1. Creation of Development of Service Products

2. Creating a service concept is the initial step in building an overall service model. This task focuses our attention on the first of the 8Ps, Product Elements. All service organizations face choices concerning the types of products to offer and how to deliver them to customers.

3. Planning and Creating Services
Augmenting the Core Product
Services are usually defined with reference to a particular industry. For example, transportation or healthcare. However, delivery of this core product is typically accompanied by a variety of other service-related activities that we refer to collectively as supplementary services, which facilitate use of the core product and add value and differentiation to the customer’s overall experience.
Planning and Creating Services

4. Marketing Positioning
PRICE
Vehicle
DISTRIBUTION
In-flight
service
Service frequency
TRANSPORT
Food and drinks
Post-Flight Service
Pre-Flight Service I
ntangible T
angible
Marketing Positioning

5. Designing a Service Concept
Core Product
This is the central component that supplies the principal, problem-solving benefits customers seek. For instance, transport solves the need to move a person or a physical object from one location to another; or repair services restore a damaged or malfuntioning machine to good working order.
Designing a Service Concept

6. Designing a Service Concept
Supplementary Services
These augment the core product, both facilitating its use and enhancing its value and appeal. The extent and level of supplementary services often play a role in differentiating and positioning the core product against competing services. Adding more supplementary elements or increasing the level of performance should be done in ways that enhance the perceived value of the core product for prospective customers and enable the service provider to charge higher price
Designing a Service Concept

7. Designing a Service Concept
Delivery Processes
The 3rd component concerns the processes used to deliver both the core product and each of the supplementary services. The design of the service offering must address the following issues:
How the different service components are delivered to the customer
The nature of the customer’s role in those processes
How long delivery lasts
The prescribed level and style of service to be offered.
Designing a Service Concept

8. I C P B O
CORE E H S
The Flower of Service: Core Product Surrounded by a Cluster of Supplementary Services

9. Supplementary services play one of two roles
Supplementary services play one of two roles. Facilitating supplementary services are either required for service delivery or aid in the use of the core product. Enhancing supplementary services add extra value for customers. There are potentially dozens of different supplementary services, but almost all of them can be classified into one of the 8 clusters.
The Flower of Service

10. The Flower of Service Facilitating Services Enhancing Services
Information
Order-taking
Billing
Payment
Enhancing Services
Consultation
Hospitality
Safekeeping
Exceptions

11. Information
To obtain full value from any good or service, customers need relevant information. Thus, companies should make sure the information they provide is both timely and accurate, because inaccurate information can annoy or cause inconvenience among customers.

12. Examples of Information Elements
Directions to service site
Schedules/service hours
Prices
Instructions on using core product/supplementary services
Reminders
Warnings conditions of sale/service
Notification of changes
Documentation
Confirmation of reservations
Summaries of account activity
Receipts and tickets

13. Order-Taking
Once customers are ready to buy, a key supplementary element comes into play – accepting aplications, orders, and reservations. The process of order-taking should be polite, fast, and accurate, so that customers do not waste time and endure unnecessary mental or physical effort.

14. Examples of Order-Taking Elements
Applications
Membership in clubs or programs
Subscription services (i.e. utilities)
Prerequisite-based services (i.e. college enrollment)
Order Entry
On-site order fulfillment
Mail/telephone order placement
/website order placement
Reservations and Check-In
Seats/tables/rooms
Vehicles or equipment rental
Professional appointments
Admission to restricted facilities (i.e. museums)

15. Billing
This is common to almost all services (unless the service is provided free of charge). Inaccurate, illegible, or incomplete bills risk disappointing customers who may, up to that point, have been quite satisfied with their experience. Billing should also be timely, because it stimulates faster payent.

16. Examples of Billing Elements
Periodic statements of account activity
Invoices for individual transactions
Verbal statements of amount due
Machine display of amount due
Self-billing (computed by customer)

17. Payment
In most cases, a bill requires the customer to take action on payment. Increasingly, customers expect ease and convenience of payment, including credit, when they make purchases in their own countries and while traveling abroad. A variety of options exist for customers to make payment.

18. Examples of Payment Elements
Self-Service
Insert card, cash, or token in machine
Electronic funds transfer
Mail a check
Enter credit card number online
Direct to Payee or Intermediary
Cash handling and change giving
Check handling
Credit/charge/debit card handling
Coupon redemption
Tokens, vouchers, etc.
Automated deduction from Financial Deposits Control and Verification
Automated systems (i.e. machine-readable tickets that operate entry gates)
Human systems (i.e. toll collectors, ticket inspectors)

19. Consultation
This involves a dialog to probe customer requirements and then develop a tailored solution. Effective consultation requires an understanding of each customer’s current situation, before suggesting a suitable course of action.

20. Examples of Consultation Elements
Customized advice
Personal counseling
Tutoring/training in product use
Management or technical consulting

21. Hospitality
Hospitality-related services should, ideally, reflect pleasure at meeting new customers and greeting old ones when they return.
The quality of hospitality services offered by a firm plays an important role in determining your satisfaction (or dissatisfaction) with the core product.

