key ways to build strong brands – Dare to be different – Determine your own fame – Make an emotional connection – Internalize the brand
  • 29. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 29 4.4 Branding Service Products and Experiences Building Brand Equity (Fig. 4.19)
  • 30. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 30 4.5 New Service Development
  • 31. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 31 4.5 New Service Development 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
  • 32. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 32 4.5 New Service Development 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
  • 33. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 33 4.5 New Service Development 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
  • 34. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 34 4.5 New Service Development 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
  • 35. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 35 Summary of Chapter 4: Developing Service Concepts (1) • Flower of service includes core product and two types of supplementary services: facilitating and enhancing – Facilitating services include information, order taking, billing, and payment – Enhancing services include consultation, hospitality, safekeeping, and exceptions • Spectrum of branding alternatives exists for services – Branded house – Subbrands – Endorsed brands – House of brands
  • 36. © Pearson Education South Asia Pte Ltd 2013. All rights reserved 36 Summary of Chapter 4: Developing Service Concepts (2) • Seven categories of new services: – Style changes – Service improvements – Supplementary service innovations – Process-line extensions – Product-line extensions – Major process innovations – Major service innovations • Success factors in new service development: – Market synergy – Organizational factors – Market research factors