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1. CHAPTER
4 developing service products:
CORE and
SUPPLEMENTARY
ELEMENTS
LEARNING OBJECTIVES
By the end ofthis chapter, students should be able:
LO 1
LO 2
LO 3
Define what a service product is.
Know how to design a service
concept.
Describe the flower of service
and know how the facilitating
and enhancing supplementary
services relate to the core
product.
LO 4
LO 5
LO 6
Know how service firms use
different branding strategies
for their product lines.
List the categories of new
service development, ranging
from simple style changes to
major innovations.
Be familiar with the factors
needed to achieve success in
developing new services.
OPENING VIGNETTE1
Figure 4.1 Starbucks is a familiar
brand that even has traditional tea
consumers drinking out of its cups.
As you walk along the street, the aroma drifts through the air and attracts you. It is
drawing you toward the store with the green sign that has now become a common
sight. You enter Starbucks, the place where you can sit down and enjoy a great cup
of coffee in a comfortable settee or on a chair. You can also surf the Internet on the
free wireless broadband service that is available in many of the Starbucks outlets
around the world. Starbucks is a place that you would associate with coffee, before
anything else.
84 Chapter 4• Developing Service Products: Core and Supplementary Elements

2. II
T
A
R
P
PARTII
As a service innovation, Starbucks has been transforming itself into a place for
entertainment. It wants to extend the pop culture. It does that through Hear Music
Starbucks. Customers can buy from an extensive selection of hand-selected and
compiled physical CDs in the Starbucks Hear Music Coffeehouses. Alternatively,
they can burn personalized CDs from a digital inventory of more than a million
sound tracks, including new recordings that can only be found in some Starbucks
outlets. Debut albums of some new musicians are actually launched and available
only exclusively at Starbucks outlets. Starbucks also sells movie DVDs and books
from emerging as well as established authors. It has tied up with Apple’s iTunes Wi-
Fi Music Store to allow music playing at selected Starbucks cafes, up to the last ten
songs played, to be browsed, bought and downloaded wirelessly onto the iPhone
or iPod. This music will sync back to the Mac or PC the next time it is connected.
Soon, we will no longer associate Starbucks with just mocha. Rather, we will see
it as a place to relax and feel at home. Starbucks is a company that has developed
new service innovations with great success. However, it cannot rest on its laurels
as competition is intense. It has to continue to reinvent itself to maintain its edge in
the industry.
...One of the
trendsetters of
lifestyle services,
Starbucks has
popularized the
coffeehouse as
contemporary
and chic...
Applying the 4Ps to Services 85