Professional Documents
Culture Documents
Service Product
What do we mean by a service product? A service product consists of two components,
the core product and supplementary services. The core product is based on the core set of
benefits and solutions delivered to customers. These are usually defined with reference to a
particular industry like healthcare or transportation. For example, in healthcare, the core
product may be the restoration of the body back to an optimum condition. Surrounding the
core product is a variety of service-related activities called supplementary services.
Supplementary services augment the core product by facilitating its use and enhancing its
value and appeal. The supplementary services often play an important role in differentiating
and positioning the core product against competing services.
1.
2.
3.
4.
A. Facilitating Services
Information
Order-taking
Billing
Payment
B. Enhancing Services
1. Consultation
2. Hospitality
3. Safekeeping
4. Exceptions
In the following Figure, the eight clusters are displayed as petals surrounding the center
of a flower, hence we call it the Flower of Service. The petals are arranged in a clockwise
sequence depending on how they are likely to be encountered by customers. However, the
sequence may sometimes vary. For instance, payment may have to be made before service is
delivered rather than afterwards. In a well-designed and well-managed service organization,
the petals and core are fresh and well-formed. A service that is badly designed or poorly
delivered is a like a flower with missing or dried petals. Even if the core is perfect, the flower
looks unattractive. Think about one of your negative experiences as a service customer. When
you were dissatisfied with a particular purchase, was it the core that was at fault, or was it a
problem with one or more of the petals?
inform
ation
payme
nt
billing
excepti
ons
Core
prod
uct
consult
ation
Order
taking
hospita
lity
safeke
eping
Facilitating elements
Enhancing elements
Busy customers dislike being kept waiting for a bill to be prepared. There are different ways
in which bills can be presented to customers in a faster way. Hotels and rental car firms now
have express check-outs. Many hotels may push bills under guestroom doors on the morning
of departure showing charges to date. Others offer customers the choice of seeing their bills
beforehand on the TV monitors in their rooms. Some car rental companies have an express
check-out procedure. An agent meets customers as they return their cars. After they have
checked the mileage and fuel gauge readings, the bill is printed on the spot using a portable
wireless terminal.
4. Payment
In most cases, a bill requires the customer to take action on payment. One exception is the
bank statement which shows details of charges that have already been deducted from the
customers account. Increasingly, customers expect it to be easy and convenient to make
payment, including using credit, when they make purchases in their own countries, and while
traveling abroad. A variety of options exist for customers to make payment. For self-service
payment systems, one may make payment by inserting coins, banknotes, tokens or cards into
machines. Good maintenance of the equipment is important.
If the equipment breaks down, it can destroy the purpose of such a system. Most payment still
takes the form of cash or credit cards. However, more and more shopping is being done
online. PayPal offers a fuss-free and secure way to make payments for goods bought over the
Internet. Online shoppers must first register with PayPal and have a credit card to use the
service. Customers can make their payments via PayPal who will process the payment to the
seller. PayPal will then charge the amount owed to the registered buyers account.
At its simplest level, consultation consists of immediate advice from a knowledgeable service
person in response to the request, What do you suggest? (For example, you might ask the
person who cuts your hair for advice on different hairstyles and products). Finally,
management and technical consulting for corporate customers include the solution selling
associated with expensive industrial equipment and services. Effective consultation requires
an understanding of each customers current situation, before suggesting a suitable course of
action. Good customer records can be a great help in this respect, particularly if relevant data
can be retrieved easily from a remote terminal. In an Internet environment, which encourages
customers to engage in self-service applications and be more self-reliant, companies should
not forget the personal touch of a live human being during the process of consultation. The
human touch of a friendly customer-service officer will certainly be valued and remembered,
and will go a long way for customers.
Counselling is another type of consultation that is less direct than consultation. It involves
helping customers understand their situations better, so that they can come up with their
own solutions and action programs. For example, diet centers such as Weight Watchers use
counselling to help customers change behaviours so that weight loss can be sustained after
the diet program has ended. Finally, advice, another form of consultation, can also be offered
through tutorials, group training programs, and public demonstrations.
