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MKT 346: Marketing of ServicesDr. Houston
Chapter 4:Developing Service Products(Core and Supplemental Elements)
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Service Product
A service product comprises all elements of service performance, both tangible and intangible, 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 the following issues:
Delivery of service components to customer
Customer’s role in those processes
How long delivery lasts
The recommended level and style of service
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Integration of Core Product, Supplementary Elements 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 elementsFacilitating elements
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The Flower of Service:Supplementary Services
Two kinds of supplementary services
Facilitating
Enhancing
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Supplementary Services
FacilitatingInformation
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 all eight clusters
Nature of product helps to determine:
Which supplementary services must be offered
Which might usefully be added to enhance value
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
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Service Products
A service product implies a defined and consistent “bundle of output”
Firms should differentiate their bundle of output from 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 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
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Product Lines And Brands
• Many product brands housed under
one brand
• Many product brands housed under
one brand
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Offering a Branded Experience (1)
Branding can be used at company & product levels
Corporate brand:Easily recognizedHolds meaning to customersStands for a particular way of doing business
Product brand:Helps firm establish mental picture of service in
consumers’ mindsHelps clarify value proposition
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A Hierarchy of New 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
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Achieving Success in Developing New Services
In the development of new services:
Key is the ability to maintain quality of total service 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 Factors in 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