Services Marketing, Operations and Management

Vinnie Jauhari and Kirti Dutta

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Chapter 2
The Service Product

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Agenda
The Service Product Service Offering Levels of service product New Product Development Product life cycle Product life cycle strategies Branding
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The Service product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. It includes physical objects, services, place, organizations, and ideas Kotler et al., 2006

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The Service product (contd.)

Anything that can be offered to a market for attention, acquisition or consumption including physical objects, services, personalities, organizations and desires. American Marketing Association

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Service Offering
Customers adopt a product based on the perception that the benefits derived are worth more than the cost of the product. Thus, service organizations must develop and offer a service product that meets or exceeds customer expectation. The design of the service product must thus address three key components : 1. core product 2. augmented service offering 3. delivery process
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Service offering for a Packaged Trip

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Service Product Levels

The five levels of service product the marketer needs to think about are: 1. Core or generic product/service: This is the most fundamental product/service that customers purchase. 2. Basic product/service: This is how the marketer translates the core benefit into a service product. 3. Expected product/service: This includes the attributes, such as design, quality, packaging, etc., which customers expect when purchasing a service product. 4. Augmented product/service: This includes the supplementary services the marketer offers to differentiate their product offering from other players in the same market segment. 5. Potential product/service: This consists of new ways of attracting and satisfying the customers.

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The various levels of Service Product Air Transportation

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New Product Development

Companies that have a new product strategy in place are more successful than those that do not. New product development, in a conventional buying environment, is largely driven by the need to innovate. More profitable and faster growing firms are found to engage in sustained innovative activities. Thus, product development is An essential process for competitive success, survival and renewal of organizations (Brown and Eisenhardt 1995).
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New Product Development Stages

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In-Class Exercise
The various stages of a new product development have been discussed. The students need to ponder on how this is different for different types of new products (say product improvements and new brands that firms develop).

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Product Life Cycle (PLC)

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PLC - Characteristics

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PLC Strategies

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Branding
The American Marketing Association defines a brand as : A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from competitors

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Branding (contd.)
A brand can convey up to six levels of meaning : Attributes There may be features/attributes associated with the brand. For example, a bank may list the services offered in its portfolio such as loans, savings accounts, demat account, online transactions, etc. Benefits A brand represents functional and/or emotional benefits. For example, a bank may offer a 24/7 service or ease of transactions. Values These relate to the product/service values. For example, Made in Switzerland for watches or Made in Japan for electronics products evoke feelings of trust. Culture A brand represents a culture. For example, Sony and Toyota represent Japanese precision and quality. Personality A brand may project a personality of the consumer. For example, a Diners Card is evidence of a customers long association with the bank. User A brand points out the categories of users. For example, tour operators specifically target age groups of customers when they advertise travel packages such as family destinations, honeymoon couples, etc.
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Branding (contd.)
Uses of Branding are: identification of source of product assignment of responsibility to product maker reduction of risk reduction of search costs promise, bond, or pact with maker of product symbolic device signal of quality.
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Branding Challenges
To brand or not to brand There are instances in service segments such as home loans and credit collection agencies, which work for leading banking brands, such as ICICI and HDFC. On their own, they would find it difficult to sustain their operations. Brand sponsor decisions These decisions are about whether the brand would be a manufacturers brand, distributors brand, or licensed brand. Firms such as Wills Lifestyle have opened their own stores for retailing its brand of clothes. Superstores, such as Marks and Spencers, retail products using their own brand names. Brand name decisions These decisions are related to whether individual names, blanket family names, separate family names, or company trade names should be combined with an individual product name. Oxford University Press 2009. All rights reserved. 19 Brand strategy decisions These are related to brand positioning decisions.