creating service product love lock 04

8/9/2019 Creating Service Product Love Lock 04

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Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 4 - 1

Creating the

Service Product


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Key Steps in Service Planning:Matching Opportunities to Resources

Must relate marketing opportunities to firms resources(physical, financial, technological, human)

Identify, evaluate firms marketing assets Customer portfolio/lifetime value (customer equity)

Market knowledge Marketing implementation skill Product line Competitive positioning strategies Brand reputation (brand equity)

Identify, evaluate firms operating assets

Physical facilities, equipment Technology and systems (especially IT) Human resources (numbers, skills, productivity) Leverage through alliances and partnerships Potential for customer self service Cost structure


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Operating Assets

(Facilities/Equipment, IT Systems,People, Op. Skills, Cost Structure)

Service Design Involves Matching MarketingConcept with Operations Concept (Fig. 4.1)

Corporate Objectivesand Resources

Service DeliveryProcess

Marketing Assets(Customer Base, Mkt. Knowledge,

Implementation Skills, Brand Reput.)

Service Marketing Concept

Benefits to customer from core/supplementary elements, style,service level, accessibility

User costs/outlays incurredPrice/other monetary costsTimeMental and physical effortNeg. sensory experiences

Service Operations Concept

Nature of processesGeographic scope of opsSchedulingFacilities design/layoutHR(numbers, skills)Leverage (partners, self-service)Task allocation: front/backstagestaff; customers as co-producers


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Understanding theComponents of the

Augmented Service Product


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Shostacks Molecular Model of a Total MarketEntity - Passenger Airline Service (Fig. 4-2)

DistributionPrice

MarketingPositioning(Weightedtowardevidence) Source: Shostack

KEY

TangibleelementsIntangibleelements

Servicefrequency

Vehicle

Transport

Pre- andpost-flight

service

Food

anddrink

In-flightservice


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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 becomecommodities

Supplementary services help to differentiate core products

and create competitive advantage by:facilitatinguse of the core serviceenhancingthe value and appeal of the core


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Core and Supplementary Product Design:What Do We Offer and How Do We Create and Deliver It?

Core

Scheduling Process

Service

Level

Customer

Role

Supplementaryservices offeredand how createdand delivered

Delivery ConceptFor Core Product


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What Should Be the Core and SupplementaryElements of Our Service Product?

How is our core product defined and what supplementaryelements currently augment this core?

What product benefits create the most value for customers?

Is our service package differentiated from the competition inways that are meaningful to target customers?

What are current levels of service on the core product andeach of the supplementary elements?

Can we charge more for higher service levels on keyattributes (e.g., faster response, better physical amenities,easier access, more staff, superior caliber personnel)?

Alternatively, should we cut service levels and charge less?


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Core and Supplementary Services in a Luxury Hotel(Offering Guests Much More than a Cheap Motel!)

Reservation

ValetParking

Reception

Baggage

Service

CocktailBar

RestaurantEntertainment/

Sports / Exercise

Telephone

Wake-upCall

Room

Service

BusinessCenter

Cashier

A Bed for the

Night in anElegant Private

Room with a

Bathroom


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The Flower of Service:Categorizing Supplementary Services (Fig. 4-5)

Core

Information

Consultation

Order-Taking

Hospitality

Payment

Billing

Exceptions

SafekeepingFacilitating elements

Enhancing elements

KEY:


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Facilitating Services - Information(Table 4.1)

Core

Customers often require

information about how toobtain and use a product orservice. They may alsoneed reminders anddocumentation


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Facilitating Services - Order-Taking(Table 4.2)

Many goods and servicesmustbe ordered or reservedin advance. Customers needto know what is available andmay want to secure

commitment to delivery

Core


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Facilitating Services - Billing(Table 4.3)

How much do I owe you?Customers deserve clear,accurate and intelligiblebills and statements

Core


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Facilitating Services - Payment(Table 4.4)

Customers may pay fasterand more cheerfully if youmake transactions simpleand convenient for them

Core


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Enhancing Services - Consultation(Table 4.5)

Value can be added togoods and services byoffering advice andconsultation tailored toeach customers

needs and situation

Core


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Enhancing Services - Hospitality(Table 4.6)

Customers who invest timeand effort in visiting abusiness and using itsservices deserve to betreated as welcome guests(after all, marketing invited

them there!)

