Services Marketing

Chapter 10 : Product : Packaging the Service

Service Product Level

The Core Product
The Actual Product
The Augmented Product
The Potential Product

Service Product Decisions

Market Penetration
Market Development
Product/Service Development
Diversification

Branding in services

Types of Branding

Categories for New Service Development

New Service Development Process

Generation of Ideas
Screening
Testing the Concept
Business Analysis and Design of Service
Test Marketing
Infrastructure Development
Service Launch

Product Life Cycle

Introduction
Growth
Maturity
Decline

Chapter Summary

Packaging the service product is an important aspect of the marketing mix concept. It enables a company to differentiate itself from the services of its competitors. An understanding of the various product levels namely, core product level, actual product level, augmented product level, and potential product level helps a company to recognize and meet the customer needs at each level.

This increases customer satisfaction. While taking product decisions, marketers can choose to operate through the four strategies namely market penetration, market development, product development, and diversification. After deciding on a strategy to compete in the market, a company should concentrate on branding its services.

It can choose to brand under a single name or offer different brands for different services. On the other hand, it might also choose a combination of both types of branding. Proper branding of a service and clear communication will result in an increase in brand loyalty among customers which will have a positive affect on the profit margins.

Further, when developing a new service, a company has to decide under which category it should be developed. For instance, a service can be developed due to major innovations in a particular industry, to introduce new services in addition to the existing services that may or may not be offered by other companies, to improve the service offerings to enhance customer convenience, or due to minor changes in style.

After deciding the category under which a service has to be developed, a company has to develop a new service. This process involves generation of ideas, screening, testing the concept, business analysis and design of service, test marketing, infrastructure development, and launch of the service. Launching a new service is just the beginning as a company should closely monitor various stages in the product life cycle and take timely decisions to operate successfully.

Marketers should try to earn profits at each stage - launch, growth, and maturity stages, and should decide on discontinuing a particular product/service if it reaches the decline stage. However, a company might also choose to reposition the product at this stage.

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