Developing Service Concepts: Core and Supplementary Elements

Chapter 3:
Developing
Service Concepts:
Core and
Supplementary
Elements RAM SINGH
LECTURER
INSTITUTE OF ENGINEERING
& TECHNOLOGY
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 - 1
Overview of Chapter 3
Planning and Creating Services
The Flower of Service
Planning and Branding Service Products
Development of New Services
Service as a product
An offering that can be developed produced and

delivered marketed and consumed
Service package is the service as the product is

described as a package or bundle of different services,
tabgibles and intangibles which together form the totl
product
The package consist of

Core service
Auxilary service
Managing the service offerings
Developing the service concept
Developing a basic service package
Developing an augmented service offering
A service product comprises all elements of service

performance, both tangible and intangible, that create
value for customers
The service concept is represented by:

A core product
Accompanied by supplementary services
Core Products and
Supplementary Services
In mature industries, core products often become

commodities
Supplementary services help to differentiate core
products and create competitive advantage by:
Facilitating use of core product (a service or a good)
Enhancing the value and appeal of the core product
Augmenting the Core Product (Fig 3.1)
Figure 3.1 Distribution

Shostacks Molecular Price
Model: Passenger
Airline Service
Service Vehicle
Frequency
In-flight
Transport Service
Pre- &
Postflight
Service Food &
Drink
Key
Tangible Elements
Marketing Positioning Intangible Elements
(weighted toward evidence) Source: Shostack
Augmenting the Core Product
Are supplementary services needed to facilitate use of

core product or simply to add extra appeal?
Should customers be charged separately for each service

element?
Or should all elements be bundled at a single price?
Designing a Service Concept
Core Product
Central component that supplies the principal, problem-solving
benefits customers seek
Supplementary Services
Augment the core product, facilitating its use and enhancing its
value and appeal
Delivery Processes
Used to deliver both the core product and each of the
supplementary services
Core and Supplementary Product Design:
An Integrated Perspective (Fig 3.2)
Delivery Concept
Supplementary Nature of for Core Product
services offered Scheduling Process
and delivered
Service Customer
Level Role
Documenting Delivery Sequence
Over Time
Must address sequence in which customers will use

each core and supplementary service
Determine approximate length of time required for
each step
Customers may budget a specific amount of time for an activity
Information should reflect good understanding of
customers, especially their:
Needs
Habits
Expectations
Question: Do customers expectations change during

service delivery in light of perceived quality of each
sequential encounter?
Core and Supplementary Services at Luxury Hotel
(Offering Much More than Cheap Motel!)
Reservation
Cashier Valet
Parking
Business
Reception
Center
A Bed for the
Room Night in an
Service Elegant Private
Baggage
Room with a
Service
Bathroom
Wake-up Cocktail
Call Bar
Internet Entertainme Restaura

nt/ Sports/
Exercise nt
What Happens, When, in What Sequence?
Time Dimension in Augmented Product (Fig 3.3)
Reservation
Parking Get car
Check in Check out
Internet Internet
Use
room USE GUESTROOM OVERNIGHT
internet
Porter
Pay TV
Meal
Room service
Time Frame of An Overnight Hotel Stay

Before Visit
(Real-time service use)
Flowcharting Service Delivery
Helps to Clarify Product Elements
Offers way to understand totality of customers
service experience
Useful for distinguishing between core product
itself and service elements that supplement core
Restaurants: Food and beverage (core)
Reservations (supplementary services)
Shows how nature of customer involvement with
service organizations varies by type of service:
People processing
Possession processing
Mental Stimulus processing
Information processing
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?

Simple Flowchart for Delivery of a
People-Processing Service (Fig 3.4)
People Processing Stay at Motel

Spend Night in Room
Check In Check Out

Park Car Breakfast
Maid Makes up Room

Breakfast Prepared
Simple Flowchart for Delivery of a
Possession-Processing Service (Fig 3.4)
Possession Processing Repair a DVD Player

Travel to Store Technician Examines Leave Store Return, Pick up (Later) Play
Player, Diagnoses Player and Pay DVDs at Home
Problem
Technician Repairs Player
Simple Flowchart for Delivery of Mental
Stimulus-Processing Service (Fig 3.4)
Mental Stimulus Processing Weather Forecast
Turn on TV, Select View Presentation of Confirm Plans for

Channel Weather Forecast Picnic
Collect Weather Data Meteorologists Input Data to Models and Creates Forecast from Output TV Weatherperson Prepares Local Forecast
Weather Forecasting Is a Service
Directed at Customers Minds (Fig 3.5)
Simple Flowchart for Delivery of An
Information-Processing Service (Fig 3.4)
Information Processing Health Insurance

Printed Policy
Learn about Options
Select Plan, Insurance Coverage
Pay Documents Arrive
Complete Forms Begins
University and Insurance Company Agree on Terms of

Coverage Customer Information Entered in Database
The Flower of Service (Fig 3.6)
Information
Payment Consultation
Billing Core Order Taking
Exceptions Hospitality
Safekeeping
KEY:
Facilitating elements
Enhancing elements
The Flower of Service:
Facilitating ServicesInformation
Customers often require

information about how to obtain
and use a product or service.
Examples of elements:
Core
Directions to service site

Schedule/service hours
Prices
Conditions of sale
Usage instructions
Facilitating ServicesOrder Taking
Customers need to know what

is available and may want to
secure commitment to
delivery. The process should
be fast and smooth.
Core
Applications
Order entry
Reservations and check-in
Facilitating ServicesBilling
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
Facilitating ServicesPayment
Customers may pay faster

and more cheerfully if you
make transactions simple
and convenient for them.
Core
Self service payment

Direct to payee or intermediary
Automatic deduction
Enhancing ServicesConsultation
Value can be added to goods

and services by offering advice
and consultation tailored to
each customers needs and
situation.
Core
Customized advice
Personal counseling
Management consulting
Enhancing ServicesHospitality
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!
Greeting
Waiting facilities and amenities
Food and beverages
Toilets and washrooms
Security
Enhancing ServicesSafekeeping
Customers prefer not to worry

about looking after the personal
possessions that they bring
with them to a service site.
Looking after possessions

customers bring with them
Caring for goods purchased
(or rented) by customers
Enhancing ServicesExceptions
Customers appreciate some

flexibility when they make
special requests and expect
responsiveness when things
dont go according to plan.
Core
Special requests in advance