2. Hospitality
Hospitality-related services should, ideally, reflect pleasure at meeting new customers and
greeting old ones when they return. Well-managed businesses try, at least in small ways, to
ensure that their employees treat customers as guests. Courtesy and consideration for
customers needs apply to both face-to-face encounters and telephone interactions (Figure
below). Hospitality is an element that can be more clearly displayed in face-to-face
encounters. In some cases, it starts (and ends) with an offer of transport to and from the
service site on courtesy shuttle buses. If customers must wait outdoors before the service can
be delivered, then a thoughtful service provider will offer weather protection. If customers
have to wait indoors, then there can be a waiting area with seating and even entertainment
(TV, newspapers or magazines) to pass the time. Recruiting employees who are naturally
warm, welcoming, and considerate helps to create a hospitable atmosphere. Shoppers at
Giordano, an international clothing retailer with markets in the Asia Pacific and the Middle
East, are given a cheerful Hello and Thank you when they enter and leave the store, even
if they did not buy anything. The quality of the hospitality services offered by a firm can
increase or decrease satisfaction with the core product. This is especially true for peopleprocessing services where customers cannot easily leave the service facility. Private hospitals
often seek to enhance their appeals by providing the level of room service that might be
expected in a good hotel. This includes the provision of quality meals. Some airlines seek to
differentiate themselves from their competitors with better meals and more attentive cabin
crew and Singapore Airlines is well-recognized in both areas.
Failures in hospitality can extend to the physical design of the areas where customers wait
prior to receiving service.
3. Safekeeping
While visiting a service site, customers often want their personal possessions to be looked
after. In fact, some customers may choose not to go to certain places that do not have
safekeeping services
like a safe and
convenient car park.
On-site safekeeping
services includes
coatrooms; baggage
transport, handling and
storage; safekeeping of
valuables; and even
child care and pet care
(Figure here).
4. Exceptions
Exceptions involve supplementary services that fall outside the normal service delivery.
Exceptions include special requests, and problem solving (Figure below).
Companies should anticipate exceptions and develop back-up plans and guidelines in
advance. That way, employees will not appear helpless and surprised when customers ask for
special assistance. Well-defined procedures make it easier for employees to respond promptly
and effectively. Managers need to keep an eye on the level of exception requests. Too many
requests may indicate that standard procedures need to be changed. For example, if a dentist
keeps receiving requests for more information about a particular dental procedure, then this
may indicate that it is time to perhaps print some brochures that educate customers. A flexible
approach to exceptions is generally a good idea, because it reflects responsiveness to
customer needs. On the other hand, too many exceptions may have a negative impact on
other customers, and overburden employees.
Managerial Implications
The eight categories of supplementary services forming the Flower of Service collectively
provide many choices for enhancing core products. As noted earlier, some are facilitating
services that enable customers to use the core product more effectively. Others are extras
that enhance the core or even reduce its non-financial costs. Any badly handled element may
negatively affect customers perceptions of service quality.
Not every core product is surrounded by a large number of supplementary services from all
eight petals. People-processing services tend to have more supplementary elements,
especially hospitality, since they involve close (and often extended) interactions with
customers. When customers do not visit the service factory, the need for hospitality may be
limited to just letters and telecommunications. Possession-processing services sometimes
place heavy burdens on safekeeping elements. However, there may be no need for this
particular petal when providing information-processing services, whereby customers and
suppliers interact at arms length. Financial services that are provided electronically are an
exception to this however. Companies must ensure that their customers intangible financial
assets and their privacy are carefully safeguarded in transactions that take place through the
telephone or the web.
A study of Japanese, American, and European firms serving business-to- business markets
found that most companies simply added layer upon layer of services to their core offerings
without knowing what customers really valued.4 Managers surveyed in the study indicated
that they did not understand which services should be offered to customers as a standard
package accompanying the core, and which could be offered as options for an extra charge.
There are no simple rules governing decisions for core products and supplementary services.
However, managers should continually review their own policies and those of competitors to
make sure they are in line with what the market practices, and customer needs.