WKSHT Chapter 3 Developing Service Concepts – Core and Supplementary Element

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 and ease of doing business with the organization. People-processing and high-contact services tend to have more supplementary services. Market positioning strategy helps to determine which supplementary services should be included. Firms that offer different levels of service often add extra supplementary services for each upgrade in service level

Customers often require information about how to obtain and use a product or service.

Examples of elements:

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• Directions to service site
• Schedule/service hours
• Prices
• Conditions of sale
• Usage instructions

Customers need to know what is available and may want to secure commitment to delivery. The process should be fast and smooth. Examples of elements:

• Applications
• Order entry
• Reservations and check-in

Customers who invest time and effort in visiting business and using its services deserve to be treated as welcome guestsnn- after all, marketing invited them!

Examples of elements:

• Greeting
• Waiting facilities and amenities
• Food and beverages
• Toilets and washrooms
• Security

Enhancing Services: customers prefer not to worry about looking after the personal possessions that they bring with them to a service site. Examples of elements:

• Looking after possessions customers bring with them
• Caring for goods purchased (or rented) by customers
• Special requests in advance
• Complaints or compliments
• Problem solving
• Restitution

To develop product policy and pricing strategy managers need to determine: which supplementary services should be offered as a standard package accompanying the core, which supplementary elements could be offered as options for an extra charge.

In general, firms that compete on a low-cost, no-frills basis needs fewer supplementary elements than those marketing expensive, high-value-added services. Each flower petal must receive consistent care and concern to remain fresh and appealing.

A product implies a defined and consistent and also ability of firm to differentiate its bundle of output from competitors’. Service firms can differentiate their products in similar fashion to various “models” offered by manufacturers. Providers of more intangible services also offer a lot of products. Represent an assembly of elements that are built around the core product. May include certain value-added supplementary services.

Product Lines and Brands

Most service organizations offer a line of products rather than just a single product. They may choose among three broad alternatives:

1. Single brand to cover all products and services
2. A separate, stand-alone brand for each offering
3. Some combination of these two extremes|

It is, instead, the heart and soul of the brand…. ” Don Schultz | IV. Developing New Services| A Hierarchy of New Service Categories (1)| 1. Major service innovations * New core products for previously undefined markets 2. Major process innovations * Using new processes to deliver existing products with added benefits 3. Product-line extensions * Additions to current product lines 4. Process-line extensions * Alternative delivery procedures

Service processes affect not only customers, but also cost, speed, and productivity with which desired outcome is achieved involves analyzing and redesigning processes to achieve faster and better performance * Running tasks in parallel instead of sequence can reduce/eliminate dead time. Examination of processes can lead to creation of alternative delivery methods that constitute new service concepts:

• Add/eliminate supplementary services
• Resequence delivery of service elements
• Offer self-service options

Planning and creating services involve:

1. Augmenting core product
2. Designing core product, supplementary services, and delivery process
3. Documenting delivery sequence over time with flowcharts
4. Gaining insights from flowcharting
5. Flower of service includes core product and two types of supplementary services: facilitating and enhancing
6. Facilitating services include information, order taking, billing, and payment
7. Enhancing services include consultation, hospitality, safekeeping, and exceptions
8. Spectrum of branding alternatives exists for services
9. Branded house
10. Sub-brands
11. Endorsed brands

Seven categories of new services:

1. Major service innovations
2. Major process innovations
3. Product-line extensions
4. Process-line extensions
5. Supplementary service innovations
6. Service improvements
7. Style changes

To develop new services, we can reengineer service processes, use physical goods as a source of new service ideas, use research to design new services and achieve success in developing new services.

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