THE MINISTRY OF FINANCE

UNIVERSITY OF FINANCE - MARKETING

FACULTY OF MARKETING
••••••••••

Course name: Services Marketing (2421702071810)

PRESENTATION REPORT
Lecturer’s name: Ms. Pham Thi Lan Phuong

Student’s name:

1. Le Nguyen Ngoc Bich - 2221001511

2. Vo Tien Dat - 2221001538

3. Pham Thi Thanh Huong - 2221001592

4. Phan Huynh Bao Han - 2221001568

5. Nguyen Thi Minh Thu - 2221001820

6. Pham Nguyen Hai Dang - 2221001531

HO CHI MINH CITY - 2024

TASKS ASSIGNMENT TABLE

Preparing content and Level of

Full name Student code
presentation completion

Nguyen Thi Planning and Creating

2221001820 100%
Minh Thu Service

Pham Nguyen The Flower of Service

2221001531 100%
Hai Dang

The Flower of Service

Vo Tien Dat 2221001538 100%

Phan Huynh Branding Service Products

2221001568 and Experiences 100%
Bao Han

Pham Thi New Service Development

2221001592 100%
Thanh Huong

New Service Development

Le Nguyen and 5 approaches to quality of
2221001511 100%
Ngoc Bich David Garvin

1
Table of Contents
1. Planning and Creating Service: ........................................................................................... 4
1.1 Service Product: .......................................................................................................... 4
1.2 Designing the Service concept: .................................................................................. 4
1.2.1 Core product ........................................................................................................... 4
1.2.2 Supplementary Services ......................................................................................... 4
1.2.3 Delivery Processes .................................................................................................. 5
1.3 Documentary delivering sequence over time and Temporal Dimension to
Augmented Product ................................................................................................................ 5
2. The Flower of Service: ........................................................................................................ 6
2.1 Facilitating elements ................................................................................................... 7
2.1.1 Information ............................................................................................................. 7
2.1.2 Order Taking ........................................................................................................... 8
2.1.3 Billing ..................................................................................................................... 8
2.1.4 Payment .................................................................................................................. 9
2.2 Enhancing elements: ................................................................................................... 9
2.2.1 Consultation .......................................................................................................... 10
2.2.2 Hospitality ............................................................................................................ 10
2.2.3 Safekeeping .......................................................................................................... 11
2.2.4 Exceptions ............................................................................................................ 12
3. Managerial Implications .................................................................................................... 13
3.1 Core service products don't necessarily have complementary elements. ................. 13
3.2 Nature of product helps determine supplementary services offered to enhance value
13
3.3 People-processing and high contact services have more supplementary services ... 14
3.4 Different levels of service can add extra supplementary services for each upgrade in
service level .......................................................................................................................... 15
3.5 Low-cost, no-frills basis firms needs fewer supplementary elements ...................... 15
4. Branding Service Products and Experiences ..................................................................... 16
4.1 Service Products, Product Lines, and Brands ........................................................... 16
4.1.1 Service Product: A defined and consistent “bundle of output” ............................ 16
4.1.2 Product Line: Most service organizations offer a line of productsrather than just a
single product. ................................................................................................................... 17
4.1.3 Three broad alternatives for product lines: ........................................................... 18

2
 4.2 Spectrum of Branding Alternatives .......................................................................... 19
4.2.1 Branded house ...................................................................................................... 19
4.2.2 Sub-brands ............................................................................................................ 20
4.2.3 Endorsed brands ................................................................................................... 20
4.2.4 House of brands .................................................................................................... 20
4.3 Tiering Service Product with Branding .................................................................... 20
4.4 Offering a Branded Experience ................................................................................ 21
4.5 Moving Towards a Branded Experience................................................................... 21
5. New Service Development ................................................................................................ 22
5.1 A Hierarchy of New Service Categories................................................................... 22
5.1.1 Style Changes: ...................................................................................................... 22
5.1.2 Service Improvements: ......................................................................................... 23
5.1.3 Supplementary Service Innovations: .................................................................... 23
5.1.4 Process-line Extensions: ....................................................................................... 24
5.1.5 Product Line Extensions: ...................................................................................... 24
5.1.6 Major Process Innovations: .................................................................................. 24
5.1.7 Major Service Innovations: .................................................................................. 25
5.2 Reengineering Service Processes ............................................................................. 25
5.3 Physical Goods as a Source of New Service Ideas ................................................... 29
5.3.1 Goods and services can become competitive alternatives if they offer the same
primary benefits................................................................................................................. 29
5.3.2 To get a new service idea, we should also consider providing an alternative to
possessing physical goods that can the desired results ..................................................... 29
5.3.3 Another way, we can create services that come with physical products. ............. 30
5.4 Creating Services as Substitutes for Physical Good ................................................. 30
5.5 Using research to design new services ..................................................................... 31
5.6 Achieving success in developing new services ........................................................ 32

