14. From Products to Services (Chapter 15)
Terms in this set (4)
From Product to Service
One of the reasons companies move through the service infusion process is to develop closer relationships with customers, this kind of arrangement may raise concerns about "who owns the customer."
How do we figure out what to do?
1. Figure out what you (the firm) actually do.
a. What is the core benefit you provide?
b. Are you competitive at this?
2. Find a way that you can build off of what you (the firm) do to add value to consumers by either...
a. creating the outcome for the consumer, or
b. creating more value by adding a service component of the business?
Three ways from Fast Company
1. "Servicize" It
- Convert the financial model from selling a "good" to selling on-demand access.
- Shift the financial model away from selling a "good" to selling "time" -uptime, time savings, speed of delivery, etc.
2. Expand It
- Add education or other interactive experiences that reinforce the core business while further addressing customer needs.
- Pull together a more holistic set of products and services using a broader view of the customers' needs and desires, including how the offering is priced and financed.
3. Digitize It
- Use mobile devices to collect and interpret data to provide knowledge, information, and service offerings.
- Use the power of the network to automate business process in ways that make life easier for customers while locking them into new services.
Challenges to move to Services
1. Customization (but not too much)
- Companies that move toward services find that customers want customized solutions, which creates tension between meeting the customer's expectations and doing so in such a way that the firm makes money.
- The key is striking a balance between customization and standardization.
2. Capabilities (get the people who can do it)
- Through the transition, many of the existing staff (about a third) that previously supported the customer base will not be able to adjust.
- Form partnerships to carry out service delivery and/or hire people with the capabilities you need.
3. The organization Structure
(who manages the new function?)
- Many firms create a free standing business unit for their service offerings.
4. Culture (is your current staff willing to change?)
- Most product companies are engineering and technology focused (i.e. infatuated with their products), but a service company needs to be totally focused on the customer.
- Top management must provide strong support for the services business.
5. Collaborate with customers (embrace the "co-")
- Co-design, co-development, co-production, and co-delivery of new and innovative services.
6. Catch-all for how to identify the value proposition
- How do you best articulate the benefit of the service?
- How do you price it?
- How do you measure success?
- Are channel partners needed?
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