Chapter4 120328061159-phpapp01
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This document discusses the development of service products and their core and supplementary elements. It uses Starbucks as an example of a company that has successfully developed new service innovations. The document makes the following key points: 1) Starbucks began as a place associated with coffee but has transformed itself into a place for entertainment through its Hear Music stores that sell CDs, DVDs, and books. 2) Starbucks allows customers to browse and download music wirelessly in its cafes and sync selections to their devices. 3) Starbucks is becoming a place not just for mocha but also to relax and feel at home, showing how it has expanded its core product beyond just coffee. 4) While Starbucks has found great
Chapter4 120328061159-phpapp01
- 1. CHAPTER 4 developing service products: CORE and SUPPLEMENTARY ELEMENTS LEARNING OBJECTIVES By the end ofthis chapter, students should be able: LO 1 LO 2 LO 3 Define what a service product is. Know how to design a service concept. Describe the flower of service and know how the facilitating and enhancing supplementary services relate to the core product. LO 4 LO 5 LO 6 Know how service firms use different branding strategies for their product lines. List the categories of new service development, ranging from simple style changes to major innovations. Be familiar with the factors needed to achieve success in developing new services. OPENING VIGNETTE1 Figure 4.1 Starbucks is a familiar brand that even has traditional tea consumers drinking out of its cups. As you walk along the street, the aroma drifts through the air and attracts you. It is drawing you toward the store with the green sign that has now become a common sight. You enter Starbucks, the place where you can sit down and enjoy a great cup of coffee in a comfortable settee or on a chair. You can also surf the Internet on the free wireless broadband service that is available in many of the Starbucks outlets around the world. Starbucks is a place that you would associate with coffee, before anything else. 84 Chapter 4• Developing Service Products: Core and Supplementary Elements
- 2. II T A R P PARTII As a service innovation, Starbucks has been transforming itself into a place for entertainment. It wants to extend the pop culture. It does that through Hear Music Starbucks. Customers can buy from an extensive selection of hand-selected and compiled physical CDs in the Starbucks Hear Music Coffeehouses. Alternatively, they can burn personalized CDs from a digital inventory of more than a million sound tracks, including new recordings that can only be found in some Starbucks outlets. Debut albums of some new musicians are actually launched and available only exclusively at Starbucks outlets. Starbucks also sells movie DVDs and books from emerging as well as established authors. It has tied up with Apple’s iTunes Wi- Fi Music Store to allow music playing at selected Starbucks cafes, up to the last ten songs played, to be browsed, bought and downloaded wirelessly onto the iPhone or iPod. This music will sync back to the Mac or PC the next time it is connected. Soon, we will no longer associate Starbucks with just mocha. Rather, we will see it as a place to relax and feel at home. Starbucks is a company that has developed new service innovations with great success. However, it cannot rest on its laurels as competition is intense. It has to continue to reinvent itself to maintain its edge in the industry. ...One of the trendsetters of lifestyle services, Starbucks has popularized the coffeehouse as contemporary and chic... Applying the 4Ps to Services 85