Page 86 - DMGT522_SERVICES MANAGEMENT

Unit 3: Nature/Characteristics of Services

13. The internet provides firms with the opportunity to communicate with end users without Notes
the need for intermediaries such as retailers. This allows manufacturers to:
(a) Establish user network groups
(b) Test product ideas

(c) Gain access to product ideas
(d) Listen to consumer concerns

(e) All of the above
14. Research by Franke and Piller (2004) explored how:
(a) To create new service ideas
(b) Service developers can reduce costs and improve efficiencies

(c) Firms can integrate users into the design and production process
(d) EBay can develop more new services
15. What is the 5th unique characteristic of service markets given four characteristics as follows:
Lack of ownership, Intangibility, Inseparability, Heterogeneity.
(a) Perishability

(b) Serviceability
(c) Protractability
(d) Homogeneity

Case Study Case: Do Services have Different Characteristics than

Goods?

EPC Airlines was promoted by the Khemkas, the Chennai based Marwari business
Nfamily. They took advantage of the second wave of liberalisation in the aviation
sector in the early nineties, to venture into air transportation business. The NEPC group is
still in the business of processed food (atta), wind power, textiles, etc. But they failed in
their airline venture.
The aviation sector was opened up partly after the return of Mrs. Indira Gandhi to power
in 1980. Feeder routes to small cities were charted and a separate airline, Vayudoot, was
formed. By the nineties, private participation was allowed and a rash of smaller airlines
came into the picture, plying through the feeder routes like Nagpur, Bhopal, Raipur,
Jagdalpur, Goa, etc.

NEPC Airline had the Dornier aircrafts, which are small, seating about 25 people, with the
luggage compartment designed in the snout. It flew short and non-metro destinations like
Indore, Pune, Nagpur, Mysore, and the bigger cities of the south like Bangalore, Chennai,
etc.
It came in the news by quickly taking over a few smaller airline companies, like East-West
Airlines, Span airlines, etc. But the government restrictions, limiting its flights only on
Contd...

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