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MKT 346: Marketing of ServicesDr. Houston
Chapter 4:
Developing Service Products(Core and Supplemen tal Elements)
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Service Product
A service product comprises all elements ofservice performance, both tangible andintangible, that create value for customers
The service concept is represented by:
A core product
Accompanied by supplementary services
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Designing a Service Concept (1)
Core Product
Supplementary Services
Delivery Processes
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Designing a Service Concept
Service concept design must address thefollowing issues:
Delivery of service components to customer
Customers role in those processes
How long delivery lasts
The recommended level and style of service
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Integration of Core Product, SupplementaryElements and Delivery Process (Fig. 4.3)
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The Flower of Service (Fig 4.4)
Core
Information
Consultation
Order-Taking
Hospitality
Payment
Billing
Exceptions
Safekeeping
KEY:Enhancing elements
Facilitating elements
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The Flower of Service:Supplementary Services
Two kinds of supplementary services
Facilitating
Enhancing
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Supplementary Services
Facilitating
Information
Order-Taking
Billing
Payment
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Supplementary Services
Enhancing
Consultation
Hospitality
Safekeeping
Exceptions
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Managerial ImplicationsRegarding Supplementary Services
Not every core product is surrounded by
supplementary elements from alleight clusters
Nature of product helps to determine:
Which supplementary services mus tbe offered
Which migh tusefully be added to enhance value
People-processing and high contact services tendto have more supplementary services
Firms that offer different levels of service oftenadd extra supplementary services for eachupgrade in service level
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Service Products
A service product implies a defined and consistentbundle of output
Firms should differentiate their bundle of outputfrom those of competitors
Providers of more intangible services also offer a
menu of products
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Product Lines And Brands
Most service organizations offer a line ofproducts 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
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Product Lines And Brands
One brand name applied tomultiple service offerings
CorporateBrand
Corporate brand is main
Product brand also usedSub-Brand
Product brand is main focus
Corporate brand still featured
Endorsed
Brand
House ofBrands
Many product brands housed under
one brand
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Offering a Branded Experience (1)
Branding can be used at company& produc tlevels
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 inconsumers minds
Helps clarify value proposition
A Hi h f
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A Hierarchy ofNew Service Categories
1. Style changes
2. Service improvements
3. Supplementary service innovations
4. Process-line extensions
5. Product-line extensions
6. Major process innovations
7. Major service innovations
Achieving Success
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Achieving Successin Developing New Services
In the development of new services: Key is the ability to maintain quality of totalservice offering
Core product is of secondary importance
Marketing support activities are critical
Market knowledge is also of utmost importance
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Key Success Factorsin New Service Development
Market synergy
Organizational factors
Market research factors
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MKT 346 Key Concepts: Chapter 4
Creating services involves: designing core product,
supplementary services, and delivery process
Flower of service
Two types of supplementary services
Spectrum of branding alternatives for services
Seven categories (hierarchy) of new services
Three key success factors in new service development:market synergy, organizational factors, market research
factors
