Services Differentiation

When the physical product cannot be differentiated easily, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are:

^ Ordering ease refers to how easy it is for the customer to place an order with the company. Baxter Healthcare has eased the ordering process by supplying hospitals with computers through which they send orders directly to Baxter; consumers can now order and receive groceries without going to the supermarket by using Web-based services such as Peapod and NetGrocer.

^ Delivery refers to how well the product or service is delivered to the customer, covering speed, accuracy, and customer care. Deluxe Check Printers, Inc., has built an impressive reputation for shipping out its checks one day after receiving an order—without being late once in 18 years.

^ Installation refers to the work done to make a product operational in its planned location. Buyers of heavy equipment expect good installation service. Differentiation by installation is particularly important for companies that offer complex products such as computers.

^ Customer training refers to how the customer's employees are trained to use the vendor's equipment properly and efficiently. General Electric not only sells and installs expensive X-ray equipment in hospitals, but also gives extensive training to users of this equipment.

^ Customer consulting refers to data, information systems, and advising services that the seller offers to buyers. For example, the Rite Aid drugstore chain's communications program, called the Vitamin Institute, provides customers with research so they can make more educated judgments and feel comfortable asking for help. On the Web, Rite Aid has teamed with drugstore.com to offer even more health-related information.34

^ Maintenance and repair describes the service program for helping customers keep purchased products in good working order, an important consideration for many products.

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