2. • Over simplification
Service is an intangible product.
It cannot be
photographed, touched, verified
• Incompleteness
and tried out. A service product
is bundle of features and
customer benefit. There are four
• Subjectivity
risks of attempting to describe
service in words alone. • Biased
interpretation

3. A service product is a package
of a series of service elements
in proper order in keeping
with the needs and wants of
consumer, with an intention
to maximize consumer
satisfaction.
• Core services
There are three elements in
BSP. They are • Facilitating services
• Supporting services

4. The basic service package
Core service
Facilitating
service
Supporting
service

5. Core service is the reason for being in the market. Like hospital is for
health care and hotel is for lodging.
Facilitating services are those services without which core services
cannot be performed. Thus a hotel requires building consisting of
rooms, toilet and hospital requires doctors, nurses, medical equipments
etc.
Supporting services do not facilitate the consumption or use of a core
services but increase the value of service offering.

6. For better understanding let us
describe the BSP of a tourism
product
Suppose that core service of a tourism product offers destination
experience
The facilitating services include:
(i) Natural places: waterfall, rivers, islands
(ii) Historical places: monuments, museums, temples
(iii) designed environments: man made such as Essel world, Disney parks
and water parks etc.

7. Supportive service include
Transportation
Hospitality
Health care
Education
Communication
Interactions
Need based special packages

8. Customer value hierarchy
Core benefit
Basic product
Expected product
Augmented product
Potential product

9. Core benefit Rest and sleep (it is the most fundamental benefit the
customer purchases)
Basic product Hotel room, bed room, bath room, towels, desk, closet, and so
on (it is how a marketer translates the core benefit into a service
package.
Expected Clean bed, fresh towels, working lamps and the relative degree of
product quiet (a set of attributes buyers normally expect while
purchasing a service)
Augmented Supply of food that suits customer health, anything that
product surprises and delights the customer
Potential New ways of satisfying customer
product

10. information
Payment consultation
billing
Core Order taking
product
exceptions hospitality
Care taking

11. Information: customers need information on various elements of a service, for evaluation and purchase decision
making. Service firms also need to educate the market and prepare and persuade the potential buyer. For e.g.
Sign boards
Service performance hours
Charges for services
Directions on using core and supplementary service
Alerting people
Notices

12. Conditions of sale service
Indicating the changes
Documentation
Reservation information
Activity summaries
Bills and receipts

13. Consultation: consultation involves a dialogue with the customers to probe their requirements so as to
design and develop a tailored solution. Consultation is generally provided in the following areas
Providing advice
Helping customers to use the service
Clarifying doubts
Counselling personally
Offering management/ technical consultancy

14. Order taking: order taking is first step in transaction. Some organisations such as banks and
insurance companies require prospective customer to fill in the application form. Some
organisations make order entry and some others make advance reservations. For e.g.
Filling application form for membership
For reservation of seats tables etc
Entry of orders online mail or telephone order

15. Hospitality: customers may be required to stay at the service outlet for a long time due to the nature of
service process. Hence hospitality becomes a part of service offerings.
Greeting
Enquiry and reception
Waiting facilities
Bathroom kits
Food and beverages
transportation

16. Safe keeping: it is likely that service customers may carry personal possession to the service outlet
and participate in service production. Service organisations have to make arrangements for the
safe keeping of the customer property. It includes
Baby care and pet care services
Parking facilities
Storage and baggage handling services
Security and safe deposit service

17. Goods packaging
Pick up
Transportation
Delivery
Installation of goods
Cleaning and ensuring a healthy ambience

18. Exceptions: service providers may be required to provide
supplementary services that fall outside the routine to the
customers, on special considerations. In case of accidents and
emergency exceptions should be allowed.
Billing: billing is important from the company’s as well as the
customer’s point of view. Customers expect accuracy, completeness
and legibility in the bills prepared by the service providers.
Companies also provide periodic statements of account to customers
or allow customers to complete bills by themselves for greater
transparency in the process.

19. Payment: After billing is done customer
have to take action on payment. Activities
such as cash handling, cheque
handling, credit system, and coupon
system are part of payment system. The
payment system should facilitate
customers to get easy and convenient
payment of their dues.

20. Development of new service
According to Philip kotler, every company must develop
new products. New product development shapes the future
of company. Improved and replacement products must be
created to maintain or build sales.
A service can be termed as new service when it is totally
innovative and is created and offered by the company to the
world for the first time. Some new services are adaptive
replacements. They are improved version of existing service
products either in technology, style, status or performance.