Core


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Enhancing Services - Safekeeping(Table 4.7)

Customers prefer not to

worry about looking afterthe personal possessionsthat theybring with themto a service site.

They may also want delivery

and after-sales services forgoods that they purchaseor rent

Core


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Enhancing Services - Exceptions(Table 4.8)

Customers appreciate someflexibility in a businesswhen they make specialrequests. They expect itwhen not everything goesaccording to plan

Core


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BrandingService Products


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Service Branding:Clarifying Distinctive Service Offerings

Marriott Hotel Brands

Marriott Hotels

Marriott ResortsCourtyard by Marriott

Fairfield Inns

Residence Inns

SpringHill SuitesTownePlace Suites

Marriott Vacation ClubsInternational

British Airways Brands

Intercontinental

FirstClub WorldWorld Traveller PlusWorld Traveller

European

Club EuropeEuro-Traveller

UK Domestic

Shuttle


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Branding a High-Tech, B2B Product Line:A Family of Brands at Sun Microsystems

Corporate umbrella brand Sun Microsystems

Product line brand (system support services) Sun Spectrum Support

Sub-brands (4 levels of support service programs) Platinum

Gold

Silver

Bronze


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Sun Spectrum Support:Sub-branding Highlights Four Service Levels

Sub-branding clarifies service levels offered at different fees

Platinum: Mission Critical

On-site service 24/7, two-hour response;telephone support 24/7, onsite parts replacement;

additional services available

Gold: Business Critical

Onsite service Mon-Fri 8am-8pm, four-hour response;

telephone support 24/7; onsite parts replacement

Silver:Basic Support

Onsite service Mon-Fri 8am-5pm, four-hour response;telephone support Mon-Fri 8am-8pm; onsite parts replacement

Bronze: Self Support

Phone support Mon-Fri 8am-5pm; parts replacement by courier


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New ServiceDevelopment


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New Service Development:A Hierarchy of New Service Categories

Major service innovations--new core products for previouslyundefined markets

Major process innovations--using new processes todeliver existing products and offer extra benefits

Product line extensions--additions to current product lines

Process line extensions--alternative delivery procedures

Supplementary service innovations--adding new or

improved facilitating or enhancing elements

Style changes--visible changes in service design or scripts


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New Service Development:Physical Goods as Source of Service Ideas

Customers can rent goodsuse and return for a feeinstead of purchasing them

Customers can hire personnel to operate their own or

rented equipmentAny new durable product may create need for after-sales

services (possession processing)

Shipping Installation

Problem-solving and consulting advice Cleaning MaintenanceRepair Upgrading Disposal


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Creating Services as Substitutes forOwning and/or Using Goods (Fig. 4-7)

Perform the

Work Oneself

Hire Someone

to Do the Work

Own a Physical Good Rent the Use

of a Physical Good

Hire a taxi or limousine

Send work to secretarial service

Rent car and drive it

Rent word processor and type

Hire chauffeur to drive car

Hire typist to use word processor

Drive own car

Type on own word processor


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Service Development through Delivery Options:Alternative Meal Service Formats (Fig. 4-8)

Home

DeliveryOrder food,

give address

Driver rings

doorbell

Pay driver,

take food EatTelephone

Restaurant

Drive-InRestaurant(Take Out)

See sign Order via

microphone

Get meal at

pickup, pay

Drive away,

eat later

Stop car at

order point

Fast-FoodRestaurant

(EatIn)

See sign Park and

enter

Order meal,

and pay

Pick up

meal

Find table

and eat

Clear table

and leave

Home

Catering

Arrange tomeet caterer

Plan meal,

pay depositFood and

staff arrive

Meal ispreparedand served

EatStaff cleans

up; pay


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

External building designand features

Room features

Food-related services

Lounge facilities

Services (e.g., reception)

Leisure facilities

Securitypeople/systems


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Success Factors in New Service Development

Market synergyGood 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

Organizational factors Strong interfunctional cooperation and coordination

Internal marketing to educate staff on new product and itscompetition

Employees understand importance of new services to firm

Market research factors Scientific studies conducted early in development process

Product concept well defined before undertaking field studies

creating service product love lock 04

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