The Augmented Service Offering: A Conceptualization and Study of Its Impact on New Service Success

Unlike companies that produce tangible goods, service firms typically cannot rely on product advantage as a means for ensuring the success of a new service. Developing a competitive response to a tangible product may require significant investments of time and effort. In many cases, however, competitors can easily duplicate the core elements of a firm's new service. This fundamental difference between new products and new services means that managers who hope to find the keys to new-service success must look to factors other than sustainable product advantage. Chris Storey and Christopher Easingwood suggest that managers must understand the totality of the service offering from the customer's perspective. They explain that the purchase of a service is influenced not only by the service itself, but also by such factors as the service firm's reputation and the quality of the customer's interaction with the firm's systems and staff—in other words, by the augmented service offering (ASO). Using the results of a study they conducted in the consumer financial services industry in the U.K., they identify the components of the ASO, and they examine the relative contributions of these components to the success of new services. In their model, the ASO comprises three elements: the service product, service augmentation, and marketing support. The core of the ASO—the service product—includes such dimensions as product quality, product distinctiveness, and perceived risk. The study's results suggest that improvements in the service product open up new opportunities for the firm, but have only modest effects on sales and profitability. Rounding out the ASO model are service augmentation and marketing support. Service augmentation encompasses such dimensions as distribution strength, staff-customer interactions, and reputation. The customer recognizes and responds to these elements of the ASO, but they are not part of the product core. Marketing support involves those marketing and management actions that affect the quality of the product and its augmentation, even though customers typically are not aware of them. These elements include knowledge of the marketplace, training of contact staff, and internal marketing. Enhanced service augmentation has significant effects on profitability and sales for the firms in this study, but it does not offer enhanced opportunities. The marketing support elements contribute significantly to all aspects of performance for the firms in this study.     

A note on Peltzman's theory of offsetting consumer behavior

A re-estimation of the basic Peltzman (1975) model using a richer data set strongly indicates that mandated automobile safety legislation has been important in reducing traffic fatalities. There is little or no evidence of offsetting consumer behavior.     

Still in democratic deficit

The rejection of the Lisbon Treaty by the Irish electorate has given new vigour to the debate on the European Union’s widely perceived democratic deficit. Does the EU indeed have a serious democracy problem? What are the options open to the European political leadership and which of these should be acted upon?     

Ground handling services at European hub airports: Development of a performance measurement system for benchmarking

The liberalization of ground handling in Europe forces airports to assess their performance relative to their competitors in order to remain competitive and sustain long-term competitive advantage. Together with main EU hub airports, action research was conducted for one year to develop a holistic performance measurement system (PMS) for ramp services. The resulting PMS entails a process-based perspective and reflects the supply chain of airport logistics. As the findings of an ex-post validation suggest, the system represents a suitable basis for competitive benchmarking activities.     

Public market finance for growth‐stage companies in emerging markets: The U.S. alternative IPO moves to fill the gap

Lacking from the options currently available to most growth‐stage companies located in the emerging markets of the world is effective access to public finance. Unlike the United States, these companies are shut off from access to their local public markets. Fortunately a solution exists in the form of an alternative initial public offering (AIPO) onto the over‐the‐counter bulletin board market of the United States (OTC BB). As the name implies, an AIPO is an alternative form of listing that allows companies in emerging markets to gain access to the deepest and most liquid capital market in the world. © 2008 Wiley Periodicals, Inc.     

Determinants of Success in the Development of Applications Software

In this article, the third in the trio of software innovation articles, Chris Voss outlines the key factors that determine whether a new software development is likely to be successful. His research draws on an innovation framework that has emerged from previous research. His results are similar to those of the earlier studies and suggest that the software innovation process has many demands that are common to innovation in other product areas.