flower of service (PowerPoint)

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					Flower of
   Understanding the
   Components of the
Augmented Service Product
Shostack’s Molecular Model of a Total Market Entity
            - Passenger Airline Service


                                   Transport        In-flight
                        Pre- and
                       post-flight          Food
                        service             and
 Tangible elements
 Intangible elements
                             Marketing Positioning
    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 become commodities
• Supplementary services help to
  differentiate core products and
  create competitive advantage by:
   –facilitating use of the core service
   –enhancing the value and appeal of
    the core
   Core and Supplementary Product Design:
   What Do We Offer and How Do We Create
               and Deliver It?

Supplementary                              Delivery Concept
services offered                           For Core Product
and how created    Scheduling   Process
and delivered


                   Service      Customer
                    Level         Role
     What Should Be the Core and
    Supplementary Elements of Our
            Service Product?
• How is our core product defined and
  what supplementary elements currently
  augment this core?
• What product benefits create the most
  value for customers?
• Is our service package differentiated
  from the competition in ways that are
  meaningful to target customers?
• What are current levels of service on the
  core product and each of the
  supplementary elements?
• Can we charge more for higher service
  levels on key attributes (e.g., faster
  response, better physical amenities, easier
  access, more staff, superior caliber
• Alternatively, should we cut service levels
  and charge less?
Core and Supplementary Services in a
           Luxury Hotel

               Cashier                  Valet
             Center                         Reception

                        A Bed for the
          Room           Night in an          Baggage
         Service       Elegant Private         Service
                        Room with a
          Wake-up                          Cocktail
           Call                              Bar

           Telephone                       Restaurant
                       Sports / Exercise
                The Flower of Service:
         Categorizing Supplementary Services


                   Payment                   Consultation

                  Billing         Core          Order-Taking

                  Exceptions                  Hospitality
Facilitating elements          Safekeeping
Enhancing elements
Facilitating Services - Information

                Customers often
      Core        require
                information about
                  how to
                obtain and use a
                  product or
                They may also
                need reminders and
Facilitating Services - Order-Taking

                  Many goods and services
                  must be ordered or
      Core           reserved
                  in advance.

                  Customers need
                  to know what is available
                  may want to secure
                  commitment to delivery
Facilitating Services - Billing

               “How much do I owe
    Core          you?”
               Customers deserve
               accurate and intelligible
               bills and statements
Facilitating Services - Payment

               Customers may pay
   Core          faster
               and more cheerfully if
               make transactions
               and convenient for
Enhancing Services - Consultation

                Value can be added
                  to goods and
   Core           services by
                offering advice and
                  tailored to
                each customer’s
                needs and situation
Enhancing Services - Hospitality

                Customers who invest
                   time and effort in
  Core             visiting a
                business and using its
                services deserve to be
                treated as welcome
Enhancing Services - Safekeeping

                Customers prefer not to
                worry about looking
                  after the personal
                  possessions that they
                  bring with them
                to a service site.

                They may also want
                  delivery and after-
                  sales services for
                goods that they
                or rent
Enhancing Services - Exceptions

                Customers appreciate
     Core       flexibility in a business
                when they make special

                They expect it
                when not everything
                Goes according to plan
             Flower of service
• core product surrounded by cluster of
  supplementary services

• Supplementary services

• Facilitating services :
   –   Information
   –   Order taking
   –   Billing
   –   Payment
• Enhancing services:
  – Consultation
  – Hospitality
  – Safekeeping
  – Exceptions
• a)    Examples of information elements

•   Directions to service site
•   Schedules / service hours
•   Prices
•   Instructions on using the service
•   Reminders
•   Warnings
•   Condition of sale/service
•   Notification of changes
• b) Examples of order taking elements
• Applications
• Membership in clubs
• Subscription services (e.g utilities)
• Prerequisite based services (e.g college
• Order entry
• On –site order fulfillment
• Mail/ telephone order placement
• Email order placement
• Reservations and check in
  –   Seats
  –   Tables
  –   Rooms
  –   Vehicles or equipment rental
  –   Admission to restricted facilities (museums)
• Billing :
  – Periodic statements of account activity
  – Invoices for individual transactions
    (stock market)
  – Machine display of amount due
• Examples of payment
  –   cash
  –   Cheque
  –   Credit card
  –   Electronic fund transfer
  –   Enter credit card number online
  –   Coupon redemption
  –   Automated systems : ( e.g Machine-readable
      tickets that operate entry gates)
• Consultation
  –   Advice
  –   Auditing
  –   Personal counseling
  –   Tutoring /training in product use.
  –   Management or technical consulting
• Hospitality : examples of hospitality elements
  –   Greetings
  –   Food and beverages
  –   Toilets and washrooms
  –   Waiting facilities and amenities
       • Lounges, waiting areas and seating
       • Weather protection
       • Magazines, entertainment, newspaper
• Transport
• Security
•   Safekeeping
•   Caring for possessions customers bring
    with them
     •   Child care
     •   Pet care
     •   Parking facility for vehicles
     •   Valet parking
     •   Luggage handling
     •   Safe deposit boxes
     •   Security personnel
•     h)   Exception elements:

1)   special requests in advance of service delivery:
•     Children’s needs
•     Dietary requirements
•     Medical or disability needs
•     Religious observances
•     Deviations from Standard operating procedures
– Problem solving

  • Warranties and guarantees against 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.