Lesson 5

Service Products and Brands

A service product comprises all the elements of the service performance, both physical and intangible,
that create value for customers.

Components of a Service Product

1. The core product - is ‘what’ the customer is fundamentally buying.
2. Supplementary Services - can play an important role in differentiating the core product from
competing services
3. Delivery Processes - Supplementary Services

Flower of Service - consists of the core service and a range of supplementary services.
1. Information - To obtain full value from goods or services, customers need relevant information.
2. Payment - include bank statements and other direct debit-paid services, which show charges
that will be deducted from a customer’s account.
3. Billing - is common to almost all services. Timely billing encourages people to make faster
payment.
4. Exceptions - involve supplementary services that fall outside the routine of normal service
delivery.
5. Safekeeping - want assistance with their personal possessions.

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 6. Hospitality - related services should ideally reflect pleasure at meeting new customers and
greeting old ones when they return.
7. Order Taking - Once customers are ready to buy, a key supplementary element comes into play
— order taking.
8. Consultation - consists of advice from a knowledgeable service person in response to the
request.

Branding Strategies for Services

Most service organizations offer a line of products rather than a single product.
1. Branded House - applies its brand name to multiple offerings in often unrelated fields.
2. Sub-brands - the corporate or the master brand is the main reference point, but each product
has a distinctive name as well.
3. Endorsed Brands - the product brand dominates but the corporate name is still featured.
4. House of Brands - each of these brands is actively promoted under its own name.

New Service Category

1. Style changes - represent the simplest type of innovation, typically involving no changes in
either processes or performance.
2. Service improvements - involve small changes in the performance of current products, including
improvements to either the core product or to existing supplementary services.
3. Supplementary ser vice innovations - take the form of adding new facilitating or enhancing
service elements to an existing core service, or of significantly improving an existing
supplementary service.
4. Process line extensions - represent distinctive new ways of delivering existing products.
5. Product line extensions - additions to a company’s current product lines.
6. Major process innovations - use of new processes to deliver existing core products with
additional benefits.
7. Major service innovations - new core products for markets that have not been previously
defined.

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Lesson 5: Service Products and Brands o Example: A hospital website providing
A service product consists of both tangible and details about available treatments,
intangible elements that together create value for the doctor schedules, and pricing.
customer. Since services are often experienced-based, o Clear information reduces customer
businesses must carefully design and manage their uncertainty and improves trust in a
offerings to ensure customer satisfaction and loyalty. business.

1. Components of a Service Product 2. Payment – A smooth and flexible payment

Every service consists of three key components that shape process makes transactions easier and more
how customers experience it. convenient. Offering multiple payment methods
can increase customer satisfaction.
1. Core Product – The main reason a customer o Example: An online store accepting credit
purchases a service. It directly addresses their cards, PayPal, and digital wallets makes
needs and delivers the primary benefit. shopping more accessible.
o Example: When a customer books a o If a payment system is complicated or
flight, the core service is transportation insecure, customers may abandon their
from one place to another. purchases.
o If the core product fails, even the best 3. Billing – A clear and accurate billing process helps
additional services won’t be enough to customers understand their charges and builds
satisfy customers. trust.
o Example: A telecom company providing a
2. Supplementary Services – These are extra detailed bill that lists all data, call, and
features that enhance the core product and make text charges.
it more attractive. Businesses use them to o Unclear or incorrect bills can lead to
differentiate their services from competitors. customer complaints and dissatisfaction.
o Example: A hotel providing room service,
free Wi-Fi, and a spa improves the guest 4. Exceptions – Businesses must handle special
experience. requests, complaints, or refunds effectively to
o Customers are more likely to return if maintain customer trust.
supplementary services make the service o Example: A hotel offering a full refund if a
more convenient and enjoyable. guest had a bad experience.
o Well-managed exceptions can turn a
3. Delivery Processes – The method of providing the dissatisfied customer into a loyal one.
service affects how efficient and accessible it is. A
smooth process leads to higher customer 5. Safekeeping – Customers value services that help
satisfaction. them store or protect their belongings while using
o Example: A fast-food chain with a self- the core service.
service kiosk allows customers to order o Example: A gym providing secure lockers
quickly and easily. for members’ valuables.
o A complicated or slow delivery process o Lack of safekeeping can make customers
can cause frustration, even if the core feel insecure about using a service.
product is excellent.
6. Hospitality – A welcoming atmosphere makes
✅ How They Connect: The core product is essential, but customers feel valued and appreciated, improving
supplementary services and an efficient delivery process their overall experience.
improve the overall customer experience, making o Example: A restaurant greeting
businesses more competitive. customers with a friendly host and
complimentary drinks.
2. Flower of Service 🌸 o Good hospitality encourages repeat
The Flower of Service consists of eight supplementary business and positive word-of-mouth.
services that support the core product and improve the
customer journey. 7. Order Taking – The process of handling customer
requests should be fast, efficient, and hassle-free.
1. Information – Customers need reliable and clear o Example: An airline website that allows
information to make informed choices about a easy online booking with instant
service. If information is lacking or confusing, it confirmation.
can lead to frustration. o A slow or complicated order process may
lead to customer frustration and lost
sales.