Complaints or compliments
Problem solving
Restitution
Managerial Implications
To develop product policy and pricing strategy, managers

need to determine:
Which supplementary services should be offered as a standard
package accompanying the core
Which supplementary elements could be offered as options for an
extra charge
In general, firms that compete on a low-cost, no-frills

basis needs fewer supplementary elements than those
marketing expensive, high-value-added services
Each flower petal must receive consistent care and

concern to remain fresh and appealing
Developing New Services
A Hierarchy of
New Service Categories (1)
1. Major service innovations

New core products for previously undefined markets
2. Major process innovations

Using new processes to deliver existing products with added
benefits
3. Product-line extensions
Additions to current product lines
4. Process-line extensions
Alternative delivery procedures
A Hierarchy of
New Service Categories (2)
5. Supplementary service innovations

Addition of new or improved facilitating or enhancing elements
6. Service improvements
Modest changes in the performance of current products
7. Style changes
Visible changes in service design or scripts
Reengineering Service Processes
Service processes affect not only customers, but also

cost, speed, and productivity with which desired
outcome is achieved
Reengineering involves analyzing and redesigning
processes to achieve faster and better performance
Running tasks in parallel instead of sequence can
reduce/eliminate dead time
Examination of processes can lead to creation of

alternative delivery methods that constitute new
service concepts
Add/eliminate supplementary services
Resequence delivery of service elements
Offer self-service options
Physical Goods as a Source Of
New Service Ideas
Services can be built around rentals: Alternatives to

owning a physical good and/or doing work oneself
Customers can rent goodsuse and return for a feeinstead of
purchasing them
Customers can hire personnel to operate own or rented equipment
Any new durable good may create need for after-sales
services now and in futurepossession processing
Shipping
Installation
Problem-solving and consulting advice
Cleaning and maintenance
Upgrades
Removal and disposal
Creating Services as Substitutes for
Owning and/or Using Goods (Fig 3.10)
Rent Use of a
Own a Physical Good Physical Good
Perform Work Drive Own Car Rent a Car and Drive

it
Oneself Use Own Computer
Rent Use of
Computer
Hire Someone
Hire a Chauffeur to Hire a Taxi or
Drive Limousine
to Do Work
Hire a Typist to Type Send Work Out to a
Secretarial Service
Caterpillar Promotes Its
Service Businesses (Fig 3.11)
Reprinted Courtesy of Caterpillar, Inc.

Achieving Success in Developing
New Services
Services are not immune to high

failure rates that plague new
manufactured products
dot.com companies
In developing new services

Core product is of secondary
importance
Ability to maintain quality of the
total service offering is key
Accompanying marketing support
activities are vital
Market knowledge is of utmost
importance
Success Factors in
New Service Development
Market synergy
Good fit between new product and firms image/resources
Advantage versus competition in meeting customers needs
Strong support from firm during/after launch
Firm understands customer purchase decision behavior
Organizational factors
Strong interfunctional cooperation and coordination
Internal marketing to educate staff on new product and its
competition
Employees understand importance of new services to firm
Market research factors
Scientific studies conducted early in development process
Product concept well defined before undertaking field studies
Planning and Branding Service Product
Programme and Project Management
Strategic Planning
Operational Efficiency
Sales Management
Customer Care Programme Management
Market Positioning
Product Positioning
Competitive Analysis
Branding The Service Product
Branding Strategy strategy to differentiate products, companies and to build

economic value for both the consumer and the brand owner
Brand
Logo
Legal instrument
Company
Short hand
Risk reducer
Postioning
Personality
Cluster of values
Vision
Image
Relationship
Powerful market message
Capture the attention of your target audience
Deliver a clear and memorable message
Captures your companys personality
Establishes your companys competitive advantage
It should help in communicating something important for
your product and service
Short , memorable and pronounceable and distinguish

from competitior
Marketing Activities
Core Content Creation
Market Analysis
Awareness
Demand Generation
Distributing
Services
through
Physical and
Electronic
Channels
2 nd P: place
and time
Applying the Flow Model of
Distribution to Services
Experiences, performances and solutions are not shipped or

stored
Distribution impacts the typical sales cycle in three ways:
1. Information and promotion flow: distribution of information

and promo materials relating to service offer. Objective: to
get the customer to buy the service
2. Negotiation flow: reaching an agreement on service features

and configuration, terms of offer, so purchase contract can
be closed . Eg sell a ticket
3. Product flow: services like people/possession processing

require a physical facility for service delivery. Here dist
strategy requires development of local sites. Eg internet
banking etc
Using Websites for Service Delivery
Information
Read brochure/FAQ; get schedules/
directions; check prices
Payment Consultation
Pay by bank card Conduct e-mail dialog
Direct debit Use expert systems
Billing Order-taking
Receive bill Core Make/confirm reservations
Make auction bid Submit applications
Check account status Order goods, check status
Exceptions Hospitality
Make special requests
Record preferences
Resolve problems
Safekeeping
Track package movements
Check repair status
Core: Use Web to deliver information-based core services
Distribution Options for Serving Customers
Customers visit service site
Service providers go to customers
Service transaction is conducted remotely
Six Options for Service Delivery
(Table 4.1)
Availability of Service Outlets

Type of Interaction between Customer Single Site Multiple Sites
and Service Organization
Theatre Bus service

Customer goes to service organization
Barbershop Fast-food chain
House painting Mail delivery

Service organization comes to
customer Mobile car wash
Credit card Broadcast

Customer and service organization company network
transact remotely (mail or electronic
communications) Local TV station Telephone
company
Options for service delivery
Channel Preferences Vary
among Customers
use of diff channels to deliver the same service cost

implications: eg banking services
For complex and high-perceived risk services, people

rely on personal channels eg loans
Individuals with greater confidence and knowledge about

a service/channel use impersonal and self-service
channels
Customers with social motives use personal channels
Convenience is a key driver of channel choice
PLACE AND TIME DECISIONS
How to decide on place and time
Understand customer needs and expectations,

competitive activity,and nature of service operation
Where should a service be located in a brick and mortar

context
Cost, productivity,access to labor
When should be delivered
Past history- fixed hours of work,legal and social norms
Caused inconvenience
change to 24/7 service
Delivering Services in
Cyberspace
Service Delivery Innovations
Facilitated by Technology
Eg Swissotel
Technological Innovations
Development of smart mobile telephones and PDAs as well as Wi-Fi
high-speed Internet technology that links users to Internet from almost
anywhere
Voice-recognition technology
Websites
Smart cards
- Store detailed information about customer
- Act as electronic purse containing digital money
Increase accessibility of services
Deliver right information or interaction at right time
Create and maintain up-to-date real-time information
e-Commerce: Move to Cyberspace
Internet facilitates 5 categories of flow

