Developing a Service Product Strategy Exercise Answers

Q: Explain the role and purposes of a business analysis in the process of new service product development.

A: The essential role of a business analysis is to test the feasibility and viability of any proposed new service product development.  Its purposes include

  • to estimate market potential, size and likely demand
  • to estimate the costs likely to be entailed in establishing and marketing the new venture
  • to plan and cost the means of service delivery
  • to assess the intensity, nature and costs of competition
  • to estimate sales and revenue
  • to calculate the likely return or payback over time
  • to assess “fit” with organizational aims and resources
  • to estimate the level and cost of capital investment required
Q: Distinguish between core, facilitating and supporting services.

A: In answering this question it is important that students can demonstrate their comprehension of what characterizes each of these three elements that constitute a service product strategy.

For instance, McDonald’s core service is the provision of a varied menu of fast food items that can be consumed on the premises or taken away.  Their facilitating services include the means by which orders (including their drive-through service), are taken and fulfilled, tables and bins are cleared, and the provision of parking.  Their supporting and value-adding services may include adjacent play areas for children, the provision of newspapers and magazines, and facilities for children’s birthday party celebrations.

Q:  In what ways can the development of new services benefit by reference to the characteristics of services?

A:  Main findings and recommendations are summarized below.  e.g.:

To minimize the risks associated with Intangibility and Heterogeneity:

  • Look for new service ideas that are synergistic with existing expertise and facilities
  • Blueprint the proposed new service offering thoroughly
  • Invest in pre-launch research and testing
  • Look for opportunities to standardize the service delivery system
To accommodate implications of Inseparability:
  • Involve the customer in the planning and development process
  • Involve front and backstage staff in the planning and development process
  • Ensure that all staff are thoroughly briefed and prepared
Q:  What is the role of service branding?

A:  The role of a service brand is multi-dimensional and includes

  • Distinctive and memorable identification of the service business
  • Competitive differentiation and positioning
  • Symbolization of what the business stands for and offers
  • Suggestion of service benefits
  • Evocation of associated attributes – g. trust, confidence, security, exclusivity
  • Market awareness building

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