Understanding service products (once more ;)
Services are performance, rather a thing, and they are experienced rather than owned… Customers participate in service delivery.
Service delivery occurs in real time.
Services have front end and backstage.
Services have a core and supplementary elements.
Designing and delivering services.
Figure 1. Planning, creating, and delivering services.
Service delivery process is configured additionally.
Figure 2. Service delivery and evaluation.
Technological revolution in Services.
Fast trains, weather forecasts, satellite communications and broadcast, Internet… ATM machines (and supplementary infrastructure) are the core advances in banking.
Marketspase vs. marketplace.
Moving from high-contact to low-contact encounter changes the approaches to service delivery. E.g., buying in face-to-face contact, telephone contact, or “anonymous” Internet.
Planning and branding service products
A product defines a consistent “bundle of output” and also the ability to differentiate one bundle of output from another. (The statement, developed for tangible products, is applicable for services).
Product lines and brands.
Mostly, companies operate several lines, changing the list given the changes in market environment. (Marriott Corporation initially had: full-service business and resort hotels, family and fast-food restaurant chains, contract food services (including both institutional catering and in-flight kitchens and airlines), theme parks, and cruise ships. Later, it sold most of the latter, expanding the first group.
British Airways had 8 brands under operation: Concorde, First Class, Club World (business class), World Traveller (economy class); Club Europe and Euro-Traveler (European business and economy); SuperShuttle brand (guaranteed economy seat at high-frequency service); 6 commuter airlines (partnerships with BA), operating British Airways Express brand.
Figure. The tiering of lodging services.
Creating new services.
Degree of service innovation:
1. Major innovations (new products, yet undefined and undimensioned). E.g., first broadcast TV. 2. Start-up businesses (new products for a market already served by products that meet the same generic need). 3. New products (for currently served market, as an attempt to offer existing customers a product that the firm didn’t previously offer, although it was available elsewhere). 4. Product line extension (e.g., new items in menu).
5. Product improvements (e.g., extending work hours).
6. Style changes (e.g., service uniforms).
The process of new service development is similar to that in manufacturing (see intro to marketing course, product development chapters).
Searching for new ideas: turning goods into services.
- Tangible products.
- Substitute of owning (see services classification).
- Adding services to the core products (from installation to disposal). - …
Transforming services into goods.
Going from intangible to tangible (lecture ( books, banking ( self-service, live performances ( records, layers and legal advisors ( specialized software (sometimes)). Customers continue to change the way in which they obtain the valued benefits they seek. The telephone created the need for answering services among busy people, many of whom solved this need first from services (secretary), then from manufactured goods (automatic teller), and most recently from services again (virtual office).
Role of research.
E.g. Marriott Corporation and the new product Courtyard by Marriott. The research had to determine what benefits customers are looking for and what they are prepared to pay for. Respondents were asked to trade off different hotel service features in an effort to determine which ones they valued most (see conjoint analysis). Marriott was looking for a niche between full-service hotels and...