Information
Negotiation
Service
Transactions
Promotion
Electronic channels offer complement/alternative to
traditional physical channels
Convenience (24-hour availability, save time, effort)
Ease of obtaining information online and searching for
desired items
Better prices than in many bricks-and-mortar stores
Broad selection
e-Commerce: Move to Cyberspace
Recent Developments link Websites, customer

management (CRM) systems, and mobile telephony
Integrating mobile devices into the service delivery

infrastructure can be used as means to:
Access services
Alert customers to opportunities/problems
Update information in real time
Role of Intermediaries
Many organizations find it cost effective to outsource
certain service tasks. Eg travel agents booking etc
Splitting Responsibilities For
Supplementary Service Elements
As created by As enhanced As experienced
originating firm by distributor by customer
Core + = Core
Core product Supplementary Total experience

services and benefits
Challenges for original supplier

Act as guardian of overall process
Ensure that each element offered by intermediaries fits overall service concept
Franchising
Popular way to expand delivery of effective service

concept
Franchising is a fast growth strategy, when
Resources are limited
Long-term commitment of store managers is crucial
Local knowledge is important
Fast growth is necessary to pre-empt competition
Study shows significant attrition rate among franchisors

in the early years of a new franchise system
One-third of all systems fail within first 4 years
Three-fourths of all franchisors cease to exist after 12 years
Franchising
Disadvantages of franchising
Some loss of control over delivery system and, thereby, over how
customers experience actual service
Effective quality control is important yet difficult
Conflict between franchisees may arise especially as they gain
experience
Alternative: license another supplier to act on the

original suppliers behalf to deliver core product, for
example:
Trucking companies
Banks selling insurance products
The Challenge of
Distribution in Large
Domestic Markets
The Challenge of Distribution In
Large Domestic Markets
Marketing services (i.e., physical logistics) face

challenges due to:
Distances involved (geographic areas)
Existence of multiple time zones
Multiculturalism (especially, immigrants and indigenous people)
Differences in laws and tax rates
Large U.S. companies counter this by:

Targeting specific market segments
Seeking out narrow market niches
Serving multiple segments across a huge geographic area

is biggest marketing challenge
Distributing Services
Internationally
How Service Processes Affect
International Market Entry
People processing services require direct contact with

customers
Possession processing involves services to customers
physical possessions
Information-based services include mental processing
services and information processing services
People processing services require direct contact with

customers
- Export the service concept: act alone or in partnership
with local suppliers,reach out to new customers,or
follow existing corporate or individual customers or
both. Eg chain restaurants
- Import customers: customers are invited to service
factory with distinct appeal eg bentota ,Goa,medical
tourism
- Transport customers to new locations: operate new
routes and destinations
Possession processing involves services to customers

physical possessions. Eg repair an dmaintenance
,cleaning,warehousing
Information-based services include mental processing

services and information processing services: mental
processing and information processing
- Export service to local factory: college courses
- Import customers Eg students studying abroad
- Export info via telecom and transform it locally:

downloading data
Barriers to International Trade in Services
Passage of free-trade legislation is important facilitator

of transnational operations
Despite efforts of WTO and GATT, operating in

international markets still difficult
Factors Favoring Adoption of
Transnational Strategies
Transnational strategy involves integration of strategy

formulation and its implementation across all countries
Market drivers of common customers across countries and

corporate standardization leading to supplier consolidation
Competition
Technology
Cost
Government policies
Internationalization Approaches
Export information-based services
Use third parties to market/deliver service concept
Control service enterprise abroad
Impact of Globalization Drivers on
Various Service Categories (1) (Table 4.2)
Globalizatio People Possession Information

n drivers processing processing based
Competition Simultaneity of Technology drives Highly vulnerable
production and globalization of to global
consumption limits competitors with dominance by
leverage of foreign technical edge competitors with
competitive monopoly or
advantage, but competitive
management advantage in
systems can be information
globalized
Market People differ Level of economic Demand for many

economically and development services is derived
culturally, so needs impacts demand to a significant
for service and for services to degree from
ability to pay may individually owned economic and
vary goods educational levels
Impact of Globalization Drivers on
Various Service Categories (2) (Table 4.2)
Globalization People processing Possession Information
Drivers processing based
Technology Use of IT for delivery of Need for technology- Ability to deliver
supplementary services based service delivery core services
may be a function of systems depends on through remote
ownership and possessions requiring terminals may be a
familiarity with service and the cost function of
technology trade-offs in labour investment in
substitution computerization,
etc.
Cost Variable labour rates Variable labour rates Major cost elements
may impact on pricing in may favor low-cost can be centralized
labour-sensitive services locations and minor cost
elements localized
Government Social policies (e.g., Policies may Policies may impact

health) vary widely and decrease/increase demand and supply
may affect labour cost, cost and encourage/ and distort pricing
etc. discourage certain
activities
Summary - Chapter 4
Distribution enables information and promotion flow,

negotiation flow, and product flow
Physical and electronic channels play different roles in
the distribution and need to compliment each other
The original service supplier should manage the overall
process of supplementary services to the customer
The drivers of globalization of services are competition,

technology, cost and government
People processing services, possession processing
services, and information-based services impact five
groups of drivers differently
Integrated Service Marketing
Communications
Objectives
Role of marketing communications in services
Challenges of service communications
Marketing communications planning
Marketing communications mix
Role of the internet, and other electronic media in

service marketing communications
Role of corporate design
Integrated marketing communications

Role of Marketing communications
Position and differentiate the service
Helps Customers to evaluate Service Offerings
Promote the Contribution of the Service Personnel
Add Value through Communication Content
Facilitate Customer Involvement in Production
Stimulate or Dampen Demand to match Capacity
Challenges of Service Communications
Problems of Intangibility
Intangibility creates 4 problems :