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 8. Consultation – Expert advice helps customers 4. New Service Categories
make better decisions and adds extra value to the Innovation is key to staying competitive in the service
service. industry. Companies introduce new services to attract
o Example: A financial advisor helping a more customers, improve efficiency, and differentiate
client choose the right investment plan. themselves from competitors. These innovations can range
o Consultation services improve credibility from small improvements to entirely new service
and customer loyalty. concepts.

✅ How It Connects: The Flower of Service ensures a 1. Style Changes – These involve minor updates to
complete and seamless experience, leading to higher the service’s appearance or presentation without
customer satisfaction and retention. changing its core function. They help keep the
service fresh, modern, and appealing to
3. Branding Strategies for Services customers.
A strong brand strategy makes a service more o Example: A restaurant redesigning its
recognizable, trustworthy, and competitive. Businesses menu layout and updating staff uniforms
use different approaches to establish a unique identity. to create a more stylish and modern
atmosphere.
1. Branded House – A single brand name is used for o While these changes don’t affect service
multiple services, creating strong recognition performance, they can influence
across different industries. customer perceptions and improve brand
o Example: Virgin Group owns Virgin image.
Airlines, Virgin Mobile, and Virgin Hotels
under the same brand name. 2. Service Improvements – These involve enhancing
o This approach builds a consistent image the performance, convenience, or quality of an
and leverages brand reputation. existing service. Even small improvements can lead
to higher customer satisfaction.
2. Sub-brands – The corporate brand remains o Example: A hotel increasing its Wi-Fi
important, but each service has its own distinct speed and offering free high-speed
identity. internet to all guests.
o Example: Marriott Hotels owns The Ritz- o These changes help businesses stay
Carlton (luxury) and Courtyard (budget- relevant and retain customers by making
friendly) under one corporate brand. the service more efficient and enjoyable.
o This strategy allows for flexibility while
maintaining brand trust. 3. Supplementary Service Innovations – Businesses
add new supporting features that enhance the
3. Endorsed Brands – The main brand supports its customer experience. These features do not
individual products, ensuring credibility while change the core service but add extra value.
allowing separate marketing. o Example: A bank introducing mobile
o Example: Nestlé endorses KitKat, check deposits so customers can deposit
Nescafé, and Maggi, ensuring trust in checks using a smartphone app instead of
these sub-brands. visiting a branch.
o Customers associate the product with o This type of innovation makes services
quality because of the endorsement. more convenient and often improves
customer loyalty.
4. House of Brands – Each brand operates
independently, allowing customized marketing 4. Process Line Extensions – This refers to offering
and separate target markets. new ways to deliver existing services, often
o Example: Procter & Gamble owns Tide, making them faster, easier, or more accessible.
Pampers, and Gillette, each marketed as o Example: Fast-food chains introducing
separate brands. self-service kiosks, allowing customers to
o This strategy prevents one brand’s issues place orders without waiting in line.
from affecting others in the company’s o These innovations can help businesses
portfolio. reduce costs, improve efficiency, and
enhance customer experience.
✅ How It Connects: Branding helps service businesses
establish a strong market presence, build trust, and attract 5. Product Line Extensions – Companies expand their
customers. existing service offerings to appeal to different
customer segments. This helps them serve a
broader market.

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 o Example: Netflix introducing an ad-
supported subscription plan for budget-
conscious customers.
o This allows businesses to attract new
customers while maintaining their
existing customer base.

6. Major Process Innovations – These involve using

entirely new processes to deliver an existing
service in a more effective or innovative way.
o Example: Telemedicine services allowing
patients to consult doctors online instead
of visiting a clinic.
o This type of innovation improves
accessibility, convenience, and efficiency,
often leading to industry-wide changes.

7. Major Service Innovations – These introduce

completely new services that did not exist before,
often creating new markets.
o Example: Ride-sharing apps like Uber and
Lyft, which transformed urban
transportation.
o These innovations redefine industries and
open up new business opportunities.

✅ How It Connects: Service innovations help businesses

remain competitive, attract new customers, and adapt to
changing market trends. Whether through small
improvements or major innovations, companies that
continuously evolve are more likely to succeed in the long
run.

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