3
 TOPIC 4: SERVICE PRODUCTS: CORE AND
SUPPLEMENTARY ELEMENTS
1. Planning and Creating Service:
1.1 Service Product:
- Service Product: a mix of tangible products and intangible services designed and
combined so that they are jointly capable of fulfilling final customer needs. Service
Products consist of both physical and intangible elements, that create value for
customers.
Ex: Renting a hotel room
Physical elements: provide accommodation service
Intangible elements: include reservation, parking, entertainment, meal…
1.2 Designing the Service concept:
- Designing the service concept is the process of identifying and planning a new service
or improving an existing service.It defines the how and what of the service design, and
help mediate between customer needs and an service’s strategic intent and creating a
plan to deliver the service. It is used to create a service that satisfy customer needs. The
value proposition must address and integrate 3 components:
1.2.1 Core product
Core product: Central component that supplies the principal, problem-solving benefits
customers seek
Ex: When going to a restaurant to dine, the core product is the food, or when renting a
hotel room, customers "purchase" shelter and safety.
1.2.2 Supplementary Services
Supplementary Services: One product is often included many other service-related
activities, which calls supplementary services. It augments the core product, facilitating
its use and enhancing its value. There are 2 types of Supplementary services:
• Facilitating: Either needed for service delivery, or help in the use of the core
product
• Enhancing: Add extra value for customer
Ex: Medical service at hospitals
• Facilitating: Information (provide information about medical equipment, team of
qualified dotors…), Make a schedule for medical service, Payment and Billing
• Enhancing: Consultation (Psychological counseling services for patients),
Safekeeping ( Security, Cleaning environment..)
4
 1.2.3 Delivery Processes
Delivery Processes: Used to deliver both the core product and each of the supplementary
services
Ex: Customers coming to the restaurant not only purchase and enjoy the food, they
"purchase" the service of the staff from parking, reception, to payment.
Service concept design must address the following İssues:
• How the different service components are delivered to the customer
• The nature of the customer's role in those processes
• How long delivery lasts: Identify factors that affect delivery times and
plan to optimize these times
• The recommended level and style of service to be offered
Example: An example of designing the service concept in the airline industry

1.3 Documentary delivering sequence over time and Temporal

Dimension to Augmented Product
Documenting the delivery sequence over time is an important aspect of follow-up
service. By creating a detailed service plan, service marketers can map out the step-by-
step process customers go through when interacting with a service, including frontstage
5
interactions that customers can see and the backstage that they cannot see. That process
includes steps:
- Must address sequence in which customers will use each core and supplementary
service
- Determine approximate length of time required for each step
- Information should reflect good understanding of customers, especially their:
• Needs
• Habits
• Expectations
Example:
- Temporal dimension to augmented product considers the influence of time on
augmeted product.
- Example: I get an example for the time chart for the incremental product of a busniness
classflight
+ The core product: Mobility, safety and way to save time
+ Supplementary service is provided in adđition to the core product consists of:
• Before visiting: make a reservation/booking
• When coming:
Before flight: parking, check in at the priority counter, Porter, using
guest room, privite airport suttle
During flight: Seating service, meal, private seating
• After flight: private airport shuttle, check out, get car
+ Delivering processes: security, payment..