Generality
Items that comprise a class of objects, persons, or

events
Non-searchability
Cannot be searched or inspected before purchase

Abstractness
No one-to-one correspondence with physical objects

Mental impalpability
Customers find it hard to grasp benefits of complex,

multidimensional new offerings
Overcoming Intangibility
To overcome intangibility
Use tangible cues in advertising
Use metaphors to communicate benefits

of service offerings
Marketing Communications Planning
The 5 Ws Model
Who is our target audience?
What do we need to communicate and achieve?
How should we communicate this?
Where should we communicate this?
When do communications need to take place?
Target Audience: 3 Broad Categories
Prospects
Employ traditional communication mix because prospects are not
known in advance
Users
More cost effective channels
Employees
Secondary audience for communication campaigns through public
media
Shape employee behavior
Part of internal marketing campaign using company-specific
channels
Common Educational and Promotional
Objectives in Service Settings
Create memorable images of specific companies and

their brands
Build awareness/interest for unfamiliar service/brand
Compare service favorably with competitors offerings
Build preference by communicating brand strengths and

benefits
Reposition service relative to competition
Reduce uncertainty/perceived risk by providing useful

info and advice
Common Educational and Promotional
Objectives in Service Settings
Provide reassurance (e.g., promote service guarantees)
Encourage trial by offering promotional incentives
Familiarize customers with service processes before use
Teach customers how to use a service to best advantage
Stimulate demand in off-peak, discourage during peak
Recognize and reward valued customers and employees
Messages through Marketing Channels:
Advertising
Build awareness, inform, persuade, and remind
Challenge: How stand out from the crowd?
Effectiveness remains controversial
Research suggests that less than half of all ads generate

a positive return on their investment
Public Relations
PR/Publicity involves efforts to stimulate positive

interest in an organization and its products through
third parties
e.g., press conferences, news releases, sponsorships
Corporate PR specialists teach senior managers how to

present themselves well at public events, especially
when faced with hostile questioning
Unusual activities can present an opportunity to

promote companys expertise
Direct Marketing
Mailings, recorded telephone messages, faxes, email
Potential to send personalized messages to highly

targeted micro segments
Need detailed database of information about customers and
prospects
Direct Marketing
Advance in on-demand technologies empower

consumers to decide how and when they prefer to be
reached, and by whom
e.g. email spam filters, pop-up blockers, podcasting
Permission Marketing goal is to persuade customers to

volunteer their attention
Enables firms to build strong relationships with customers
e.g., People invited to register at a firms website and specify what
type of information they like to receive via email
Messages through Marketing Channels: Sales
Promotion
Defined as Communication that comes with an incentive
Should be specific to a time period, price, or customer group
Motivates customers to use a specific service sooner, in greater volume

with each purchase, or more frequently
Personal Selling
Interpersonal encounters educate customers and promote

preferences for particular brand or product
Common in B2B and infrequently purchased services
Many B2B firms have dedicated sales force to do personal

selling
Customer assigned to a designated account manager
For services that are bought less often, firms
representative acts as consultant to help buyers make
selection
Face-to-face selling of new products is expensive
telemarketing is lower cost alternative
Trade Shows
Popular in B2B marketplace
Stimulate extensive media coverage
Many prospective buyers come to shows
Opportunity to learn about latest offerings from wide

variety of suppliers
Sales representative who usually reaches four to five

potential customer per day may be able to get five
qualified leads per hour at a show
Messages through Internet:
Companys Website
The web is used for a variety of communication tasks

Creating consumer awareness and interest
Providing information and consultation
Allowing two-way communication with customers through email
and chat rooms
Encouraging product trial
Allowing customers to place orders
Measuring effectiveness of advertising or promotional campaigns
Innovative companies look for ways to improve the
appeal and usefulness of their sites
Online Advertising
Banner advertising
Placing advertising banners and buttons on portals such as Yahoo,
Netscape and other firms websites
Draw online traffic to the advertisers own site
Web sites often include advertisements of other related, but non

competing services
Online Advertising
Search engine advertising

Reverse broadcast network: search engines let advertisers know
exactly what consumer wants through their keyword search
Can target relevant messages directly to desired consumers
Several advertising options:
Pay for targeted placement of ads to relevant keyword

searches
Sponsor a short text message with a click-through link
Buy top rankings in the display of search results
Moving from Impersonal to Personal
Communications
There used to be a difference between personal and

impersonal communication
Technology has created a gray area between the two
Direct mail and email can be personalized
Electronic recommendation agents can also personalize

communications
With advances of on-demand technologies, consumer

are increasingly empowered to decide how and when
they like to be reached
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 3 -
Messages through Service Delivery Channels
Frontline employees
Communication from frontline staff can be for the core service or
supplementary elements
New customers in particular need help from service personnel
Service outlets
Can be through banners, posters, signage, brochures, video
screens, audio etc.
Self-service delivery points

ATMs, vending machines and websites are examples
Customer Training
Messages Originating from Outside the
Organization
Word of Mouth (WOM)

Recommendations from other customers viewed as more credible
Strategies to stimulate positive WOM:
Having satisfied customers providing comments

Using other purchasers and knowledgeable
individuals as reference
Creating exciting promotions that get people
talking
Offering promotions that encourage customers to
persuade their friend to purchase
Developing referral incentive schemes
Messages Originating from Outside the
Organization
Blogs A new type of online WOM

Becoming increasingly popular
Communications about customer experiences influence opinions of
brands and products
Some firm have started to monitor blogs as form of market
research and feedback
Media Coverage
Compares, contrasts service offerings from competing
organizations
Advice on best buys
Ethical Issues in Communication
Advertising, selling, and sales promotion all lend themselves easily to

misuse
Communication messages often include promises about benefits and

quality of service delivery. Customers are sometimes disappointed
Why were their expectations not met?

