**2.1. The concept of the service product**

The data in **Table 4** confirm that the development of the telecommunications services market

• long-distance and international telephone communication,

• the mobile communication technologies supplant the fixed communication services due to the high level of competitiveness of the mobile communication and IP telephony;

• a wired connection is currently dominated in the Internet access. It is explained by the faster connection speed compared to a wireless connection, the ability to transmit the large

• with the introduction of fourth and fifth generations of the technologies, which have a higher data transfer rate and lower delay in sending packets than 3G technology, a gradual decrease in the share of fixed communication and in the provision of data services is predicted.

Despite the fact that the technologies provide continuous improvement of the quality of telecommunication services, the key aspect of the market interaction between producer and

A number of negative factors can be identified for the further development of the Russian

• a slowdown of GDP growth rates, a decrease in the income level of the population, which, in order to optimize the expenditures, reduces the consumption of services with the high elasticity, which require or the support by the telecommunication services, or the telecom-

• the saturation of the mobile communication services market, which means the exhaustion of opportunities for extensive development (there are 151 active subscribers per 100 population in Russia, which exceeds the level of the developed countries by a quarter (120)

amounts of information as well as a high degree of reliability and security;

consumer remains the process of the telecommunication services providing.

market of telecommunication services [2, 3]:

munications services themselves;

is primarily due to the dissemination of the new technologies [1]:

**Table 4.** The main types of the telecommunication service providers.

• access to the Internet,

• digital television, etc.

• mobile on-line-services, etc.

• cable TV,

• data-services, • mobile Internet,

**No Type of provider Types of services provided**

1 Fixed-line operators • local telephony,

4 Telecommunication Networks - Trends and Developments

2 Cellular operators • voice services,

The basis for the formation of the concept of the telecommunication service product is a stable tendency to change the structure of the world economy in favor of the service sector. This major institutional change is accompanied by the fragmentation of the industrial monopolies into industrial and service components and leads to the complication of economic ties and relations in which the consumer begins to play an increasingly important role. Subjective assessment of the value of services and the technological achievements contribute to the individualization of consumption and as a response of producers to the needs of the market—to the customization of the production. The proposed concept of the service product allows to divide the value delivered to the consumer of services into its components and to orient service organizations to strategic product innovations.

The service product is an independent service or a system that combines the material products and related services [4].

The expediency of linking services and goods in a service product is confirmed by modern trends in the development of the service sector. First, the provision of a number of services involves the consumption of certain goods, items of material nature. At the same time, many material objects are closely tied to the services and only to the services. To obtain a mobile communication service [5], the consumer needs to purchase a special device (phone, tablet, etc.) and a SIM card that will allow using the communication service. With the development of technical progress, with the spread of high technology, this trend is increasing.

Second, the consumption of some goods is supplemented by the acquisition of accompanying services. Such an addition can increase the attractiveness of the goods for consumers. Therefore, the purchase of the smartphone becomes attractive, as it allows access to the Internet and to various mobile applications that allow the customer make purchases, manage financial resources, etc.

The results of research in the field of the quality of services assessing [9–11] confirm that the degree of perception of the service product is formed for the consumer as a cumulative estimate of the consumption of all its components. The competition in the provision of the services, correlated with the primary utility, has already led to a situation where further improvement in their quality depends on the achievements of scientific and technological progress and significant investments. Therefore, the opportunities for gaining competitive advantages due to the perception of the consumer value of the service product are associated with the added components of it, which are variable from the point of view of the offer of

Customization of the Telecommunication Market Based on the Application of the Concept…

http://dx.doi.org/10.5772/intechopen.79030

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To determine the composition of the service product in terms of the secondary perceived

• compulsory services, provided by the service organization, since their absence or poor

• noncompulsory services, fulfilling the role of strengthening of the consumer perception

The accompanying services do not appear on the market as an independent object of purchase and sale. They are provided to consumers in the form of a free supplement as the price of the accompanying service does not appear as an independent part of the payment, but is included by the seller into the market price of the service product. The accompanying services act as the ensuring of the purchased product delivery to a location specified by the buyer, as the setting up or adjusting of the purchased product, as the providing of some additional information, as the training to use the purchased product, as the spare parts supplying, as the

The derivative services include the services, the availability of which is established by the rules for the provision of services preceding the derivative services in accordance with their nature and purpose. The need for derivative services arises in the conditions when the consumer receives the right to provide him with some kind of basic service. Together with this right, a potential opportunity to use a whole bunch of derivative services (of both paid and

The diversity and compatibility of the telecommunication services with other services, as well as with some material objects, for example, devices and equipment, create the prerequisites for the application of the concept of the service product for the telecommunications industry.

various service organizations. This is about a secondary perceived utility.

utility, it is advisable to consider three types of services [12]:

The additional services can be divided into two groups:

quality adversely affects the final assessment of the consumer;

and giving a certain individuality to the service organization.

providing of the special guarantees, insurance services, etc.

partially paid or already included into the price) is acquired.

• additional services,

• derivative services.

• accompanying services,

Third, the basic service is accompanied by the receipt of related goods and services [6]. For example, air passengers can receive the food, press, duty-free goods in the flight, baggage transportation services, etc. When staying at the hotel, the customer can order a taxi to the airport, tickets for the concert, etc. Modern Internet technologies allow almost any service to be accompanied by financial online operations.

