Aligning Service Design and Standards

Service Products

Service products consist of:

• Core Product central component that supplies the principal, problem-solving benefits customers seek

• Supplementary Services augments the core product, facilitating its use and enhancing its value and appeal

• Delivery Processes used to deliver both the core product and each of the supplementary services

Flower of Service

Core

Information

Consultation

Order-Taking

Hospitality

Payment

Billing

Exceptions

Safekeeping

Enhancing elements Facilitating elements

KEY:

Flower of Service

• There are two types of supplementary services– Facilitating : either needed for service delivery, or

help in the use of the core product– Enhancing : add extra value for the customer

Spectrum of Branding Alternatives

Developing New services

– Reengineer service processes– Use physical goods as a source of new service

ideas– Use research to design new services– Understand how to achieve success in new service

development

Distribution of services

• Distribution relates to both core and supplementary services and embraces three interrelated elements– Information and promotion flow, negotiation

flow, product flow

• Channel options include:– Customers visit the service site– Service providers go to their customers– Service transaction is conducted remotely

• Place and time decisions include where services should be delivered in bricks-and-mortar context, when it should be delivered

• Delivery in cyberspace is facilitated by technology;e-commerce allows 24-hour delivery, saving time and effort

• Intermediaries play roles in distributing services - franchising

• Factors Favoring Adoption of Transnational Strategies

Market drivers

Competition drivers

Technology drivers

Cost drivers

Government drivers

Pricing of services

Costs

Physical Effort

Psychological

BurdensSensory

Burdens

Incidental Expenses

Operating Costs

Purchase

Time

* Includes all five

cost categories

Purchase and Service

Encounter Costs

Search Costs*

Post Purchase Costs*Necessary

Follow-up

Problem

Solving

Money

Revenue management

– Maximizes revenue from a given capacity at a point in time

– Manage demand and set prices for each segment closer to perceived value

– Use of rate fences

Fences to demand curve

Ethical issues in pricing

– Complex pricing schedules– Unfairness and misrepresentation in advertising – Hidden charges– Too many rules and regulations