Poor internal communications between operations and marketing personnel
concerning level of service performance
Over promise to get sales
Deceptive promotions
Unwanted intrusion by aggressive marketers into peoples personal lives
The Role of
Corporate Design
Strategies for Corporate Design
Many service firms employ a unified and distinctive

visual appearance for all tangible elements
e.g. Logos, uniforms, physical facilities
Provide recognition and strengthen brand image
Especially useful in competitive markets to stand out

from the crowd and be instantly recognizable in
different locations
Integrating Marketing Communications
IMC ties together and reinforces all communications to

deliver strong brand identity
Ownership of IMC can be given to a single department

(e.g. marketing) or by appointing a marketing
communications director
PRICING OF SERVICES
Why Pricing of Services is different?
Customer knowledge of service price a reference price is a

price point in memory for a good or a service
High degree of variability often exists across providers of

services not every physician defines a checkup the same way
Providers are unwilling to estimate prices in advance legal

service providers; fundamental reason being they do not know
themselves what the service will involve until the process of
service delivery unfolds
Individual customer needs vary your haircut fro the
same stylist may cost you differently
Price invisibility particularly in financial services,

most customers know about only the rate of return
and not the costs they pay in form of fund and
insurance fees
Role of Non-monetary Costs
Demand is not just a function of monetary price but is

influenced by other costs as well. Like:
Time cost since most services require direct participation of the consumer
and thus their real time
Search costs - the effort invested to identify and select among services you
desire since prices for services are rarely displayed in shelves an each service
establishment offers only one brand of service (except brokers & agents)
Convenience costs like customers have to travel to the service, if service

hours do not coincide with customers available time
Psychological costs fear of not understanding (education), fear of rejection

(bank loan), fear of results (surgery)
Price as an Indicator of Service Quality
Customers prefer cues like company reputation, level

of advertising to access the quality
In other situations when quality is hard to detect or

price varies a great deal within a class of services,
consumers may believe that price is the best indicator
of quality
In case of high risk services like medical treatment,

customer looks price as a surrogate for quality
Thus in addition to cover the cost and match

competitors price, prices must be set with care to
convey the appropriate service quality
Price as an Indicator of Service
Quality
Infers High Quality

Service
Infers Low Quality Service
APPROACHES TO PRICING
SERVICES
COST BASED PRICING
COMPETITION BASED PRICING
DEMAND BASED PRICING
Cost -Based Pricing
Price = Direct costs + Overhead costs + Profit Margin
Challenges:
Costs are difficult to trace as cost based pricing involves defining the units
in which a service is purchased
Thus services are sold in terms of input units (like hours) rather units of
measured output
Labor is more difficult to price than material
Used in industries in which cost can be estimated in advance like,
advertising, construction
Competition-Based Pricing
Monitor competitors pricing strategy (especially if service lacks

differentiation like dry cleaning and its an oligopoly like airline)
Challenges:
Small firms may charge too and not make margins high enough to remain in
business
Heterogeneity of services across and within providers makes it difficult to
compare
Demand-Based Pricing
Relate price to value perceived by customer i.e. prices are based

on what customers will pay for the services provided
Challenges:
Monetary price must be adjusted to reflected the value of non-
monetary costs
Information on service costs may be less available to customers,
making monetary price not as salient indicator to quality
Value has 4 meanings:
1. Value is low price equate value with low price like, a
carpet on sale
2. Value is everything I want in a service emphasize the

benefits rather price like, best education for a MBA
3. Value is the quality I get for the price I pay trade off
between the money they give up and the quality they
receive like, for a business travel, lowest price for a
quality brand
4. Value is all that I get for all that I give consider all
benefits and sacrifice components (money, time, effort)
Designing and
Managing
Service
Processes
Overview
Flowcharting Customer Service Processes
Blueprinting Services to Create Valued Experiences and

Productive Operations
Service Process Redesign
The Customer as Co-Producer
Self-Service Technologies
Flowcharting Customer
Service Processes
Flowcharting Service Delivery
Helps to Clarify Product Elements
Technique for displaying the nature and sequence of the
different steps in delivery service to customers
Offers way to understand total customer service experience
Shows how nature of customer involvement with service

organizations varies by type of service:
People processing
Possession processing
Mental Stimulus processing
Information processing
Flowcharts for People and Possession Processing
Services
Flowcharts for Mental Stimulus and Information
Processing Services
Blueprinting Services to
Create Valued Experiences
and Productive Operations
Developing a Blueprint
Developing a Blueprint
Identify key activities in creating and delivering service
Define big picture before drilling down to obtain a higher level
of detail
Advantages of Blueprinting
Distinguish between frontstage and backstage
Clarify interactions and support by backstage activities and systems
Identify potential fail points; take preventive measures; prepare
contingency
Pinpoint stages where customers commonly have to wait
Key Components of a Service
Blueprint
Objectives:
Identify fail
points & risks
of excessive
waits
Set service
standards
Fail-proof
process
Blueprinting the Restaurant
Experience: Act 1
Blueprinting the Restaurant
Experience: A Three-Act Performance
Act 1: Prologue and Introductory Scenes
Act 2: Delivery of Core Product
Cocktails, seating, order food and wine, wine service
Potential fail points: Menu information complete? Menu intelligible?
Everything on the menu actually available?
Mistakes in transmitting information a common cause of quality
failure
Customers may not only evaluate quality of food and drink, but
how promptly it is served or serving staff attitudes
Act 3: The Drama Concludes
Remaining actions should move quickly and smoothly, with no
surprises at the end
Customer expectations: accurate, intelligible and prompt bill,
payment handled politely, guest are thanked for their patronage
Improving Reliability of Processes Through Fail-
Proofing
Identify fail points
Analysis of reasons for failure reveals opportunities for

failure-proofing to reduce/eliminate future errors
Need fail-safe methods for both employees and

customers
Setting Service Standards and Targets
Service providers set standards for each step sufficiently

high to satisfy and even delight customers
Include time parameters, script and prescriptions for appropriate
style and demeanor
Must be expressed in ways that permit objective measurement
Performance targets specific process and team

performance targets for which staff are responsible for
Evaluated based on distinction between standards and

targets
Setting Service Standards and Targets
First impression is
important
Affects customers evaluations
of quality during later stages of
service delivery as customer
perceptions of service
experiences tend to be
cumulative
For low-contact service, a

single failure committed
front stage is relatively
more serious than in a high-
contact service
Setting Standards and Targets for Customer Service
Processes
Responsiveness
Processing time
Reliability 80% of all
to approve 24 hours
Competence applications in 24
applications
Accessibility hours
Courtesy
Communication
Credibility Creates a Base to
Confidentiality Measure Customer
Listening to the Satisfaction
customer
Redesigning Service
Processes
Why Redesign?
Revitalizes process that has become outdated
Changes in external environment make existing practices

obsolete and require redesign of underlying processes
Rusting occurs internally

Natural deterioration of internal processes; creeping bureaucracy;
evolution of spurious, unofficial standards
Symptoms:
- Extensive information exchange
- Data that is not useful
- High ratio of checking control activities to value-
adding activities
Why Redesign?
Institutions are like steel beamsthey tend to rust. What was once smooth and shiny and nice
tends to become rusty.
Mitchell T. Rabkin, MD,

former president of Bostons Beth Israel Hospital
Why Redesign?
Redesign aims to achieve these performance measures:

Reduced number of service failures
Reduced cycle time from customer initiation of a service process to
its completion
Enhanced productivity
Increased customer satisfaction
Process Redesign: Approaches and
Potential Benefits
Process Redesign: Approaches and Potential
Benefits
The Customer as Co-
Producer
Levels of Customer Participation
Customers as Partial Employees
Customers can influence productivity and quality of

service processes and outputs
Customers not only bring expectations and needs but

also need to have relevant service production
competencies
For the relationship to last, both parties need to

cooperate with each other
Managing Customers
Self-Service Technologies
Self-Service Technologies (SSTs)
SSTs are the ultimate form of customer involvement

where customers undertake specific activities using
facilities or systems provided by service supplier
Customers time and effort replace those of employees
Information-based services lend selves particularly well

to SSTs
Used in both supplementary services and delivery of core product
Self-Service Technologies (SSTs)
Many companies and government organizations seek to

divert customers from employee contact to Internet-
based self-service
Advantages: Disadvantages:
Time and Cost savings Anxiety and stress
experienced by
Flexibility customers who are
Convenience of location uncomfortable with
using them
Greater control over
service delivery Some see service
encounters as social
High perceived level of experiences and prefer
customization to deal with people
What Aspects Of SSTs Please Or Annoy
Customers?
People love SSTs when People hate SSTs when

SST machines are conveniently SSTs fail system is down, PIN
located and accessible 24/7 often numbers not accepted, etc.
as close as the nearest computer!
Customers themselves mess up
forgetting passwords; failing to
Obtaining detailed information andprovide information as requested;
completing transactions can be done
simply hitting wrong buttons
faster than through face-to-face or
telephone contact
Key weakness: Few firms incorporate service recovery systems such

that customers are still forced to make telephone calls or personal
visits
Putting SSTs to Test by
Asking a Few Simple Questions
Does the SST work reliably?

Firms must ensure that SSTs are dependable and user-friendly
Is the SST better than interpersonal alternatives?

Customers will stick to conventional methods if SST doesnt create
benefits for them
If it fails, what systems are in place to recover?

Always provide systems, structures, and technologies that will
enable prompt service recovery when things fail
Managing Customers Reluctance to Change
Increasing customers participation level in a service can

be difficult
Marketing communications to be used to:

Prepare customer for change
Explain the rationale and benefits
What customers need to do differently in the future
Summary
Service blueprinting can be used to design a service and

create a satisfying experience for customers. Key
components of the blueprint include:
Blueprinting a restaurant (or other service) can be a

three-act performance
Prologue and introductory scenes
Delivery of the core product
Conclusion of the drama
Summary
Service standards and targets are different and can be

used to evaluate performance
Service process redesign reduces service failure and

enhances productivity
When the customer is a co-producer, issues to consider

are
Levels of customer participation
Self-service technologies (SST)
Psychological factors in customer co-production
Aspects of SST that please or annoy customers
Chapter 12-Lovelock
Chapter 7-Zeithaml
Managing Customer
Relationships and
Building Loyalty
Loyalty
Loyalty
Defector
Zero Defection Rate
Why Loyalty???-Bucket with
Holes
Increased
New purchase by
customers some
customers
Lost Customers
Lost Customers Decreased purchase by som

customers
Why Loyalty is Important
Customers become more profitable the

longer they remain with a firm:
Increase purchases and/or account balances
Customers/families purchase in greater quantities as
they grow
Reduced operating costs
Fewer demands from suppliers and operating
mistakes as customer becomes experienced
Referrals to other customers
Positive word-of-mouth saves firm from investing
money in sales and advertising
Price premiums
Long-term customers willing to pay regular price
Willing to pay higher price during peak periods
But.
Must not assume that loyal customers are always

more profitable than those making one-time
transactions
Costs
Not all types of services incur heavy promotional
expenditures to attract a new customer
Walk-in traffic more important at times
Revenue
Large customers may expect price discounts in return for
loyalty
Revenues dont necessarily increase with time for all
types of customers (depends on product life cycle)
Customer Firm Relationship
Transactional Marketing
One transaction or a series of transactions does not necessarily
constitute a relationship
Requires mutual recognition and knowledge between the parties
Database Marketing:
Includes market transaction and information exchange
Technology is used to
(1) identify and build database of current and
potential customers
(2) deliver differentiated messages based on
customers characteristics
(3) track each relationship to monitor cost of
acquiring that customer and lifetime value of
resulting purchases
Customer Firm Relationship
Interaction Marketing:
Face-to-face interaction between customers and suppliers
representatives
Value is added by people and social processes
Increasing use of technologies make maintaining meaningful
relationships with customers a marketing challenge
For example, self-service technology, interactive

websites, call centers
Network Marketing:
Common in b2b context where companies commit resources to
develop positions in network of relationships with stakeholders
and relevant agencies
Who is a customer???
Relationship of partner
Actively recommends you
Supports you passively
Repeat business, but
passive or negative attitude
Carried out one transaction
Potential customer
The Wheel of Loyalty
The Wheel of Loyalty
3. Reduce 1. Build a
Churn Drivers Foundation
for Loyalty
Conduct churn diagnostic
Address key churn drivers
Segment the market
Be selective in acquisition
Enabled Implement Use effective tiering of service.
through: complaint handling
Frontline staff and service recovery
Account
Customer
Increase switching Deliver quality service.
managers
costs
Loyalty
Membership
programs
CRM
Systems 2. Create Loyalty
Build higher level bonds
Bonds
Deepen the
relationship
Give loyalty rewards
Searching for ValueNot Just
Volume
Focus on number of customers served as well
as value of each customer
Heavy users who buy more frequently and in larger
volumes are more profitable than occasional users
Avoid targeting customers who buy based on lowest
price
Firms that are highly focused and selective in

their acquisition of customers grow faster
Right customers are not always high
spenders
Can come from a large group of people that no
other supplier is serving well
Different segments offer different value

