Page 78 - DMGT522_SERVICES MANAGEMENT

Unit 3: Nature/Characteristics of Services

The service marketer has to communicate the reversibility in the purchase to his target Notes
market. Otherwise they tend to be price sensitive. When SBI made provisions for its
mutual funds, branded as Magnum, to be traded in the stock market, and to be treated as
an instrument of lien (a loan could be taken against it) it became popular, although the
stock market was lukewarm. The risks have to be clarified and provisions for alternate
solutions have to be made.
7. Latent Demand: This is a demand that lies deep inside a consumer unquenched, as no
service offer exists to satisfy it. The consumer may not be able to accurately articulate his
demand and features of the offer and therefore may not be able to voice his desire. But
when such a service does come in the market as an offer, he grabs it.

Example: Good day-care centres and crèche: With women coming out in the workforce in
larger numbers, there was an urgent need for such services. Prior to this, there were many who
either could not enter the workforce or had to discontinue their jobs after motherhood. This is
one of the reasons for the popularity of ‘play schools’ and Euro Kids, after ayahs became a fast-
vanishing breed.

Cellphone services: In metros, the less-than-satisfactory infrastructure services were taking
a toll on business, communication and connectivity. Transport systems were creaking,
carrying seven times their normal capacity and it was taking longer for people to attend
business meetings. The MTNL network was not satisfying people and the demand for the
phone was far outstripping supply. All Mumbaikars and Delhiites felt the need for being
connected while on the move. So when the cell-phone services finally came to India, the
overwhelming demand took almost everyone by surprise. India Today brought out a
cover story with an imaginative sobriquet for the cell phone users: Cellerati.
Sangam direct: With urbanization came commuting, DINKYs (Double Income No Kids,
Yet), and plain dual income. This left less and less time for shopping and leisure. So when
Hindustan Lever Limited (HLL) started Sangam Direct, the direct-retailing venture
promising home delivery of 5,000 brands when ordered through the telephone,
Mumbaikars leapt at the offer. It answered their latent demand for shopping at ease
without the crowd... or better still, having items home delivered.
8. Seasonal or irregular demand: Demand for certain services fluctuates with seasons or is
irregular. Sometimes there is regularity in their irregularity (seasonal). Some seasons
there would be peak demand, while in others there would be less. This greatly affects the
service management, delivery and profitability. The service marketer should, with suitable
promotions shift the demand to off-peak hours/seasons.

Example: Hotel accommodation in Goa during the monsoon: While there is hardly any
accommodation available in Goa during summer, rooms go abegging during the monsoon.
Hoteliers then bring out special monsoon packages with lower price and positioning on romance
(“Come to Goa during the monsoon for your honeymoon – it’s you and the rains!).
Movie theatres – the matinee show is not as popular as the evening shows. The theatre
owner tries a time shift of value by lowering the price for a matinee show.
McDonald’s and many others have ‘Happy Meals’ at a lower price during less crowded
afternoons.
Esselworld: During the monsoon the theme park positions itself on romance, siren-calling
the romantics, simulated ‘rain dancing’, etc.
9. Unwholesome demand: People tend to lose interest in the service offer when they receive
new information about the process or ingredient in the service. The new information is

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