Chapter 4 Service Marketing

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4

CHAPTER

developing service products:

CORE and

SUPPLEMENTARY ELEMENTS
LEARNING OBJECTIVES
By the end of this chapter, students should be able:
LO 1 Define what a service product is. LO 2 Know how to design a service LO 4 Know how service firms use

concept.

different branding strategies for their product lines. service development, ranging from simple style changes to major innovations. needed to achieve success in developing new services.

LO 3 Describe the flower of service

LO 5 List the categories of new

and know how the facilitating and enhancing supplementary services relate to the core product.

LO 6 Be familiar with the factors

OPENING VIGNETTE1
Figure 4.1 Starbucks is a familiar brand that even has traditional tea consumers drinking out of its cups.

As you walk along the street, the aroma drifts through the air and attracts you. It is drawing you toward the store with the green sign that has now become a common sight. You enter Starbucks, the place where you can sit down and enjoy a great cup of coffee in a comfortable settee or on a chair. You can also surf the Internet on the free wireless broadband service that is available in many of the Starbucks outlets around the world. Starbucks is a place that you would associate with coffee, before anything else.

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Chapter 4 • Developing Service Products: Core and Supplementary Elements

As a service innovation, Starbucks has been transforming itself into a place for entertainment. It wants to extend the pop culture. It does that through Hear Music Starbucks. Customers can buy from an extensive selection of hand-selected and compiled physical CDs in the Starbucks Hear Music Coffeehouses. Alternatively, they can burn personalized CDs from a digital inventory of more than a million sound tracks, including new recordings that can only be found in some Starbucks outlets. Debut albums of some new musicians are actually launched and available only exclusively at Starbucks outlets. Starbucks also sells movie DVDs and books from emerging as well as established authors. It has tied up with Apple’s iTunes WiFi Music Store to allow music playing at selected Starbucks cafes, up to the last ten songs played, to be browsed, bought and downloaded wirelessly onto the iPhone or iPod. This music will sync back to the Mac or PC the next time it is connected. Soon, we will no longer associate Starbucks with just mocha. Rather, we will see it as a place to relax and feel at home. Starbucks is a company that has developed new service innovations with great success. However, it cannot rest on its laurels as competition is intense. It has to continue to reinvent itself to maintain its edge in the industry.

...One of the trendsetters of lifestyle services, Starbucks has popularized the coffeehouse as contemporary and chic...

Applying the 4Ps to Services

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PART II

LO 1
Define what a service product is.

SERVICE PRODUCT

W

hat do we mean by a service “product”? A service product consists of two components, the core product and supplementary services. The core product is based on the core set of benefits and solutions delivered to customers. These are usually defined with reference to a particular industry like healthcare or transportation. For example, in healthcare, the core product may be the restoration of the body back to an optimum condition. Surrounding the core product is a variety of service-related activities called supplementary services. Supplementary services augment the core product by facilitating its use and enhancing its value and appeal. The supplementary services often play an important role in differentiating and positioning the core product against competing services.

LO 2
Know how to design a service concept.

DESIGNING A SERVICE PRODUCT
ow should one go about designing a service concept? Experienced marketers know that they need to look at the entire service performance in a holistic manner. The firm needs...
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