Hybrid products in logistics – part 1
Hybrid products in logistics – part 3
Hybrid products in logistics – part 4
1. Quantity and heterogeneity of partial services.
It has already been emphasized that hybrid products are characterized by the occurrence of combinations of various partial services. The greater the scope and diversity of these individual partial services, the higher the complexity of creating a service package.
2. Integration of partial services.
It should be emphasized that there is an integrative way of treating and analyzing tangible products and their accompanying services, which goes beyond their simple connection and which in the future will become a critical success factor not only in relation to service production, but also for their sale on the market. The degree of integration is limited when individual partial services are relatively independent of each other, and customers can easily substitute them with partial services from other providers. In an extreme case, individual components are so strongly functionally linked that their use can only be fully utilized in mutual combination.
3. Degree of individualization.
Since the task of hybrid products is to solve customer problems in order to provide them with individual benefits, it is necessary to bundle individual partial services in a way that is specific to different customers. We are dealing with a limited degree of individualization when there is a customer-specific configuration of standard services. If, on the other hand, partial services are prepared and produced due to specific customer requirements, such a situation means a high degree of individualization. Adapting a hybrid product to specific customer expectations or wishes requires integrating customers into the service production processes.
4. Time dimension of service production.
Partial services aimed at solving complex customer problems are often carried out along the entire “customer-activity chain” or “consumption chain.” Service production and interactions with the customer in the case of a hybrid product generally have a longer time dimension than is the case with “stand-alone products.” This means that during the production of services, changes and adjustment actions may occur, which naturally leads to an increase in service complexity (Figure 3). The increased complexity of a hybrid product forces sales staff to demonstrate comprehensive knowledge of products and the entire spectrum of possible services – not only within their own company, but also in relation to market cooperation partners. Special requirements are addressed here to the acquisition and processing of information by sales staff. Following this, there is a need to modify incentive and remuneration systems in sales and customer service.
Profiling competition processes through the offer of hybrid products requires knowledge and understanding of their value desired by customers, which is of key importance in the case of industrial procurement decisions. Due to the high intensity of competition in many sectors of the economy, from information and telecommunications technology, through machine and equipment construction, to financial services, many companies expect competitive advantages as a result of implementing and effectively marketing an offer of an integrated combination of tangible goods and services.
Companies such as IBM, GE, UPS, Nokia, or even Rolls-Royce, profit from offering specific, complex solutions for customers (i.e., tangible-service packages) instead of isolated material and service offers. These selected examples indicate, on the one hand, the strategic potential of competition associated with the offer of hybrid products, and on the other hand, many other company activity reports indicate failures associated with competing with so-called special solutions for customers. Hence, a natural question arises: under what conditions can specific solutions for customers constitute a potential for developing competitiveness? In order to find an answer to this question, a differentiated analysis of the concept of competitive advantages should be made. Both providers and buyers expect benefits from competition. Benefits for providers – compared to competitors – result from the positively distinguishing skills and resources of the company, enabling the offering and implementation of an effective solution to specific customer problems. Benefits for customers result from the fact that they consider the solutions offered to them to be permanently superior compared to the competition. To what extent this advantage can be proven is decided by the customer based on a confrontation of the desired benefits and the costs associated with a given offer. Benefits for customers represent the central target variable for marketing decisions and are defined in the literature as the desired, expected benefit from net utility, or as expected utility value.
The article comes from the magazine “Logistyka” 3/2011.