2. The Flower of Service:

6
- Most businesses offer customers a benefits package that includes the core product and
supplementary services. Supplementary services are what make the difference, making
a business more successful than its competitors and able to achieve higher profits.
Supplementary services are expressed through the model “The flower of service”.
The flower of service model was invented by professor Christopher Lovelock of
Harvard University. In particular, the center of the flower is the core product and it is
surrounded by 8 petals corresponding to 8 types of supplementary services. The model
shows the optimal combination of services that businesses need to provide to customers
from creating demand until completion to optimize value for consumers and at the same
time build their brand loyalty. It is divided into two parts: enhancing elements and
facilitating elements. Facilitating elements consist of Information, Order-Taking,
Payment and Billing. Enhancing elements consist of Consultation, Hospitality,
Safekeeping and Exception

2.1 Facilitating elements

2.1.1 Information

- Example of information elements:

To obtain complete information about any goods or services, customers need relevant
information including basic details such as address, working hours, service packages,
7
terms, warnings, etc. These information should be posted on channels that customers
can actively access such as websites, fanpages, hotlines... Thanks to that, customers can
conveniently learn and make suitable choices according to their needs.
2.1.2 Order Taking

- Examples of Order Taking

The process of receiving service requests from customers. That can be immediate or pre-
booked requests, appointments, or reservations. Depending on the situation and
operating model, businesses should apply systems and information technology to
expedite the service process. At this stage, for example, with spa or restaurant
businesses, staff should encourage customers to make appointments in advance to
proactively allocate resources and prepare necessary personnel and equipment, in order
to provide a complete and seamless experience for customers.
2.1.3 Billing

8
- Examples of Billing Elements.
Billing is common for most services (unless the service is provided for free). Inaccurate,
unreadable, or incomplete invoices can disappoint customers. Customers usually expect
bills to be clear and informative and itermized in ways that make it clear how the total
was computed. A standard invoice should include customer information, time, service
location, and details of the expenses.
2.1.4 Payment

- Examples of Payment Elements

A variety of payment options exist, but all customers expect ease and convenience. Self-
service payment systems, for instance, require insertion of coins, ban- knotes, tokens, or
cards in machines.Currently, Currently there are popular forms of payment: self-service,
direct to payee or intermediary, automatic đeuction from financial deposits. Besides, e-
wallets are becoming increasingly popular among the young and dynamic customer
group. Therefore, if the target audience of the business is the young age group, it is
necessary to pay attention to setting up the system from the beginning.
2.2 Enhancing elements:

9
 2.2.1 Consultation
- This is one of the important steps in services with complex processes and nature, such
as: customized advice; personal counseling; tutoring/training in product use;
management or technical consulting; legal litigation services, medical surgery,
aesthetics... that require staff with specialized knowledge to be able to explain and
personalize the service for customers.
- For example, before deciding to purchase insurance, customers need to be advised to
determine which package is suitable for their needs, as well as to have a better
understanding of the terms and benefits after purchase…
When you go for a haircut, the barbers will recommend hairstyles that suit your face so
you can get the most beautiful hairstyle.
2.2.2 Hospitality

- Although it is an additional service, it is an essential element in any current business

model. Hospitality enhancement services include services that are designed to provide
10
comfort to the customer. These include Greeting; Food and beverages; Toilets and
washrooms; Waiting facilities and amenities; Transport; Security

- For example, restaurants or beauty salons will have welcoming staff at the door (they
can say: "Hello, Welcome") . In addition, it is necessary to arrange a relaxation waiting
room with cool towels, hot tea, and fruit. and create a pleasant scent space with
melodious music. This will relieve customers of the feeling of fatigue from waiting. This
additional service helps create a thoughtful, delicate, and high-end image in the minds
of customers.

2.2.3 Safekeeping

- Furthermore, to ensure customers can use the service with peace of mind, businesses
need to supplement the Safekeeping element - ensuring the safety of users and their
tangible assets. Safekeeping includes: Caring for Possessions Customer Bring with
Them such as: Child care, pet care; Parking for vehicles, valet parking; Coat rooms;
Baggage handling; Storage space; Safe deposit boxes; Security personnel and Caring
for Goods Purchased (or Rented) by Customers such as: Packaging; Pickup;
Transportation and delivery; Installation; Inspection and diagnosis; Cleaning;
Refueling; Preventive maintenance; Repair and renovation

- The most typical example is businesses arranging security guards to watch over
customers' vehicles and provide dressing rooms. In some spas or gyms, customers are
equipped with lockers and keys so they can have control over their belongings.

11
- Phuong Trang bus company will provide transfer services including dropping off and
picking up passengers to locations in the city such as: 204 Le Hong Phong, Ward 4,
District 5, HCM city

2.2.4 Exceptions

- And finally, there are Exceptions - employees need to be flexible in handling incidents
or special requests from customers. Clearly defined procedures help employees respond
promptly and effectively. There are several types of exceptions:
• Special requests. Customers can request services that deviate from the
usual operating procedures. Pre-trip requests often involve personal
needs, including childcare, dietary requirements, medical needs, religious
observance, and individual disabilities. Such requests are particularly
common in the tourism and hotel industry.
• Problem solving. Sometimes normal service transactions (or product
performance) do not go smoothly due to accidents, delays, equipment
malfunctions, or customers encountering difficulties in using the product.
• Handling complaints/suggestions/praise. This activity requires clearly
defined procedures. Customers will easily express dissatisfaction, make
suggestions for improvement, or convey praise, and service providers will
be able to provide appropriate and prompt feedback.
• Compensation. Many customers expect compensation for serious
performance failures; it can take the form of warranty repairs, legal
settlements, refunds, free services, or payment in other tangible forms.
- Example:
Dalat Hasfarm's flower shops will provide new flower bouquets to customers or refund
customers if the flowers are damaged upon delivery.
For example, when traveling, families with young children will want additional
babysitting services. That means, there will be staff in charge of playing and looking
after a certain group of children. Create conditions for parents to have more private time.
Especially families who combine work and travel.
In general, Managers need to monitor the level of exception requests. If there are many
exception requests, standard procedures need to be improved. For example, if a hotel

12
regularly receives requests for babysitting, it may be time for the hotel to add babysitting
services and a children's play area to meet customer service needs.
In short, the service flower model is an important theoretical basis to help businesses
develop, enhance, differentiate and optimize their services, thereby creating a
competitive advantage and survival in the service market.
3. Managerial Implications
3.1 Core service products don't necessarily have complementary
elements.

Ex: Psychological counseling services: Core service is listening and helping clients
solve psychological problems. Psychological counseling can be done without adding
any additional components such as medication, therapy, …

3.2 Nature of product helps determine supplementary services

offered to enhance value
Ex: Travel Services:

• Essence: Providing the travel experience to the customer.

• Supplementary services: airline, hotel, car rental...

13
In short, need to focus on service users to come up with the most effective solutions

3.3 People-processing and high contact services have more

supplementary services
Characteristics of high contact services:

• Direct interaction: Service providers and customers interact directly with each
other during service delivery.
• Quality of service depends on the human factor: The communication skills,
attitudes and professionalism of the service provider directly affect the quality of
service.

Ex: The restaurant is considered to be a high-contact service, so it needs Supplementary

services to attract customers such as: table service, free event organization, literature,
home delivery,...

On the contrary, the vending machine is a low-contact service, so it doesn't have any
Supplementary services.

14
 3.4 Different levels of service can add extra supplementary
services for each upgrade in service level
EX: Haidilao pursues professional and large-scale restaurant style, so it has many
customer care services such as: Table reservations, birthday parties, pastries, gifts, nail
making,...

3.5 Low-cost, no-frills basis firms needs fewer supplementary

elements

15
 4. Branding Service Products and Experiences
4.1 Service Products, Product Lines, and Brands
We have three terms to clarify: Service Products, Product Lines, and Brands

4.1.1 Service Product: A defined and consistent “bundle of output”

➔ Supported by supplementary services (assembly of elements that are built
around the core product)
➔ Differentiated by bundle of output
Restaurant: Output package includes food, beverages, customer service, restaurant
space, etc.