Effective Tiering of Service
The Customer Pyramid
Good Relationship Which segment sees high
Customers value in our offer, spends more
with us over time, costs less to
Platinum maintain, and spreads positive
word-of-mouth?
Gold
Which segment costs us
Iron time, effort, and money,
yet does not provide return
we want? Which segment
Lead is difficult to do business
with?
Poor
Relationship Source: Valarie A Zeithaml, Roland T Rust, and Katharine N. Lemon, The Customer
Customers Pyramid: Creating and Serving Profitable Customers, California Management Review 43,
no. 4, Summer 2001, pp.118142.
The Customer Satisfaction
Loyalty Relationship
100 Apostle
Zone of Affection
Loyalty (Retention)
80
Zone of Indifference Near Apostle

60
40 Zone of
Defection
20
Terrorist 0
1 2 3 4 5
Very Dissatisfied Neither Satisfied Very
Dissatisfied Satisfied
Source: Adapted from Thomas O. Jones and W. Earl Satisfaction
Sasser, Jr., Why Satisfied Customers Defect,
Harvard Business Review, November-December
1995, p. 91.
Loyalty Bonds with Customers
Stable Bun &

m Pricing Cro dling
e
c ss
o lu n Sel &
V e ling
qu e y
Co lat
Fr
Re
Sy mat ed
ms n
nt on
s te io
t 1. Financial Bond
in s
Investments nfo gra
i
4. Structural Bond
uo i
e
us ps
2. Social Bond
r
h
Int
I
Relationships
Personal
Excellent
Joint
Service and Value
cu Am Bo
So
s o n
Shared
c
om ng ds
3. Customization Bond
i
process
al
e
es
rs
and
equipme
Anticipation/ Customer
nts Innovation Intimacy
Mass
customization
The Relationship Challenges
Customer is not always right
The Wrong Segment
Not Profitable in the Long Term
Difficult Customers
Personal
Organizational
The
SERVQUA
L
Model
By Group-3
Section-C
PGDM- Ist Year
Introduction
Service quality is an approach to manage business processes
in order to ensure full satisfaction of the customers & quality
in service provided. It works as an antecedent of customer
satisfaction.
If expectations are greater than performance, then perceived
quality is less than satisfactory and hence customer
dissatisfaction occurs.
SERVQUAL is a service quality framework, developed in the
eighties by Zeithaml, Parasuraman & Berry, aiming at
measuring the scale of Quality in the service sectors.
SERVQUAL was originally measured on 10 aspects of service
quality: reliability, responsiveness, competence, access,
courtesy, communication, credibility, security, understanding
the customer, and tangibles, to measure the gap between
customer expectations and experience.
SERVQUAL as a Measuring Tool
In 1988 the 10 components were collapsed into five dimensions
(RATER). Reliability, tangibles and responsiveness remained
distinct, but the remaining seven components collapsed into two
aggregate dimensions, assurance and empathy.
Parasuraman et al. developed a 22-scale instrument with which to

measure customers expectations and perceptions (E and P) of the
five RATER dimensions. Four or five numbered items are used to
measure each dimension.
The instrument is administered twice in different forms, first to

measure expectations and second to measure perceptions.
Dimensions Scale
Reliability 4
Assurance 5
Tangibles 4
Empathy 5
Responsiveness 4
The Key Service Dimensions
The five SERVQUAL dimensions are: R-A-T-E-R:
1.RESPONSIVENESS - Willingness to help

customers and provide prompt service
2.ASSURANCE - Knowledge and courtesy of

employees and their ability to convey trust
and confidence
3.TANGIBLES - Appearance of physical facilities,

equipment, personnel, and communication
materials
4.EMPATHY - Caring, individualized attention the

firm provides its customers
5.RELIABILITY - Ability to perform the promised

service dependably and accurately
Conceptual Model of Service
Quality
GAP 1: Not knowing
what customers
expect
GAP 2: wrong service
quality standards
GAP 3: The service
performance gap
GAP 4: promises do
not match actual
delivery
GAP 5: The
difference between
customer perception
and expectation
The SERVQUAL Gaps
M a na ge m e nt E x p e c te d
Gap 1 P e r c e p t io n s
o f C u s to m e r
E x p e c t a t io n s
S e r v ic e
Commonly known as the management perception gap
Gap 1 results from a difference between what

customers expect and what management perceives
these expectations to be.
It indicates a problem with the understanding of the
market. This can occur, as a result of insufficient
research or communication failures.
E.g. : Management of ABC Dry cleaning Ltd perceives
that a particular segment simply expects low prices on
its service, when in fact, the expectation is a value-
for-money service.
The SERVQUAL Gaps
S e r v ic e M a na ge m e nt
Gap 2 Q u a lity
S p e c i f ic a t i o n s
P e r c e p t io n s
o f C u s to m e r
E x p e c t a t io n s
Commonly known as quality specification gap.
Gap 2 results from a difference between management

perceptions of what customers expect and the
specifications that management draws up when detailing
the service quality delivery actions that are required.
Service design and performance standards are pre-
requisites for bridging this gap.
E.g. : Most hotels do not do housekeeping in a room on
the day the customer is checking out. But has
management realised that the customer who is doing a
late checking out wants a clean room during that day?
The SERVQUAL Gaps
Gap 3 S e r v ic e
D e liv e r y
S e r v ic e
Q u a lity
S p e c i f ic a t i o n s
Commonly known as the Service delivery gap.
Gap 3 results from a mismatch between the service delivery

specifications required by management and the actual service
that is delivered by front line staff.
It is the difference between customer-driven service design
& standards, and the service delivery of the provider.
Managers need to audit the customer experience that their
organization currently delivers in order to make sure it lives
up to the expected level.
E.g. : Usually, all restaurants need to attend to every request
and orders of the customers. But very often when customers
place orders, they either do not receive the orders at all or
the waiter has confused it with that of another customer.
The SERVQUAL Gaps
Gap 4 S e r v ic e
D e liv e r y
E x te rn a l
C o m m u n ic a t io n s
to C u s to m e rs
Commonly known as market communication gap.
This is the gap between the delivery of the customer

experience and what is communicated to customers, i.e.
the discrepancy between actual service and the promised
one
All too often organizations exaggerate what will be
provided to customers, or discuss the best case rather than
the likely case, raising customer expectations and harming
customer perceptions.
E.g. A company commercialising slimming products boasts
that customers may lose up to 4-5 kgs/week. But they do
not specify that a strict diet and regular exercise must
accompany the treatment for it to have the desired effect.
The SERVQUAL Gaps
Gap 5 E x p e c te d P e r c e iv e d
S e r v ic e S e r v ic e
Commonly known as the perceived service quality gap.
Gap 5 may be identified as the overall difference between the

