Elements of Product

Planning for Services

VK Mehta
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Anything that can be offered to a market to satisfy buyer

needs

Product Strategy Decision Areas

Product Descriptive
Characteristics
Features, advantages and
benefits

Goods/service blend
quality level
MRO services
Product mix
Branding -

Branded or unbranded
Own or retailer brand
Family or product Brands
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Product Strategy Decision Areas

Packaging
Protection and logistic
convenience function
Enhancing function
Promotion function
Warranty
Why or why not
warranty
Terms and condition
New product development
Strategy

The Product Strategic Decisions

Service Product Decisions

Core product features
Bundle of supplementary service elements
Benefits delivered to customers
Blend of Tangible & Intangible contents
Product range - mix, depth and lines
Service Branding
Packaging for tangible part of the Blend
Guarantees
New product development

The Three Types

How Product Attributes Affect Ease of

Evaluation
Most Goods

Most Services

High in search High in experience

attributes
attributes

Complex surgery

Legal
services

Computer
repair

Entertainment

Haircut

Farming

Restaurant
meals

Foods

Car

Difficult to
evaluate
Chair

Clothing

Easy to
evaluate

High in credence
attributes
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Three Types of Product Attributes

Search
attributes
Experience
attributes
Credence
attributes

features that customers can

readily evaluate prior to purchase

features that customers can

evaluate only during use

features that customers may not

be able to evaluate even after use

Supplementary Services
Facilitating
Services

Enhancing
Services

Supplementary services
that customers take for
granted

Optional service extras,

Not taken for granted by
customer

Presence of these may

not create customer
satisfaction

Presence will create

satisfaction

Absence or poor
performance of these will
add to dissatisfaction

Absence wont
necessarily create
dissatisfaction

Loose competitive
differentiation over time

Help in Competitive
Differentiation
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Eight Groups of
Supplementary Services
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Information
Order-Taking

Billing

Exceptions

Core

Hospitality

Payment
KEY:

Safekeeping

Consultation

Facilitating

Enhancing
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Facilitating Services - Information

Core

Customers require
information about:
Features, benefits,
range, etc.
how to obtain and
use a product.
reminders
documentation
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Elements of Information
Directions to service site
Schedule and Service hours
Prominent features of the core product
Instructions for using core product and
supplementary services
Prices
Documentation
Reminders
Notifications of changes

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Facilitating Services - OrderTaking

Core

Many goods and services

must be ordered or
reserved in advance.
Customers need to
know what is available
and may want to secure
commitment to delivery

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Elements of Order Taking

A. Order Entry:
Mail & telephone
orders for
subsequent
fulfillments.
E.g.. Asian Sky Shop,

Online shopping

B. Reservations and
check in:
Seats
Tables
Rooms
Professional
appointments

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Facilitating Services - Billing

How much do I owe
you?
Customers deserve
clear, accurate and
intelligible bills and
statements

Core

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Elements of Billing

Periodic Statements of account activity.

Verbal statements of amount due.
Machine display of amount due.

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Facilitating Services - Payment

Core

Customers may pay

faster and more
cheerfully if you
make
transactions
simple and
convenient for
them

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Elements of Payments
On-line payments through Credit cards
ECS, standing instructions for debits
PDCs
Collection drop boxes and kiosks
Self-addressed reply envelopes
Collection personnel visits

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Enhancing Services Consultation

Core

Value can be added to

goods and services
by offering advice
and consultation that
are tailored to each
customers needs
and situation

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Elements of Consultation

Advice
Personal counseling
Training in product usage
Management or technical consultancy

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Enhancing Services - Hospitality

Core

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 there!)
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Elements of Hospitality

Greeting
Food & beverages
Toilets & Washrooms
Waiting facilities & amenities waiting areas, proper & cozy
sitting,magazines,newspapers,
entertainment etc.
Security

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Enhancing Services Safekeeping

Core

Customers prefer not to

worry about looking after
the personal
possessions that they
bring with them to a
service site; they also
expect firms to help care
for the goods that they
purchase or rent.
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Examples of Safe Keeping

A. Caring for possessions
customers bring with
them:
Child Care
Pet Care
Parking Facilities
Storage Space
Safety and security deposit

B. Caring for goods

purchased or rented by
customers:
Packaging
Transportation
Delivery
Installation
Repair & renovation

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Enhancing Services - Exceptions

Core

Customers appreciate
some flexibility in a
business when they
make special requests.
They expect it when not
everything goes
according to plan

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Elements of Exceptions
A) Special request in advance of service
delivery:
Children's needs
Dietary needs
Medical or disability need
B) Handling special communications like
Complaints, Compliments, Suggestions

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Elements of Exceptions
C) Problem solving:
Warranties & guarantees against
product malfunctioning
Resolving difficulties that arise from
using the product.

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Warranty Statement Design

1

Statement of
Integrity

Suggested
2
action by
customer, if
unsatisfied with
performance

Response
action by firm

Assurance The Product will perform as per

promise
Supporting evidence test reports, certification,
accreditation, achievements or endorsements
Terms & conditions for promised performance

Custmer support contacts Toll-free call, Email

complaint registration

Repair
Replace
Compensate
Time commitment
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The Seven Levels

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Why at all do we need to define

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A sample NPD Strategy

Sales turnover of any year shall contain at
least 30% contribution from new products
launched during previous five years.
A new variant of the Product shall be
introduced within 25% of its Maturity phase
estimated time.
Our NPD investment target is @ 5% of our
sales turnover of previous year.

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A Hierarchy of New Service Categories

1. Major service innovations- new core products for previously undefined

markets

2. Major process innovations- using new processes to deliver existing

products and offer extra benefits

3. Product line extensions- additions to current product lines

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A Hierarchy of New Service Categories

4. Process line extensions- alternative delivery procedures

5. Supplementary service innovations- adding new or improved facilitating or

enhancing elements

6. Service Improvements
in core or supplementary components

7. Style changes- visible changes in service design or scripts

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