16
Hotel: Output package includes accommodation, amenities, customer service, etc.

4.1.2 Product Line: Most service organizations offer a line of

productsrather than just a single product.
- Product line is a group of products that are closely related because they operate in a
similar way, in the same business, marketing through the same stores. Businesses often
offer product lines to help increase brand awareness, increase loyalty, increase choice
for customers...
EX: Samsung Electronics: The Galaxy smartphone line includes the Galaxy S, Galaxy
Z, Galaxy A, Galaxy M,...

17
Converse: Chuck Taylor All-Stars, Chuck 70, One Star, Pro Leather, Jack Purcell…

4.1.3 Three broad alternatives for product lines:

➔ Single brand to cover all products and services

Advantages:

• Create consistency and strong brand identity.

• Save on marketing and advertising.
• Easy to manage and maintain.

Disadvantages:Advantages:

• Access to different market segments may be restricted.

• Difficulty distinguishing different products or services.
• May confuse customers about the nature of the product or service.
18
➔ A separate, stand-alone brand for each offering

Advantages:

• Allows to target different market segments with different products or services.

• Makes it easy to distinguish between different products or services.
• Create flexibility in developing new products or services

Disadvantages:

• It can be expensive marketing and advertising costs per brand.

• It makes it difficult to manage and maintain many brands.
• Could reduce overall brand recognition

Some combination of these two extremes

Advantages:
• Take advantage of both of the above strategies.
Disadvantages:
• Can be complicated in management and maintenance.
• A careful balance is needed between the benefits of these two strategies.

4.2 Spectrum of Branding Alternatives

4.2.1 Branded house

19
Branded house describes a strategy whereby a firm uses a single brand (usually its corporate
brand) to cover all its products. These can even be in unrelated fields.
4.2.2 Sub-brands
Sub-brands, for which the corporate or the master brand is the main reference point. The aim is
to use the corporate brand equity to support the sub-brands, whereby the corporate brand brings
meaning to the sub-brands.
4.2.3 Endorsed brands
Endorsed brands, the product brand dominates, but the corporate name is still featured.
4.2.4 House of brands
House of brands strategy which uses separate standalone brands for its offerings. This strategy
is used when product brands target different segments and differ in their positioning.

Brand Experience is considered as a customer response. It involves thinking, feeling,

perceiving and responding to everything from live marketing campaigns to large-scale
advertising campaigns and product launches.
The most famous brands that exist today have a strong focus on brand experience. In
particular, the big brands put a lot of emphasis on this experience. To enhance your
brand experience effectively, you need to ensure consistency in all the different elements
that make up your brand.

4.3 Tiering Service Product with Branding

In a number of service industries, branding is not only used for core service, but also to
clearly differentiate service levels. Often based on offering several price-based of
service concepts, each is based on packaging a distinctive level of service performant
across many attributes. This phenomenon, known as SERVICE TIERING, is
particularly evident in industries such as hotels, airline, car rental and computer
hardware,..

20
 4.4 Offering a Branded Experience
Branding can be employed at corporate and product levels Corporate brand:
➔ Easily recognized,
➔ Holds meaning to customers,
➔ Stands for a particular way of doing business
Product brand:
➔ Helps firm communicate distinctive experiences and benefits
associated with a specific service concept

As an expert: the experience directly affects the customer's perception of your brand.
For example, the more unique the experience the more satisfied the customer is and the
higher the level of loyalty to the brand. On the contrary, the worse the experience, the
more angry the customer gets and the one who goes doesn't come back.
4.5 Moving Towards a Branded Experience
And in order to move towards a branded Experience, we need to the following:

Create brand promise

Brand promises play an important role in building reputation and attracting customers
to the business. It represents the commitment of a business to its customers about the
values, benefits and experiences that they can expect when using a business product or
service.

21
For example :

To create a truly different customer experience (CX), need to move beyond the old
patterns and adopt innovative, customer-focused strategies.

1. Understand your customers:

2. Personalized experience:

3. Bringing convenience:

4. Build trust and loyalty:

5. Create emotions:

• Connect with your customers on an emotional level.

