Page 164 - DMGT510_SERVICES_MARKETING

Unit 9: Service Product and Operation

Others have progressively widened their product offers: Notes

Example: Travel major Thomas Cook offers the entire gamut of travel services including
ticketing, visa and passport services, tour operation management, foreign exchange facilitation,
travel insurance, Para- banking services like travellers’ cheques and credit cards.
State Bank of India offers the entire gamut of retail banking services like personal banking,
credit cards, home loans, personal loans, small business finance, large institutional finance,
international banking, agricultural banking, insurance, bancassurance, etc.
The complete bouquet of all offers of a firm is called Product (or Offer) Mix. It is with this set that
a service firm can offer the maximum choices to its customers and enhance its strength in the
market.

How can a service firm increase its product mix to get the best possible response from the
market? It can do so in the following three ways:
1. By creating a service product line (new product development),

2. By increasing the number of service offer items within each product line (length), or
3. By increasing the number of product lines (width).
A Service Product Line can be explained as a group of closely related offers, targeted at the same
type of customers, having the same end use. A bank having twenty different types of mutual
fund schemes would fall under one product line. If it offers bancassurance products, then the
latter will fall under a different product line altogether (insurance), having different end use and
different types of customers with different needs. Very simplistically, the different brand names
that are available under a particular product line (or the length of the service product mix) can
be an indication of the strength of the service product line.

Example: SBI Mutual Fund has over twenty-six different basic offers, like Magnum
Children’s Benefit, Magnum Gilt, MSFU Pharma, etc.

HSBC Mutual Fund has over fifteen schemes like Gilt Fund Long Term, MIP Regular, Income
Investment, etc.
The breadth (or the width) of the product mix of a service firm refers to its different business
propositions or different business lines. As mentioned before, certain service firms specialize in
one or a few product lines (i.e., their breadth is less) while others have deliberately spread
themselves wider to cover more business areas, trying to satisfy variety of needs of the market.
In the case of the latter, sometimes, they may be addressing themselves to an entirely different
audience.

Example: ITC, the tobacco giant, is in the hospitality business (Welcome chain of hotels),
travel and cargo (International Travel House), golf course management, education (Sangeet
Research Academy, Kolkata) and off-the-shelf leisure wear branded as Wills Lifestyle, etc.
ICICI, the country’s largest private sector bank, has diversified into insurance (ICICI Prudential
and ICICI Lombard), informational technology (ICICI InfoTech), home and personal loans, etc.

The depth of the service product mix of the firm gives another perspective to the number of
items in a product line. It gives to the customer varieties of choices of the same service product
– either by weight, size, volume, colour or other special features.
Pure service offers being intangible, the first four choices may not be feasible. Addition of
special features to the same service product might give more choices to the customers. In the

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