expected service and the perceived service experienced. Gap
5 results from the combination of Gaps 1 to 4
Customers' expectations have been shaped by word of mouth,

their personal needs and their own past service experiences.
Unless Gap 5 is kept under check, it may result in lost

customers, bad reputation, negative corporate image.
Causes for the Gaps
GAP 1 - not knowing what customers expect
E.g. : XYZ Events Ltd organised a wedding with the usual white
and blue decorations, when the customer had expected
something new and original.
Causes:
Lack of a marketing orientation to quality
Poorly interpreted information about customers expectations
Research not focused on demand quality
Too many layers between the front line personnel &
top level management
Causes for the Gaps
GAP 2 - The wrong service quality standards
E.g. : XYZ Events Ltd perceived that the customer wanted

a very nice reception with at least 2 waiters at each
table, but management eventually decided otherwise to
reduce costs.
Causes:
inadequate commitment to service quality
lack of perception of feasibility
inadequate task standardization
the absence of goal setting
Insufficient planning of procedures
Causes for the Gaps
GAP 3 - The service performance gap
E.g. : XYZ Events Ltd had promised the most exquisite catering
and wedding cake, but the food was not appreciable and the bride
didnt like the cake at all.
Causes:
Poor employee or technology fit - the wrong person or wrong
system for the job
Deficiencies in human resource policies such as ineffective
recruitment, role ambiguity, role conflict
Failure to match demand and supply
Too much or too little control
Lack of teamwork within the organisation
Causes for the Gaps
GAP 4 - When promises do not match actual delivery
E.g. : XYZ Events Ltd promised to have a Mercedes limousine for

the entry of the groom, but eventually the latter was given a
simple Nissan Sunny.
Causes:
inadequate horizontal communication
Over-promising in external communication campaign
Failure to manage customer expectations
Failure to perform according to specifications given to

customers
Causes for the Gaps
GAP 5 - The difference between customer perception of
service and the expectation they had
Usually the cause is the occurrence of the 4 other Gaps,

which results in a difference between customer perception
and the expectation they had. Ultimately the grooms
experience was way too far from what he had expected,
and thus results in dissatisfaction.
Other causes can be:

cultural background, family lifestyle, personality,
demographics, advertising, experience with similar service
information available online
Solution for the Gaps
No Solutions as such, but rather, measures that can be taken to minimize the gaps
Gap Definitions Measures

1 Customers expectations Use of good Customer Relationship Management Techniques to profile &
versus management know customers expectations, tastes and needs
perceptions E.g: XYZ Events Ltd should conduct sample surveys to know what customers
expect nowadays
2 Management perceptions Managers need to make sure the organization is defining the level of service
versus service they believe is needed.
specifications E.g.: XYZ Events Ltd could have offered pre-set wedding packages at
different prices with different services set.
3 Service specifications Managers need to audit the customer experience that their organization
versus service delivery currently delivers in order to make sure it lives up to the expected level.
E,g.: XYZ Events Ltd needs to ask customers to give their post experience
feedbacks
4 Service delivery versus Use of good Communication skills and avoid ambiguous or fraudulent terms
external communication: to confuse or mislead the customer.
E.g.: XYZ Events Ltd should clearly inform the customer about something
that will not be possible to implement
5 The discrepancy between Application of all the above measures to make sure the service delivered
customer expectations and meets the expectations of the customer
their perceptions of the
service delivered
Criticisms to SERVQUAL
It has been criticized that SERVQUAL's 5 dimensions
(RATER) are not universals, and that the model fails
to draw on established economic, statistical and
psychological theory.
There is little evidence that customers assess service

quality in terms of Perception / Expectation gaps.
SERVQUAL focuses on the process of service delivery,

not the outcomes of the service encounter.
There is a high degree of intercorrelation between

the five RATER dimensions, thus the scores obtained
cannot be exact.
SERVQUAL; Good or Bad???
SERVQUAL remains the most complete attempt to
conceptualize and measure service quality Nyeck, et al.
(2002)
The main benefit to the SERVQUAL measuring tool is the

ability of researchers to examine numerous service
industries such as healthcare, banking, financial services,
and education
Nyeck et al. (2002) reviewed 40 articles that made use of

the SERVQUAL measuring tool and discovered that few
researchers concerned themselves with the validation of
the measuring tool, which means it is well anchored as a
trusted model.
Service Quality is widely regarded as a driver of corporate

marketing and financial performance

Developing Service Concepts: Core and Supplementary Elements

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Developing Service Concepts: Core and Supplementary Elements

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Chapter 3:

Planning and Creating Services

The Flower of Service

Planning and Branding Service Products

Development of New Services

An offering that can be developed produced and

Service package is the service as the product is

The package consist of

Developing the service concept

Developing a basic service package

Developing an augmented service offering

A service product comprises all elements of service

The service concept is represented by:

In mature industries, core products often become

Figure 3.1 Distribution

Are supplementary services needed to facilitate use of

Should customers be charged separately for each service

Or should all elements be bundled at a single price?

Must address sequence in which customers will use

Question: Do customers expectations change during

Internet Entertainme Restaura

Time Frame of An Overnight Hotel Stay

Alternatively, should we cut service levels and charge less?

People Processing Stay at Motel

Check In Check Out

Maid Makes up Room

Possession Processing Repair a DVD Player

Technician Repairs Player

Mental Stimulus Processing Weather Forecast

Turn on TV, Select View Presentation of Confirm Plans for

Information Processing Health Insurance

University and Insurance Company Agree on Terms of

Billing Core Order Taking

Customers often require

Directions to service site

Customers need to know what

How much do I owe you?

Core Examples of elements:

Customers may pay faster

Self service payment

Value can be added to goods

Customers who invest time and

Core Examples of elements:

Customers prefer not to worry

Core Examples of elements:

Looking after possessions

Customers appreciate some

Special requests in advance

To develop product policy and pricing strategy, managers

In general, firms that compete on a low-cost, no-frills

Each flower petal must receive consistent care and

1. Major service innovations

2. Major process innovations

5. Supplementary service innovations

Service processes affect not only customers, but also

Examination of processes can lead to creation of

Services can be built around rentals: Alternatives to

Perform Work Drive Own Car Rent a Car and Drive

Reprinted Courtesy of Caterpillar, Inc.

Services are not immune to high

In developing new services

Programme and Project Management

Customer Care Programme Management