CHAPTER 4: Developing Service Products - Core and Supplementary Elemen
Service Product
- A service product comprises all elements of service performance, both tangible and intangible, that
create value for customers.
- The service concept consists of:
1. A core product
2. Accompanied by supplementary services
Designing a Service Concept
- Core Product: The central component providing the main benefits.
- Supplementary Services: Enhance the core product by facilitating its use and adding value.
- Delivery Process: Defines how the core and supplementary services are delivered.
Integration of Core Product, Supplementary Elements, and Delivery Process
- The core product is supported by supplementary services and an effective delivery system.
- A well-integrated service offering ensures customer satisfaction and competitive differentiation.
The Flower of Service Model
- The core service is surrounded by eight supplementary services divided into:
1. Facilitating services - Necessary for service delivery.
2. Enhancing services - Add extra value for the customer.
Facilitating Supplementary Services
1. Information - Customers need clear instructions on how to access and use the service.
2. Order-taking - Ensuring a smooth and efficient ordering process.
3. Billing - Bills should be clear, accurate, and easy to understand.
4. Payment - Making transactions simple and convenient improves the customer experience.
Enhancing Supplementary Services
1. Consultation - Personalized advice that enhances service value.
2. Hospitality - Treating customers as welcome guests.
3. Safekeeping - Providing security for customer belongings at the service site.
4. Exceptions - Allowing flexibility for special requests and problem resolution.
Managerial Implications
- Not every core product requires all eight supplementary elements.
- The nature of the core product influences:
1. Which supplementary services must be included.
2. Which services can enhance customer experience.
- People-processing and high-contact services typically require more supplementary services.
Product Lines and Branding in Services
- Most service providers offer multiple service products.
- Branding strategies:
1. Single brand for all services.
2. Separate brands for different offerings.
3. Combination of both approaches.
- Example: British Airways sub-brands for different flight classes.
New Service Development
- Levels of Innovation:
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
Achieving Success in New Services
- Success depends on:
1. Market Synergy (Competitive advantage, internal support, customer understanding)
2. Organizational Factors (Cross-department collaboration, employee training, strategic
importance)
3. Market Research (Early research, clear concept definition, testing before launch)
Conclusion
- A service product consists of a core service, supplementary services, and an effective delivery
system.
- The Flower of Service model helps define key service elements.
- Strong branding and differentiation are essential.
- New service development requires market research, internal alignment, and execution excellence.