1Elements of Product

Planning for Services

VK Mehta

Anything that can be offered to a market to satisfy buyer

needs

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3Product 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

4Product 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

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Service Product DecisionsCore 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 BlendGuarantees

New product development

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The Three Types

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How Product Attributes Affect Ease of

Evaluation

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Most Goods

High in search

attributesHigh in experience

attributes

High in credence

attributes

Difficult to

evaluate

Easy to

evaluate

Most Services

Clo

thin

g

Ch

air

Car

Fo

od

s

Resta

ura

nt

meals

Farm

ing

Hair

cu

t

En

tert

ain

men

t

Co

mp

ute

r

rep

air

Leg

al

serv

ices

Co

mp

lex s

urg

ery

Three Types of Product Attributes

features that customers can readily evaluate prior to purchase

Search attributes

features that customers can evaluate only during use

Experience attributes

features that customers may not be able to evaluate even after use

Credence attributes

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Facilitating Services

Supplementary services that customers take for

granted

Presence of these may not create customer

satisfaction

Absence or poor performance of these will

add to dissatisfaction

Loose competitive differentiation over time

Enhancing Services

Optional service extras, Not taken for granted by

customer

Presence will create satisfaction

Absence wont necessarily create

dissatisfaction

Help in Competitive Differentiation

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Supplementary Services

Eight Groups of

Supplementary Services

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12

Core

Information

Consultation

Order-Taking

HospitalityPayment

Billing

Exceptions

Safekeeping

Facilitating

Enhancing

KEY:

Facilitating Services - Information

Customers require

information about:

Features, benefits,

range, etc.

how to obtain and

use a product.

reminders

documentation

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Core

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 - 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

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Core

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

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Core

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

Customers may pay

faster and more

cheerfully if you

make

transactions

simple and

convenient for

them

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Core

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

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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Core

Elements of Consultation

Advice

Personal counseling

Training in product usage

Management or technical consultancy

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Enhancing Services - Hospitality

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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Core

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

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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Core

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

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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Core

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

Statement of Integrity

Assurance The Product will perform as per promise

Supporting evidence test reports, certification, accreditation, achievements or endorsements

Terms & conditions for promised performance

Suggested action by

customer, if unsatisfied with

performance

Custmer support contacts Toll-free call, Email complaint registration

Response action by firm

Repair Replace Compensate Time commitment

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1

2

3

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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