MANAJEMEN

FAKULTAS EKONOMI DAN BISNIS

CHAPTER 4

Developing Service Products and Brands

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What is Service Product?

A “bundle of output” as
well as the ability to
differentiate one bundle of
output from another

Source: Wirtz & Lovelock, 2016

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Chapter Overview

Source: Wirtz & Lovelock, 2016

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Elements of Service Product?

• “what” the customer is fundamentally buying

Core Product • The central component supplying the principal benefits
and solutions that customers seek

Supplementary Activities which can play an important role in

differentiating and positioning the core product against
Services competing services

The processes used to deliver both the core

Delivery Processes product and each of the supplementary services

Source: Wirtz & Lovelock, 2016

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Elements of Delivery Processes?

How the different service components are
delivered to the customer?
The nature of the customers’ role in those
processes

How long delivery lasts?

The prescribed level and style of service to be

offered
Source: Wirtz & Lovelock, 2016
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Sample: Element of Hotel Product

Reservation
Parking
Wi-Fi

Nature of
Scheduling
Process
Check-in/
Room Service Core Check-out
Customer
Service Level
Role

Porter
Pay TV
Meal
Source: Wirtz & Lovelock, 2016
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The Flower of Service

Information

Payment Order-Taking
The combination
of of the core
service and a Billing Core Consultation
range of
supplementary
Exceptions Hospitality

Safekeeping
Facilitating supplementary elements
Enhancing supplementary elements
Source: Wirtz & Lovelock, 2016
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Billing

Periodic statements of account

activity
Invoices for individual transactions
Verbal statements of amount due
Online or machine display of
amount due for self-payment
transactions

Source: Wirtz & Lovelock, 2016

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Payment

Self service
Direct to payee or intermediary
Automatic deduction from
financial deposits

Source: Wirtz & Lovelock, 2016

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Information
Direction to service site
Schedules/service hours
Price information
Terms and conditions of sale/service
Advice on how to get the most value from a
service
Warnings and advice on how to avoid
problems
Confirmation of reservations
Receipts and tickets
Notification of changes
Summaries of account activities Source: Wirtz & Lovelock, 2016
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Order Taking
 Order entry
– On-site order entry
– Mail/telephone/email/online/mobile app order
 Reservations or check-ins
– Seats/tables/rooms
– Vehicles or equipment rental
– Professional appointment (Figure 4.7)
 Applications
– Memberships in club/programs
– Subscription services (e.g., utilities)
– Enrolment-based services (e.g., financial credit,
college enrolment)

Source: Wirtz & Lovelock, 2016

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Consultation

Customized advice
Personal counselling
Tutoring/training in service
use
Management or technical
consulting
Source: Wirtz & Lovelock, 2016
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Hospitality

Customized advice
Personal counselling
Tutoring/training in service
use
Management or technical
consulting
Source: Wirtz & Lovelock, 2016
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Safekeeping

Child care
Pet care
Parking for vehicles
Valet parking
Coatrooms
Baggage handling
Storage space
Safe deposit boxes
Security personnel

Source: Wirtz & Lovelock, 2016

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Exceptions

Special requests
Problem solving
Handling of complaints
Restitution

Source: Wirtz & Lovelock, 2016

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Highlights The Flower of Services

 The Flower of Service and its petals can serve as a checklist in the continuing search for
new ways to augment existing core products
 To design new offerings.
 Regardless of which supplementary services a firm decides to offer, all of the elements
in each petal should receive the care and attention needed to consistently meet defined
service standards.
 The resulting “flower” will always have a fresh and appealing appearance
 Not every core product is surrounded by supplementary elements from all eight clusters
 Nature of product helps to determine:
• Which supplementary services must be offered
• Which might usefully be added to enhance value and ease of doing business with the
organization
 People-processing and high contact services tend to have more supplementary services
 Firms that offer different levels of service often add extra supplementary services for
each upgrade in service level
Source: Wirtz & Lovelock, 2016
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What is Service Brand?

The approaches combination
to create a
useful service add-on that
communicates the benefits
of the brand

Source: Wirtz & Lovelock, 2016

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Product Lines and Brands

 Most service organizations offer a line of
products rather than just a single product.
 They may choose among 3 broad alternatives:
• Single brand to cover all products and
services
• A separate, stand-alone brand for each
offering
• Some combination of these two extremes
Source: Wirtz & Lovelock, 2016
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Spectrum of branding Alternatives

Corporate Individual
Branding Product
Branding
Branded House
Used to describe a company, that House of Brands
applies its brand name to multiple
offerings in often unrelated fields.
Any single brand to
Ex: TransCorp describe their own service

Sub-brands Endorsed brands

The corporate or the master brand The product brand dominates but
is the main reference point, but the the corporate name is still featured.
product itself has a distinctive name Ex: Accor group, they are featuring
too . Ex: FedEx Express Novotel, ibis. Etc.

Source: Wirtz & Lovelock, 2016

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Service Tiering
What is
Service
Tiering?
Sample
Differentiate
core services and
clearly
differentiate
service levels

Source: Wirtz & Lovelock, 2016

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Service Branding Model

Strong Relationship
Weak Relationship
Source: Wirtz & Lovelock, 2016
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How to Offer Brand Experience

Branding can be used at both company and product levels
Corporate brand:
• Easily recognized
• Holds meaning to customers
• Stands for a particular way of doing business
Product brand:
• Helps firm establish mental picture of service in consumers’ minds
• Helps clarify value proposition

Source: Wirtz & Lovelock, 2016

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How to Create Service Innovation

 Style changes  Visible changes in service design or scripts
 Service improvements  Modest changes in the performance of
current products
 Supplementary service innovations  Addition of new or
improved facilitating or enhancing elements
 Process-line extensions  Alternative delivery procedures
 Product-line extensions  Additions to current product lines
 Major process innovations  Using new processes to deliver
existing products with added benefits
 Major service innovations  New core products for previously
undefined markets

Source: Wirtz & Lovelock, 2016

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Success Factors in New Service Development

 Market synergy
• Good fit between new product and firm’s image/resources
• Advantage vs. competition in meeting customers’ needs
• Strong support from firm during/after launch
• Firm understands customer purchase decision behavior
 Organizational factors
• Strong inter functional 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

Source: Wirtz & Lovelock, 2016

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FAKULTAS EKONOMI DAN BISNIS
 MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS