4 Developing Service PRODUCTS AND BRANDS WIRTZ LOVELOCK

Learning Objectives 4. 1 Understand what constitutes a service product. 4. 2 Be familiar with the Flower of Service model. 4. 3 Know how facilitating supplementary services relate to the core product. 4. 4 Know how enhancing supplementary services relate to the core product. 4. 5 Understand branding at the corporate and individual service product levels. 4. 6 Examine how service firms use different branding strategies. Copyright © 2018 Pearson Education Ltd. 4 -2

Learning Objectives 4. 7 Understand how branding can be used to tier service products. 4. 8 Discuss how firms can build brand equity. 4. 9 Understand what is required to deliver a branded service experience. 4. 10 List the categories of new service development, ranging from simple style changes to major innovations. 4. 11 Describe how firms can achieve success in new service development. Copyright © 2018 Pearson Education Ltd. 4 -3

Understand what constitutes a service product DEVELOPING SERVICE PRODUCTS AND BRANDS • The components of a service product Core Product o Supplementary Services o Delivery Processes o Copyright © 2018 Pearson Education Ltd. 4 -4

The Flower of Service model DEVELOPING SERVICE PRODUCTS AND BRANDS • A core product

The Flower of Service model DEVELOPING SERVICE PRODUCTS AND BRANDS Copyright © 2018 Pearson

The Flower of Service: Facilitating Services—Information Customers often require information about how to obtain and use a product or service. Core Examples of elements: § Directions to service site § Schedule/service hours § Prices § Conditions of sale § Usage instructions Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Enhancing Services—Consultation Value can be added to goods and services by offering advice and consultation tailored to each customer’s needs and situation. Core Examples of elements: § Customized advice § Personal counseling § Management consulting Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Facilitating Services—Order Taking Customers need to know what is available and may want to secure commitment to delivery. The process should be fast and smooth. Core Examples of elements: § Applications § Order entry § Reservations and check-in Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Facilitating Services—Billing “How much do I owe you? ” Bills should be clear, Accurate, and intelligible. Core Examples of elements: § Periodic statements of account activity § Machine display of amount due Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Facilitating Services—Payment Customers may pay faster and more cheerfully if you make transactions simple and convenient for them. Core Examples of elements: § Self service payment § Direct to payee or intermediary § Automatic deduction Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Enhancing Services—Hospitality Customers who invest time and effort in visiting a business and using its services deserve to be treated as welcome guests— after all, marketing invited them! Core Examples of elements: § Greeting § Waiting facilities and amenities § Food and beverages § Toilets and washrooms § Security Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Enhancing Services—Safekeeping Customers prefer not to worry about looking after the personal possessions that they bring with them to a service site. Core Examples of elements: § Looking after possessions customers bring with them § Caring for goods purchased (or rented) by customers Copyright © 2018 Pearson Education Ltd.

The Flower of Service: Enhancing Services—Exceptions Core Customers appreciate some flexibility when they make special requests and expect responsiveness when things don’t go according to plan. Examples of elements: § Special requests in advance § Complaints or compliments § Problem solving § Restitution Copyright © 2018 Pearson Education Ltd.

Core and Supplementary Services at Luxury Hotel (Offering Much More than Cheap Motel!) Reservation Valet Cashier Parking Business Center A Bed for the Night in an Room Elegant Private Service Room with a Bathroom Baggage Service Cocktail Bar Wake-up Call Internet Reception Entertainment/ Restaurant Sports/ Exercise Copyright © 2018 Pearson Education Ltd.

Flowcharting Service Delivery Helps to Clarify Product Elements § Offers way to understand totality of customer’s service experience § Useful for distinguishing between core product itself and service elements that supplement core Ø Restaurants: Food and beverage (core) Ø Reservations (supplementary services) § Shows how nature of customer involvement with service organizations varies by type of service: Ø Ø People processing Possession processing Mental Stimulus processing Information processing Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 16

What Happens, When, in What Sequence? Time Dimension in Augmented Product Reservation Parking Get car Check out Internet Check in Internet Use room internet USE GUESTROOM OVERNIGHT Porter Meal Before Visit Pay TV Room service Time Frame of An Overnight Hotel Stay (Real-time service use) Copyright © 2018 Pearson Education Ltd.

Defining Core and Supplementary Elements of Our Service Product • How is our core product defined and what supplementary elements augment it? • What product benefits create most value for customers? • Is our service package differentiated from competition in meaningful ways for target customers? • What are current levels of service on core product and each supplementary element? • Can we charge more for higher service levels? For example: • • • Faster response and execution Better physical amenities Easier access Higher staffing levels Superior caliber personnel • Alternatively, should we cut service levels and charge less? Copyright © 2018 Pearson Education Ltd.

Branding: corporate and individual service products DEVELOPING SERVICE PRODUCTS AND BRANDS • A product implies a defined and consistent “bundle of output” • Brand names enables the firm to communicate the distinctive experiences and benefits associated with a specific service concept. • A firms can differentiate its bundle of output from its competitors’. Copyright © 2018 Pearson Education Ltd. 4 -19

How branding can be used to tier service products DEVELOPING SERVICE PRODUCTS AND BRANDS British Airways offers seven distinct air travel products • Four intercontinental offerings: First (deluxe service) o Club World (business class) o World Traveller Plus (premier economy class) o World Traveller (economy class) o • Two intra-European offerings: Club Europe (business class) o Euro-Traveller (economy class) o UK Domestic (economy class between London and major British cities) o Copyright © 2018 Pearson Education Ltd. 4 -20

Delivering Branded Service Experiences DEVELOPING SERVICE PRODUCTS AND BRANDS • Besides designing great service products and giving them a brand name, service marketers must consider: Having great processes in place o The servicescape o Investing in good employees o Copyright © 2018 Pearson Education Ltd. 4 -21

Hierarchy of New Service Categories DEVELOPING SERVICE PRODUCTS AND BRANDS • Style changes: o • Service improvements: o • Modest changes in the performance of current products Supplementary service innovations: o • Visible changes in service design or scripts Addition of new or improved facilitating or enhancing elements Process-line extensions: o Alternative delivery procedures Copyright © 2018 Pearson Education Ltd. 4 -22

Hierarchy of New Service Categories DEVELOPING SERVICE PRODUCTS AND BRANDS • Product-line extensions: o • Major process innovations: o • Additions to current product lines Using new processes to deliver existing products with added benefits Major service innovations o New core products for previously undefined markets Copyright © 2018 Pearson Education Ltd. 4 -23

Achieving Success in Developing New Services DEVELOPING SERVICE PRODUCTS AND BRANDS • In developing new services: Core product is of secondary importance o Ability to maintain quality of the total service offering is key o Accompanying marketing support activities are vital o Market knowledge is of utmost importance o Copyright © 2018 Pearson Education Ltd. 4 -24