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Unit 9: Service Product and Operation
Figure 9.1: Theodore Levitts Total Product Concept Notes
The augmented product (or the extended product): With further competition, marketers sought
more differentiation and added more features/attributes to the original product. At the third
level of the product, the features were becoming more and more intangible and they were all
services. This time, they added guarantees/warranties, customer education and training, different
payment options, installations, home deliveries, etc.
The intangibles were offering mostly psychological benefits to the consumers, with the objective
of enhancing the value of the core and the formal/actual product. It definitely helped to
underscore the differentiation and get noticed.
Guarantees warranties, and free after sales service assured the customer of continuing reliability;
strong brands implied trust; customer education and training went a long way towards reduce
the consumers anxiety in handling complex features; easy finance helped the customer to make
a spot buying decision courteous behaviour and prompt dealing would increase loyalty. And
finally, when all competitive products looked the same, service became the only differentiator.
Example: Between two similar brands of washing machines, a customer would plunk
for the one that had a better service component. Thus despite their intangibility, services became
the crucial factors for a firm to derive competitive advantage.
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