21. According to • New to the world products
Booz, Allen • New product lines
and • Addition to existing product lines
Hamiltan, ther • Improvements and revision of
e can be six existing products
categories of • Repositioning
new products. • Cost reductions

22. Marketing
Concept strategy
Idea Screening Business Service Market commerciali
development And
generations ideas analysis development testing zation
and testing
development

23. Idea Generation:
The first step in new service development
process is generation of new ideas. An idea is
the fundamental base for any product. The
most scarce product in today’s competitive
world undoubtedly is a good idea. In most of
the organization each and every employee is
free to give his or her ideas whether they are
feasible or not, because no one knows about
which unrealistic idea become reality some day.

24. Screening ideas:
The large no. of ideas gathered are
screened to make the number
manageable for further
consideration. Criteria need to be
evolved to evaluate each idea on its
suitability to the organisation.
Services firms generally constitute an
expert committee to decide the
criteria for the evaluation of ideas
and to conduct screening process.
• Go error: when bad idea is
In screening two types of errors can forwarded
occur
• Drop error: when good idea is
dropped.

25. Concept development and testing
The ideas selected for further processes need to
be developed into concepts. Ideas are general
and vague in nature, whereas concepts are
specific and concrete. Concept development
means translation of an idea into a descriptive
form in accurate terms. A clearly defined service
concept includes the elements of a
BSP, customer employee interaction and the
service design document.

26. The • The problem to which the solution
is offered in the form of service
service • Reasons for offering a new service
• List of sequential service processes
design and its benefits.
document • A rationale for the consumer as to
why he or she should have the
describes: service.

27. Service blueprint
A popularly used technique for the development of
service concept is service blue printing. A service blue
print is a picture or map that portrays the service
accurately. It is intended to provide a clear picture of
the service process to different people involved in the
service production and consumption processes. It
helps the people involved to understand various
processes of service without any confusion. The blue
print visually depicts the roles of customers and
employees.

28. Zeithmal and
Bitner have •
•
Identify the process
Map the process
developed •
•
Draw the line of interaction
Draw the line of visibility
eight steps • Map the process from the customer and contact
person’s point of view, distinguishing on-stage from
for building a back-stage actions.
• Draw the lines of internal interaction
service • Link customer and contact person activities needed to
support functions.
blueprint. • Add evidence of service at each customer action step.
They are

29. Concept testing
The new service concept developed could be tested by
presenting the concept through appropriate target
consumers and by eliciting their views and opinions.
Besides customers, the concept has to be tested with the
employees of the organisation, so as to assess their
understanding, ability, and willingness in performing the
service. The result of concept testing will help the
management to find out the need gap level, purchase
intention level, the broad and strong consumer appeals,
the shortcomings in the concept, the preferential order of
influence of various processes and so on.

30. Marketing strategy development
After the • Who are the target customers
successful testing • What is the size of market
of the concept, a • What is the competitive structure and
their behavior
preliminary
• What is the positioning strategy
marketing
• What is pricing strategy
strategy has to be • What is distribution strategy
developed. The • What are the long term sales
strategic plan will • What is the expected market share
find out answers • What are the profit goals-long term as
to the following well as short-term
questions:

31. Business analysis
The management of service firm would like to know
the business attractive of the service proposal.
Business analysis includes estimation of first time
sales and repeat sales, sales in the
introductory, second, third, fourth and fifth year
product life cycle analysis, cost estimation, estimation
of profits, projected profits and loss account for the
first five years, pay back period and risk analysis.
Business analysis helps managers to rank screened
ideas.

32. Service development
The service development will be designed
with infrastructure, facilities, contact
employees, system and tangibles as per the
service blueprint. The step is an action-
oriented one, involving high expenditure. It
is clear shift from desk work to practical
execution.

33. Market testing
Now the services are ready for sale. To
know how the service offer could really
provide satisfactory experiences, it is
necessary to test it among different groups
of customers. Based on the early
feedback, appropriate changes can be
made to make offer more attractive or
qualitative.

34. Commercialization
The new service
developed will be
offered for sale. At this • When should the service be
stage, service firms have
to incur huge costs offered
particularly in external • Where should the service be
marketing. The major
task is to create
offered
awareness in the market • To whom should the service be
and persuade the target offered
market to have the
service. At this stage • How should the service be offered
following four decisions
are utmost important.

