The Service Product DEVELOPMENT & DESIGN

Instructor Dr.Ravi Shanker

Session objectives

To identify the components of a service offer Identify components of a service product and distinguish between the core and secondary service offer Understand the process of developing a new service product/ offer

Product Elements
All Aspects of Service Performance that Create Value Core product features Bundle of supplementary service elements Performance levels relative to competition Benefits delivered to customers Guarantees

Molecular Model of Passenger Airline Service

Distribution Price

Service frequency

Vehicle

Transport
Pre- and post-flight service

In-flight service

Food and drink

KEY

Tangible elements Intangible elements Marketing Positioning

(Weighted toward evidence)

The core service

Essentially

defined in terms of consumers benefits substantive service underlying service concept

The

The

The secondary service

Differentiating features features styling packaging branding physical evidence service delivery processes people quality

of the service:

Core Products and Supplementary Services

Most

firms offer customers a package of benefits:

core product (a good or a service) supplementary services that add value to the core In mature industries, core products often become commodities Supplementary services help to differentiate core products and create competitive advantage by: facilitating use of the core service enhancing the value and appeal of the core

SERVICE AS A PRODUCT IT CAN BE DEVELOPED, PRODUCED, MARKETED, DELIVERED & CONSUMED LIKE AN OBJECT

Core & Augmented Product

Augmented product
Core product Primary Characteristics

AUXILIARY CHARACTERISTICS

Product Strategy & Product Concept

Consumer Benefits

Product Differentiation
Selection and blending of a products primary and auxiliary dimensions into a unified mix emphasizing a particular set of consumer benefits

Colored paperclips that dont rust

KOTLERS FIVE LEVEL

CORE BENEFIT BASIC PRODUCT EXPECTED PRODUCT AUGMENTED PRODUCT POTENTIAL PRODUCT

FIVE PRODUCT LEVELS

1 CORE BENEFIT 2 BASIC PRODUCT 3 EXPECTED PRODUCT 4 AUGMENTED PRODUCT THE FUNDAMENTAL BENEFIT THE CUSTOMER IS BUYING (HOTEL: REST/ SLEEP) BASIC, FUNCTIONAL ATTRIBUTES (ROOM; BED, BATH) SET OF ATTRIBUTES/CONDITIONS THE BUYER NORMALLY EXPECTS (CLEAN ROOM, LARGE TOWEL, QUIETER LOCATION) THAT MEETS THE CUSTOMERS DESIRES BEYOND EXPECTATIONS (PROMPT ROOM SERVICE, MUSIC, CHECK IN/ OUT, AROMA) THE POSSIBLE EVOLUTION TO DISTINGUISH THE OFFER (ALL-SUITE HOTEL)

5 POTENTIAL PRODUCT

STAGES OF NEW SERVICE DEVELOPMENT

STAGE CONSUMER WHAT BENEFITS CONSUMERS SEEK BENEFIT I (PROBLEMS: CONCEPT CONSUMERS INARTICULATE, BENEFITS SOUGHT CHANGE OVERTIME, MEASUREMENTS ON IMPORTANCE OF BENEIFTS.

STAGES OF NEW SERVICE DEVELOPMENT

STAGE SERVICE WHAT BENEFITS THE SERVICE II CONCEPT ORGANISATION SHOULD OFFER

III

SERVICE OFFER

SERVICE ELEMENTS: TANGIBLE & INTANGIBLE SR. FORMS: IN WHAT WAY/HOW SR. LEVELS: IMAGE, QUALITY: TECHNOLOGY, FUNCTIOINAL QUALITY, VOLUME, FLOW, TIMING

IV SERVICE DELIVERY SYSTEM

USING BENCHMARKS OF SR. OFFER DEVELOP, PEOPLE & FACILITIES

MANAGING IMAGE & COMMUNICATION

TO SUPPORT AND ENHANCE PERCEPTIONS ON SR. OFFER

SERVICE PACKAGE CONCEPT

(BASED ON A CUSTOMER PERSPECTIVE)