22. Examples of Hospitality Elements
Greeting
Food and beverages
Toilets and washrooms
Waiting facilities and amenities
Lounges, waiting areas, seating
Weather protection
Magazines, entertainment, newspapers
Transport
Security

23. Safekeeping
When customers are visiting a service site, they often want assistance with their personal possessions. In fact, unless certain safekeeping services are provided (i.e. safe and convenient parking spaces), some customers may not come at all.

24. Examples of SafekeepingElements
Caring for Possessions Customers Bring with Them
Child care
Pet care
Parking facilities for vehicles
Valet parking
Coatrooms
Baggage handling
Storage space
Safe deposit boxes
Security personnel
Caring for Goods Purchased (for Rented) by Customers
Packaging
Pickup
Transportation and delivery
Installation
Inspection and diagnosis
Cleaning
Refueling
Preventive maintenance
Repairs and renovation
Upgrade

25. Exceptions
These involve supplementary services that fall outside the routine of normal service delivery. Astute businesses anticipate exceptions and develop contingency plans and guidelines in advance. That way, employees will not appear helpless and surprised when customers ask for special assistance.

26. Types of Exceptions Special Requests Problem Solving
Handling of complaints/suggestions/compliments
Restitution

27. Examples of Exceptions Elements
Special Requests in Advance of Service Delivery
Children’s Needs
Dietary requirements
Medical or disability needs
Religious observances
Deviations from standard operating procedures
Handling Special Communications
Complaints
Compliments
Suggestions
Problem Solving
Warranties and guarantees against product malfunction
Resolving difficulties that aris from using the product
Resolving difficulties caused by accidents, service failures, and problems with staff or other customers
Assisting customers who have suffered an accident or medical emergency
Restitution
Refunds
Compensation in kind for unsatisfactory goods and services
Free repair of defective goods

28. Planning and Branding Service Products
A product implies a defined and consistent “bundle of output” and also the ability to differentiate one bundle of output from another.
Providers of more intangible services also offer a “menu” of products, representing an assembly of carefully prescribed elements built around the core product, and may bundle in certain value-added supplementary services.

29. Planning and Branding Service Products
Most service organizations offer a line of products rather than just a single product. As a result, they must choose among three broad alternatives: using a single brand to cover all products and services, a separate stand-alone brand for each offering, or some combination of these two extremes
Planning and Branding Service Products

30. The Spectrum of Branded Alternatives
Individual Product Branding
Corporate Branding
“Branded House”
Sub-Brands
Endorsed Brands
House of Brands
The Spectrum of Branded Alternatives

31. Development of New Services
Competitive intensity and customer expectations are increasing in nearly all service industries. Thus, success lies not only in providing existing services well, but also in creating new approaches to service. Because the outcome and process aspects of a service often combine to create the experience and benefits received by customers, both aspects must be addressed in development of new services.

32. A Hierarchy of New Service Categories
Major service innovations – new core products for markets that have not been previously defined. They usually include both new service characteristics and radical new processes.
FedEx introduced overnight, nationwide, express package delivery in 1971.
A Hierarchy of New Service Categories

33. Major process innovations – consist of using new processes to deliver existing core products in new ways with additional benefits.
University of Phoenix delivers undergraduate and graduate degree programs in a nontraditional way – online!

34. Product Line Extensions – additions to current product lines by existing firms.
Banks retail insurance products

35. Process Line Extensions – represent distinctive new ways of delivering existing products, either with the intent of offering more convenience and a different experience for existing customers or of attracting customers who find the traditional approach unappealing.
Barnes and Noble, the leading bookstore chain in the US, added internet retailing through BarnesandNoble.com

36. Supplementary Service Innovations – take the form of adding new facilitating or enhancing service elements to an existing core service, or of significantly improving an existing supplementary service.
Rainforest Café is designed to keep customers entertained with aquariums, live parrots etc.

37. Service improvements are the most common type of innovation
Service improvements are the most common type of innovation. They involve modest changes in the performance of current products, including improvements to either the core product or to existing supplementary services

38. Style changes – represent the simplest type of innovation, typically involving no changes in either processes or performance.
Repainting retail branches
New uniforms for employees
Minor changes in service scripts for employees

39. Reengineering Service Processes
The design of service process has implications not only for customers but also for the cost, speed, and productivity with which the desired outcome is achieved.
Reengineering involves analyzing and redesigning processes to achieve faster and better performance.
Reengineering Service Processes

40. Physical Goods as a Source of New Service Ideas
The design of service process has implications not only for customers but also for the cost, speed, and productivity with which the desired outcome is achieved.
Reengineering involves analyzing and redesigning processes to achieve faster and better performance.
Physical Goods as a Source of New Service Ideas

41. Using Research to Design New Services
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?
Marriott, through research filled a gap in the market with a product that represented the best balance between the price customers were prepared to pay and the physical and service features they most desired.
Using Research to Design New Services