Products are just part of the service

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The Independent Online
SERVICE is all the rage in business. Even traditional manufacturing companies cannot prosper on the back of product quality alone. They must also achieve prompt delivery, competitive price, and after-sales back-up.

In that sense, Christopher Lovelock, a British-born business academic who has worked extensively in Europe and the US, is hardly breaking new ground in coming up with a book with the title Product Plus: How Product + Service = Competitive Advantage (McGraw-Hill, pounds 22.95).

But Lovelock suggests that he is less keen on breaking new ground than in finding different ways of making his points. Consequently, the book is broken into easily digestible chunks, complete with cartoons that poke the odd bit of fun at management types.

More important, perhaps, is the presence alongside such predictable case studies as Federal Express - 'It's such a remarkable company, it's not surprising it shows up in all these surveys,' he says - of less well-known organisations, such as Southwest Airlines and the mail-order nursery company White Flower Farm and - amazingly for a book published in the US - such organisations as BT and FirstDirect.

'I'm British. I was deliberately trying to make the book accessible worldwide,' Lovelock explains.

The idea he is trying to put across is that 'product plus' - a term he admits borrowing, probably from advertising - means something more than 'just something extra for customers'. Rather, 'a product- plus organisation is one that in serving its customers well also offers better value to employees, suppliers and the owners of the business - and creates a positive impact on the broader community.' This type of management 'looks to competitive advantage, but it's concerned with sustainable strategies, not short-term gain'.

Conscious that there is a danger in selecting companies to be emulated, he points out that three of the organisations featured in the book - FedEx, Boston's Beth Israel Hospital and Southwest Airlines - are in the top 10 of the annual listing of the 100 best companies to work for in the US. 'It shows how you can be successful and still be good to work for.'

Whether that 'feel-good' factor applies in the same way to BT is open to debate. But Lovelock insists that the company merits its place in the book for reasons other than the desire to appeal to British readers.

He believes the work it is doing to target small business customers, all but ignored for years, is genuinely worthy of comment and a 'model for intrapreneurship' - the term for encouraging different parts of a large corporation such as BT to deal with each other like customers.

He sees the bringing in of outsiders - BT's managing director, Michael Hepher, is a former life insurance executive, for instance - as a powerful catalyst in this area. 'No service business is unique,' he says. 'Frequently somebody from outside brings fresh ideas.'

Indeed, this is a theme of the book, which centres on a concept developed by Lovelock and some French colleagues several years ago called the 'flower of service'. The idea is that while core products vary from one type of business to another, supplementary services, such as billing, order taking and the like, are common to a great many.

Technology, of course, is a great aid to service, particularly at such companies as FedEx and BT. But Mr Lovelock - who is currently 'delving into the technical aspects' for his latest project - warns that this is not the be-all and end-all.

'People spend huge amounts on hi-tech and forget the basics,' he says, citing the example of the international hotel that had all kinds of technological aids but only one stapler.

The result was a long queue of disgruntled guests trying to pay their bills.