35. Service line decisions
A service line consists of number of related services. Companies
divide the service product mix into service lines for administrative
convenience. Each line can be assessed from the point of view of
competition and profitability, and appropriate strategic approaches
can be followed to achieve organizational objectives.
Service line length: keeping profit maximisation as one of the key
objectives, service firms decide the length of each service line. For
building a service line companies may adopt the following four
different strategies

36. Down market stretch
Up market stretch
Two way stretch
Service line filling

37. Service line modernization: service packages, once
introduced, cannot be continued as they are for a long time. On the
one side, competitors try to overtake in value offering, and on the
other side, consumers expect of improved value perceptions. So
there is need of modernisation as per the need of competitive world.
Service line featuring: Not all services of a service line can be
campaigned to target consumers due to economic reasons.
Companies may select one or two service packages of service
line, which are capable of creating demand for themselves as well as
the other service packages on the line.

38. Service line pruning: while new service
additions are to increase the profitability of
the concerns, dropping some services may
be sometimes necessary to protect the
profitability. When a service reaches the
decline stage in its life cycle and becomes a
loss-making one, management has to take a
decision to drop such a service from the line.

39. Service differentiation
Basic service package: one of the key areas of service
differentiation is the design of the BSP itself. There is an
enormous scope for differentiating the facilitating services as
well as supporting services. By introducing little changes in
BSP, consumers can be made to perceive differentiated value.
Accessibility: by making a service more accessible compared
to that of other competitive services, a differentiated value
perception can be granted.

40. Interaction:
yet another area of differentiation service is the
design and process of customer interaction. How
customers are received, how they were involved in
service production and consumption, how they
were detached from service outlet after
production and consumption process, whom they
interact with and how the interaction is organised
are the areas providing infinite opportunities to
service firms to differentiate and excel.

41. Customer participation:
customer differ in their knowledge, ability
and willingness to participate in service
production. The responsibility of the
service firm lies in ensuring the total, able
and involved participation of customer.
Service firms can differentiate in their
approach to educate, train and convince
the customer.

42. Tangibles used: the quantity, adequacy, maintenance,
technology and suitability of various tangibles required for
the service performance can be used to create differentiated
value perceptions.
Service personnel: human resources plays a pivotal role in
service production. Though some services can be provided
through machines, they cannot be viewed as perfect
substitutes to the human resource.

43. Service channel: the choice of channels such as
agents, brokers, franchises or electronic channels; the
extensive, exclusive and selective coverage of the channel; the
skill and expertise of channel members and their performance
are the areas where differentiation is a possibility.
Service image: the image of company at local level and
corporate level differentiates in value perception by the
customer.

44. Service recovery: In spite of careful and
cautious approach, deficiencies in service
is not an exception to any service
organisation. Successful companies adopt
recovery strategies to win the customers
and also use such strategies to differentiate
their service offerings from that of
competitors.

45. Service life cycle
Introduction stage
Growth stage
Maturity stage
Decline stage

46. Branding a service product
Branding begins with giving an
identity to the service beyond
the one it has within trade
circles. Consumers feel they are
getting more in a branded
service than otherwise.

47. BENEFITS OF BRANDING
Provides corporate identity and recognition.
Provides an opportunity to distinguish the competitive product
Helps customers to develop perceptions.
Helps in developing customer relationship
Builds up long term equity to the concern
Market penetration becomes easy.
New service offers get quick response.

48. Branding decisions
Service firms need to decide whether to brand
their services packages or not, because
branding requires consistent quality
performance and accessibility. The cost of
branding must be less than the premium that a
marketer can get out of it. Once it is decided to
brand a service, there are at least four
important decisions a company has to make in
branding. They are

49. Should the company’s own brand be promoted or
should a sponsor be found for branding.
What should be the quality of brand.
Should a corporate brand or an independent product
brand or a mix of two be promoted
Should the existing brand name be extended or a new
brand built

50. Selection of brand name
While selecting a brand company’s vision, mission and
objective should be kept in mind. Generally a committee which
consists of product managers, other marketing
personnel, advertising agencies, branding consultants is
constituted for selection of brand name. keeping the company’s
objective in mind, the committee carefully reviews the BSP, its
benefits, the target market and the proposed marketing
strategies. A list of potential brand names ranging from 100 to
200 is prepared at the first stage . After this 10 or 20 names are
selected after screening. Then company studies the customer’s
reaction on different brand names and finally a brand name is
selected.

51. Qualities of a good brand
The name should be associated with pleasant things and quality.
The name should suggest something about the product’s benefit.
It should be easy to pronounce and recall
It should lay stress on those characteristics of a service that are to be impressed on customer
It should be distinctive and should have motivational value
The name should be capable of translation into foreign language
The name should be free for legal protection and registration.