CAN BE DIVIDED INTO TWO CATEGORIES

CORE SERVICE OR SUBSTANTIVE/ MAIN SERVICE PERIPHERAL SERVICES OR AUXILIARY SERVICES
SUPPORTING SERVICES (AND GOODS)

FACILITATING SERVICES (AND GOODS)

FACILITATING SERVICES
(MA DA TORY, IN A B SENCE OF IT, THE ENTIRE SR. MIGHT COL L A PSE)

SUPPORTING SERVICES
(THESE SRs. DON'T FA CIL ITA TE THE CONSUMPTION OF THE CORE SERVICE)

FOR COMPETITIFVE DIFFERENTIATION:

BASIC SERVICE IS AUGMENTED BY BUILDING EXTRAS WHICH THE CUSTOMER FINDS BENEFICIAL

AND GIVES PREFERENCETO THOSE BUSINESS THAT SUPPLIES THEM

ELEMENTS OF AUGMENTED SR. OFFER

1. ACCESSIBILITY OF THE SERVICE

NO. & SKILL SOF PERSONNEL WORKING HOURS TIME USED IN PERFORMING VARIOUS TASKS LOCATION OF SR. OUTLET EXTERIOR & INTERIOR OF SR. OUTLET THE NO. OF CONSUMERS SIMULTANEOUSLY INVOLVED IN THE PROCESS. QUALITY OF CONSUMERS SIMULTANEOUSLY INVOLVED IN THE PROCESS.

2.

INTERACTION WITH SR. ORGANISATION

INTERACTIVE COMMUNICATION BETWEEN EMPLOYEES & CUSTOMERS

INTERACTION WITH TECHONOLOGICAL AND PHYSICAL RESOURCES NEEDED IN THE SERVICE PRODUCTION PROCESS. INT. WITH SYSTEMS: WAITING SYSTEM BILLING SYSTEM DELIVERY SYSTEM SERVICING SYSTEM RECOVERY SYSTEM INTERACTIONS WITH FELLOW CUSTOMERS INVOLVED IN THE PROCESS.

3. CUSTOMER

PARTICIPATION

HOW WELL THE CUSTOMER IS AWARE ABOUT HIS ROLE IN SR. DELIVERY PROCESS

HOW WELL CUSTOMER IS WILLING TO SHARE INFORMATION HOW WELL CUSTOMER IS WILLING TO USE SERVICE EQUIPMENT

The Service Concept The Core Service Accessibility of the Service

Facilitating Services c Supporting Services

Interaction

Consumer Participation

New Service Development: A Hierarchy of New Service Categories

Major

service innovations--new core products for previously undefined markets process innovations--using new processes to deliver existing products and offer extra benefits

Major

New Service Development: A Hierarchy of New Service Categories

Product

line extensions--additions to current product lines line extensions--alternative delivery procedures

Process

New Service Development: A Hierarchy of New Service Categories

Supplementary

service innovations--adding new or improved facilitating or enhancing elements

Style

changes--visible changes in service design or scripts

Success Factors in New Service Development

Market synergy Good fit between new product and firms image/resources Advantage vs. competition in meeting customers needs Strong support from firm during/after launch Firm understands customer purchase decision behavior

Success Factors in New Service Development

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

Success Factors in New Service Development

Market research factors Scientific studies conducted early in development process Product concept well defined before undertaking field studies

Elements of a Hotel Offering: Trading off Room Price vs. Features/Services

External Room

factors

features
services

Food-related Lounge

facilities

Services

(e.g., reception) facilities

Leisure

Security

Service Branding: Clarifying Distinctive Service Offerings

Marriott

Hotel Brands Marriott Hotels Marriott Resorts Courtyard by Marriott Fairfield Inns Residence Inns SpringHill Suites TownePlace Suites Marriott Vacation Clubs International

British

Airways Brands Concorde First Club World World Traveler Club Europe Euro-Traveler Shuttle

Review

To identify the components of a service offer Identify components of a service product and distinguish between the core and secondary service offer Understand the process of developing a new service product/ offer