Page 106 - DMGT522_SERVICES MANAGEMENT

Unit 4: Service Strategies

Altering the Timings of Service Delivery Notes

Note Service organisations should note the periods when the customers need to or want
to deal with the service provider. Maintaining business hours accordingly would help the
customers as well as the service provider.

Example: On Sundays, usually there is heavy rush at salons, therefore, they can start
their operations a bit early and close late on Sundays.

Difference in Prices

Some service organisations may choose to vary their prices with the intention of shifting demand
from high-demand periods to low-demand periods.

Example: Theatre owners often reduce the rates of morning shows to attract crowds in
that show or fast food joints reduce the rates during noon.
However, this call for cautious approach by companies as the customers might expect the same
prices during their next interaction with the service company. Also, there is the danger of the
service firm ending up attracting other segments instead of their target market segment.

4.3.2 Altering Capacity to Meet Demand

Some of the strategies are:
Employ Part -time or Contract Workers

Organizations focus on recruiting part time or contract workers instead of full-time employees
in order to meet the changes in demand.

Example: Retail outlets employ more floor executives during the high demand season
like festival season and consultants hire additional staff during the financial year-ending when
there is a peak demand for their services.

Outsource

This is a very popular method employed by today’s organisations to handle demand variations.
When firms feel that hiring additional workers to meet a temporary increase in demand is too
expensive, they employ the services of other firms that specialise in performing the required
functions or tasks. This is advantageous as an organisation can save money and time on training
the new employees and they do not have to bother about excessive manpower when their
business slows down during a slack period. For example, organisations outsource their
recruitment activities to HR consultants.

Share Facilities or Rent Equipment

Another approach that can be adopted by organisations is to share their facilities to meet the
variations in demand.

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