An important property of the service product is its multiattributivity. The service product is a collection of many attributes with different properties and purposes. Therefore, one can single out in it a basic, or a primary utility, directly correlated with the satisfaction of the customer need, which has become an incentive for the purchase of the service product.

The customer can add to the primary utility the additional attributes that create additional or secondary utility and increase the beneficial effect for the consumer due to greater comfort, lower time costs, etc.

The additional attributes can be both functional (objective) and emotional (subjective) results of the perception.

In this case, the most important difference between the multiattributivity of the service product and the multiattributivity of a good is that for different consumers, the basic utility can be formed by various services and goods that are part of the same service product.

The multiattributivity of the service product and the "floating" (under the influence of consumer preferences) nature of the primary utility explain the second important property of the service product—the interdependence between all its parts. This interdependence determines the inclusion into the service product of the maximum possible (from the point of view of economic feasibility) number of attributes with the possibility of choosing the attribute which is important for the consumer.

To order the attributes of the service product, it is useful to divide them into two groups [7]:


In this case, as a rule, both basic and additional utilities are most often created and offered not by one firm, but by a group of participants of the industrial market [8]. This premise makes it possible to combine optimally the model of multiattributive goods with the model of the industrial "chain" of the added value creating, and, accordingly, of the utility creating.

The results of research in the field of the quality of services assessing [9–11] confirm that the degree of perception of the service product is formed for the consumer as a cumulative estimate of the consumption of all its components. The competition in the provision of the services, correlated with the primary utility, has already led to a situation where further improvement in their quality depends on the achievements of scientific and technological progress and significant investments. Therefore, the opportunities for gaining competitive advantages due to the perception of the consumer value of the service product are associated with the added components of it, which are variable from the point of view of the offer of various service organizations. This is about a secondary perceived utility.

To determine the composition of the service product in terms of the secondary perceived utility, it is advisable to consider three types of services [12]:

• additional services,

Second, the consumption of some goods is supplemented by the acquisition of accompanying services. Such an addition can increase the attractiveness of the goods for consumers. Therefore, the purchase of the smartphone becomes attractive, as it allows access to the Internet and to various mobile applications that allow the customer make purchases, manage

Third, the basic service is accompanied by the receipt of related goods and services [6]. For example, air passengers can receive the food, press, duty-free goods in the flight, baggage transportation services, etc. When staying at the hotel, the customer can order a taxi to the airport, tickets for the concert, etc. Modern Internet technologies allow almost any service to

An important property of the service product is its multiattributivity. The service product is a collection of many attributes with different properties and purposes. Therefore, one can single out in it a basic, or a primary utility, directly correlated with the satisfaction of the customer

The customer can add to the primary utility the additional attributes that create additional or secondary utility and increase the beneficial effect for the consumer due to greater comfort,

The additional attributes can be both functional (objective) and emotional (subjective) results

In this case, the most important difference between the multiattributivity of the service product and the multiattributivity of a good is that for different consumers, the basic utility can be

The multiattributivity of the service product and the "floating" (under the influence of consumer preferences) nature of the primary utility explain the second important property of the service product—the interdependence between all its parts. This interdependence determines the inclusion into the service product of the maximum possible (from the point of view of economic feasibility) number of attributes with the possibility of choosing the attribute which

To order the attributes of the service product, it is useful to divide them into two groups [7]:

• invariable attribute of the service product, without which the consumer cannot imagine the

• variable attribute of the service product, the presence or absence of which will signal to the

In this case, as a rule, both basic and additional utilities are most often created and offered not by one firm, but by a group of participants of the industrial market [8]. This premise makes it possible to combine optimally the model of multiattributive goods with the model of the industrial "chain" of the added value creating, and, accordingly, of the utility creating.

consumer about the class and status of the goods (secondary perceived utility).

need, which has become an incentive for the purchase of the service product.

formed by various services and goods that are part of the same service product.

realization of the basic function (the primary perceived utility);

financial resources, etc.

lower time costs, etc.

is important for the consumer.

of the perception.

be accompanied by financial online operations.

6 Telecommunication Networks - Trends and Developments


The additional services can be divided into two groups:


The accompanying services do not appear on the market as an independent object of purchase and sale. They are provided to consumers in the form of a free supplement as the price of the accompanying service does not appear as an independent part of the payment, but is included by the seller into the market price of the service product. The accompanying services act as the ensuring of the purchased product delivery to a location specified by the buyer, as the setting up or adjusting of the purchased product, as the providing of some additional information, as the training to use the purchased product, as the spare parts supplying, as the providing of the special guarantees, insurance services, etc.

The derivative services include the services, the availability of which is established by the rules for the provision of services preceding the derivative services in accordance with their nature and purpose. The need for derivative services arises in the conditions when the consumer receives the right to provide him with some kind of basic service. Together with this right, a potential opportunity to use a whole bunch of derivative services (of both paid and partially paid or already included into the price) is acquired.

The diversity and compatibility of the telecommunication services with other services, as well as with some material objects, for example, devices and equipment, create the prerequisites for the application of the concept of the service product for the telecommunications industry.
