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Flowers of service

Understanding the
Components of the
Augmented Service Product

Core Products and


Supplementary Services
Most firms offer customers a package of
benefits:

core product (a good or a service)


supplementary services that add
value to the core
In mature industries, core products
often become commodities

What Should Be the Core and


Supplementary Elements of Our
Service Product?
How is our core product defined and
what supplementary elements currently
augment this core?
What product benefits create the most
value for customers?
Is our service package differentiated
from the competition in ways that are
meaningful to target customers?

What are current levels of service on the core


product and each of the supplementary
elements?
Can we charge more for higher service levels on
key attributes (e.g., faster response, better
physical amenities, easier access, more staff,
superior caliber personnel)?
Alternatively, should we cut service levels and
charge less?
Supplementary services help to differentiate core
products and create competitive advantage by:
facilitating use of the core service
enhancing the value and appeal of the core

Flower of service
core product surrounded by cluster of
supplementary services

Supplementary services
Facilitating services :

Information
Order taking
Billing
Payment

Enhancing services:

Consultation
Hospitality
Safekeeping
Exceptions

Core and Supplementary Services in a


Luxury Hotel
Reservation
Cashier

Valet
Parking

Business
Center

Room
Service

Reception
A Bed for the
Night in an
Elegant Private
Room with a
Bathroom

Wake-up
Call
Telephone

Baggage
Service

Cocktail
Bar
Entertainment/
Sports / Exercise

Restaurant

The Flower of Service:


Categorizing Supplementary Services

Information
Order-Taking

Payment
Billing

Core

Exceptions
KEY:

Facilitating elements
Enhancing elements

Consultation

Hospitality
Safekeeping

Facilitating Services - Information


Customers often require
information about how to obtain
and use a product or service.

They may also need reminders and


documentation.
Core

Examples of information elements

Directions to service site


Schedules / service hours
Prices
Instructions on using the service
Reminders
Warnings
Condition of sale/service
Notification of changes

Facilitating Services - Order-Taking


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

Core

Examples of order taking elements

Applications

Membership in clubs

Subscription services (e.g utilities)

Prerequisite based services (e.g college


enrollment)

Order entry

On site order fulfillment

Mail/ telephone order placement

Reservations and check in

Seats
Tables
Rooms
Vehicles or equipment rental
Admission to restricted facilities (museums)

Facilitating Services - Billing

Core

How much do I owe you?


Customers deserve clear, accurate and
intelligible bills and statements.

Billing :

Periodic statements of account activity


Invoices for individual transactions (stock
market)
Machine display of amount due

Facilitating Services - Payment


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

Core

Examples of payment

Cash
Cheque
Credit card
Electronic fund transfer
Enter credit card number online
Coupon redemption
Automated systems : (E.g. Machinereadable tickets that operate entry
gates)

Enhancing Services - Consultation


Value can be added to goods and services
by offering advice and consultation
tailored to each customers needs and
situation
Core

Consultation

Advice
Auditing
Personal counseling
Tutoring /training in product use.
Management / technical consulting

Enhancing Services - Hospitality


Customers who invest time and effort in
visiting a business and using its services
deserve to be treated as welcome guests
Core

Hospitality : examples of hospitality


elements
Greetings
Food and beverages
Toilets and washrooms
Waiting facilities and amenities
Lounges, waiting areas and seating
Weather protection
Magazines, entertainment, newspaper
Transport
Security

Enhancing Services - Safekeeping


Customers prefer not to worry about looking
after the personal possessions that they
bring with them to a service site.
They may also want delivery and after-sales
services for goods that they purchase or
rent

Core

Safekeeping
Caring for possessions customers bring
with them

Child care
Pet care
Parking facility for vehicles
Valet parking
Luggage handling
Safe deposit boxes
Security personnel

Enhancing Services - Exceptions


Customers appreciate some flexibility in a
business when they make special requests.
Core

They expect it when not everything Goes


according to plan

Exception elements:

1) special requests in advance of service delivery:

Childrens needs

Dietary requirements

Medical or disability needs

Religious observances

Deviations from Standard operating procedures

Handling Special Communications

Complaints
Compliments
Suggestions

3 - Problem solving
Warranties and guarantees against product
malfunction
Resolving difficulties caused by accidents , service
failures and problems with staff or other customers
Assisting customers who have suffered an accident or
medical emergency.

4 - Restitution
Refunds
Compensation in kind for unsatisfactory goods and
services
Free repair of defective goods.