• Use storytelling to convey your message and connect with your customers.
• Create an enjoyable and memorable experience for your customers

To effectively fulfill the brand promise, they need to invest in equipping their employees
with the necessary skills, tools and processes. This includes: communication skills,
situation-solving skills,...

Finally, the company has to keep the situation up to date, measure, monitor so that the
plan to Brand Experience is effective and stable.

5. New Service Development

5.1 A Hierarchy of New Service Categories
5.1.1 Style Changes:
Visible changes in service design or scripts

Ex : Change the style of the website of the University of Finance and Marketing

22
Before: The old interface used flat and monotonous design, making it difficult for users
to focus on important information

After : The new interface uses a modern and intuitive design, making it easy for users
to focus on important information.

5.1.2 Service Improvements:

Modest changes in the performance of current products

Ex : upgrade hotel services in addition to room rental. A hotel provides a free airport
shuttle service for guests.

5.1.3 Supplementary Service Innovations:

Additions of new or improved facilitating or enhancing elements

Ex: Provide guidance and support to customers after they have purchased service.
23
 5.1.4 Process-line Extensions:
Alternative delivery procedures

Ex: Deploy chatbot system to answer customer questions and support customers 24/7.

5.1.5 Product Line Extensions:

Addition to current product lines

Ex: The internet service provider offers a new high-speed data plan.

5.1.6 Major Process Innovations:

Using new processes to deliver existing products with added benefits

Ex: Netflix Changing the way you watch movies and TV shows.
24
Old process: Rent tapes, buy DVD or watch movies on TV.

New process: Online subscription model gives users unlimited access to a huge store of
content for a monthly fee.

5.1.7 Major Service Innovations:

New core products for previously undefined markets

Ex : MobilePay and Apple Pay have changed the way people pay for goods and services
by allowing them to use smartphones instead of cash or credit cards.

5.2 Reengineering Service Processes

- Service processes affect customers and also cost, speed and productivity.
• Improve operational efficiency:
• Eliminate manual and unnecessary processes: Automation of manual processes
can save time, cost and error.

Ex : Retail companies:

Before: Manage manually by counting physical products and recording quantities on

paper.

After: Apply barcode scanner and warehouse management software. Employees scan
product barcodes to automatically update inventory.

25
• Improve service quality:

• Better respond to customer needs: Analyze customer needs to design services

that fit and better meet their expectations.

• Improve customer experience: Reduce waiting times, simplify procedures, and

provide a more friendly, professional service.

• Cost reduction:

26
 • Efficient use of resources

Ex: Businesses can collect surveys by using an online information gathering

system. This helps reduce printing costs, paperwork, and information collection
staff

- Reengineering – analyzing and redesigning processes to achieve faster and better

performance.
- In order for the restructuring to work as expected, there are a number of ways we can
test the processes that could lead to the creation of alternative distribution methods:
• Add or eliminate suplementary service

Ex : Hotel: + Morning buffet ; spa + babysitting

• Re-sequence delivery of service elements

Ex : Bank
• Traditional process: Customers come to the bank to make transactions such as
deposits, withdrawals, transfers, …
• Re - sequence:

27
 • ATM configuration: Customers can make simple transaction such as deposits,
withdrawals, account balance searches, etc.

•
• Online banking: Customers can perform more complex transactions such as
transfers, bill payments,…through a website or an online banking application.

• Offer self-service options

VD : automatic sales machine, qr payment, chatbot …

28
In short, in order to innovate and develop services, business owners need to bear in mind
the above. This is the key to attracting more customers and increasing their competitive
advantage in the market.
5.3 Physical Goods as a Source of New Service Ideas
5.3.1 Goods and services can become competitive alternatives if they
offer the same primary benefits.
This means that customers can choose between two or more different products to meet
the same needs.
Ex : Massage machine and massage service. On the one hand, services, on the other
hand, physical products. They all have the same function.

5.3.2 To get a new service idea, we should also consider providing an

alternative to possessing physical goods that can the desired results
Ex : Instead of buying a car, you can use technology services like Grab, Gojek,
BeCar, etc., to get around. This saves you on car purchases, maintenance, and
parking fees.

29
 5.3.3 Another way, we can create services that come with physical
products.
Ex: Gift buying service with gift wrapping and delivery service
Buy a washing machine with free warranty and repair service

5.4 Creating Services as Substitutes for Physical Good

- There are 2 type of Physical product: owned business product and rent use of physical
product
- There are 2 kinds of service providers: the business person and the person employed
by the business.
- By combining the above cases, we'll be able to organize the service.

30
 5.5 Using research to design new services
- Have you ever wondered If a company is designing a new service from scratch, how
can it figure out what features and price will create the best value for target customers?
It's hard to know without asking customers - hence the need for research.
- Design research is an implicit and inseparable aspect of service design. Conducting
design research is the foundation for building and developing any project. Insights, ideas
and issues are uncovered at every stage of the design process. However, insights need
to provide a clear route towards service propositions.
- Traditional research skills such as listening, observing and investigating alone are not
effective enough for service design. The approach needs to be collaborative, creative
and inspirational.
- During research, researchers can be goal-oriented and dig for insights that are
meaningful to service design from the outset. As service design aims to create a
symbiotic relationship between provider and user, research is designed to actively
involve and investigate all significant people in the service ecosystem. After all, the
outcomes of the research are ultimately to serve the creation of successful services.

- For instance, anyone who has ever used a taxi in a foreign city knows these fears: How
much will the trip cost? Does the taxi driver have a license at all or have I been caught
by a fraudster? Does the driver take the fastest route? Can I reach my destination at all?
31
How can I express my dissatisfaction with the driver's unfriendliness and unkempt
appearance? The two founders of Uber, Travis Kalanick and Garrett Camp, could not
ask themselves all these questions on a winter evening in Paris in 2008. Because they
couldn't get a taxi at all. The two decided to develop an app with which they could order
a car at the push of a button. The current app answers all the questions mentioned at the
beginning. However, Uber is constantly working on it to improve the driving experience
even further: Passengers can use a chat function to contact the driver directly without
revealing their telephone number. In this way, the company wants to further improve
the customer experience: Passengers can easily update trip information as well as
provide feedback on the situation.

5.6 Achieving success in developing new services

- How to successfully set up a new service? According to Harvard Business School
professor Clayton Christensen, there are over 30,000 new products introduced every
year, and 95 percent fail. Services are not immune to the high failure rates that plague
new manufactured products. The reasons for failure ranged widely, including not
meeting a demonstrable consumer need, inability to cover costs from revenues, and poor
execution.

- In developing new services:

• The core products is of only secondary importance, many innovations are in

supplementary services or service delivery.
• The quality of the total service offering and the marketing support that goes with
it are vital. (ability to maintain quality of the total service offering is key)
• Underlying success in these areas, Market knowledge is of utmost importance.
"Without an understanding of the marketplace, knowledge about customers, and

32
 knowledge about competitors, it is very unlikely that a new product will be a
success”.

Developing a new product is a complex process that requires a great deal of planning
and coordination. It involves many aspects, from concept design to product testing and
launch. To ensure success, it is essential to identify and understand the various factors
that can influence the success of a new product. They found that the three factors
contributed most to success were, in order of importance:

+ Market synergy
• The new product fits well with the existing image of the firm, its expertise, and
its resources.
• It is better than competing products in terms of meeting customers' needs as the
firm has a good understanding of its customers' purchase behavior.
• It also receives strong support from the firm and its branches during and after the
launch
+ Organizational factors - there was strong interfunctional cooperation and coordination;
development personnel were fully aware of why they were involved and of the
importance of new products to the company.
+ Market research factors - detailed and scientifically designed market research studies
were conducted early in the development process with a clear idea of the type of
information to be obtained; a good definition of the product concept was developed
before undertaking field surveys were undertaken.
→ Developing new services is a process that requires creativity, effort, and
perseverance, so they need to look carefully to take the right steps and reach their goals
soon.

33