1. Unit-2
THE SERVICE PRODUCT

2. Service Product
• A service product is a bundle of features and
customer benefits.
• According to Lynnshostack, there are four
risks of attempting to describe services in
words alone.
1. Over Simplification
2. Incompleteness
3. Subjectivity
4. Biased Interpretation

3. The Basis Service Package
• A service product is a package of series of
service elements executed in proper order in
keeping with the needs and wants of the
consumer, with an intention to maximize
consumer satisfaction
• There are three elements in BSP:
Core Service
Facilitating Services (and goods)
Supporting Services (and goods)

4. The Basis Service Package Conti..
• Example: in a hospital,
 Core service is health care,
 Facilitating services are building consisting
of rooms, toilet etc.,similiarly doctors,
nurses medical equipment, medicines and
so on
 Supporting service may be a restaurant
inside the hospital

5. Customer Value Hierarchy

6. The Flower of Service
• Christopher Lovelock
developed the flower of
service, which indicates
the core service
surrounded by a cluster of
supplementary services
• The flower consists of
eight petals; four of them
are facilitating
supplementary services
and other four are
enhancing supplementary
services

7. The Facilitating Supplementary
Services
• Information:
 Sign boards to service site
 Service performance hours
 Charges for services
 Directions on using core and supplementary services
 Altering people
 Notices
 Conditions of sale/service
 Indicating the charges
 Documentation
 Reservation information
 Activity summaries
 Bills and receipts

8. The Facilitating Supplementary
Services Conti..
• Consultation:
Providing advice
Helping customers to use the
service
Clarifying doubts
Counseling personally
Offering management/Technical
consultancy

9. The Facilitating Supplementary
Services Conti..
• Order Taking:
Filling applications for membership
in associations and for becoming a
subscriber
For reservation of seats, tables,
rooms, and rentals
Entry of orders-online mail or
telephone order

10. The Facilitating Supplementary
Services Conti..
• Hospitality:
Greeting
Enquiry and reception
Waiting facilities
Bathroom kits food and
beverages
transportation

11. The Enhancing Supplementary
Services
• Safe Keeping:
 Baby care and pet care service
 Parking facilities
 Storage and baggage handling services
 Security and safe deposit services
 Goods packaging
 Pick up
 Transportation
 Delivery
 Installation of goods
 Cleaning and ensuring a healthy ambience

12. The Enhancing Supplementary
Services Conti..
• Exceptions
• Billing
• Payment

13. What is A New Service Product
• According to Booz, Allen and Hamiltan,
there can be six categories of new
products:
1. New to the world products
2. New product lines
3. Additions to the existing product line
4. Improvements and revisions of existing
products
5. Repositioning
6. Cost reductions

14. Steps in the Development
of a New Service
• Service firms may offer the service
product in three different forms:
1) A generalized fixed service
package
2) A generalized flexible service
package
3) Customized service package

15. Steps in the Development of a
New Service Conti..
1. Idea Generation
1.Front line
people
3. Support personnel,
2. Sales competitors,
personnel, professional
customers organizations,
researchers and social
organizations

16. Steps in the Development of a
New Service Conti..
2. Screening Ideas
Issues to be discussed:
-Suitability to the existing production system
-Requirement, availability, and affordability in
relation to financial resources, human resources,
technological resources, distribution system and
other resources
-In screening two types of errors are likely to occur:
-Go errors
-Drop errors

17. Steps in the Development of a
New Service Conti..
3. Concept Development and Testing
-Service concept includes the elements of a BSP, customer-
employee interaction and the service design document
-The service design document describes:
 The problem to which the solution is offered
 Reason for offering a new service
 List of sequential service processes and its benefits
 A rationale for the customer as to why he or she should have
the service
Service Blueprint: is a picture or map that portray the service accurately
-Concept Testing

18. Steps in the Development of a
New Service Conti..
4. Marketing Strategy Development
-The strategic plan will find out answers to the
following questions:
 Who are the target consumers?
 What is the size of the market?
 What is the competitive structure and their behaviour?
 What is the positioning strategy?
 What is the pricing strategy?
 What is the distribution strategy?
 What are the long term sales?
 What is the expected market share?
 What are the profit goals?

19. Steps in the Development of a
New Service Conti..
5. Business Analysis
6. Service Development
7. Market Testing
8. Commercialization
-At this stage four decisions are of utmost
importance:
 When should the service be offered?
 Where should be the service be offered?
 To whom should the service be offered?
 How should the service be offerd?