Page 96 - DMGT522_SERVICES MANAGEMENT

Unit 4: Service Strategies

Focus strategy helps a service firm to concentrate on satisfying the needs of its target customers Notes
better. They can use either the Differentiation or Cost Leadership strategies or both, within the
overall Focus strategy. Pressman is into financial services advertising while Mudra Institute of
Communications, Ahmedabad (MICA) is a B-school for advertising industry. SOTC, before
being taken over by Swiss travel management company Kuoni was only into outbound tour
packages. The reasons ranged from better predictable and manageable infrastructures abroad to
better understanding of the Indian customers and their preferences. They were therefore able to
uniquely position themselves with their “Ghar ka khana” (‘Food like at home’) promotions.

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Caution BCG Matrix, GE Business Screen and Michael Porter’s Model is used for Corporate
and SBU level planning as well as for marketing strategies.

4.1.4 The Ansoff Grid

One other growth model that is useful for marketing strategies of a service firm is the Product-
Market Growth Matrix proposed by Professor Igor Ansoff.
Figure 4.4: Igor Ansoff’s Product/Offer-Market Matrix

OLD OFFERS NEW OFFERS

MARKET PRODUCT
PENETRATION DEVELOPMENT
STRATEGY STRATEGY
OLD MARKETS/

Convince its customers Give newer bouquet
to consume more of its of offers, satisfying
OLD CUSTOMERS
different needs for its
present offers

present customers

MARKET DIVERSIFICATION
DEVELOPMENT STRATEGY

STRATEGY
NEW MARKETS/

Service firm continues The service firm
with its old offers but targets entirely new
NEW CUSTOMERS
now to different customers with
customers different offers
Growth becomes an objective for the service firms as it will garner revenues, make it competitive
and strong - and get profits. Growth can be achieved only with greater understanding of the
service firm’s markets and its offers – and deliberately and methodically utilising them as
growth drivers. This is the very basis of the Ansoff Model which outlines four growth options
for the service firm.
Thus the Ansoff model takes into account a service firm’s offers and its customers. It splits the
offers into those which are at present a part of the bouquet of the service firm and those which
are absolutely new; similarly it categorises the service firm’s customers as those who are at
present patronizing its services and those who are the newly targeted. Ansoff could elaborate on
four different strategies to be followed by the service firm to grow. They are:
Market Penetration Strategy: Here the service firm concentrates on growing by trying to convince
its present cache of customers into consuming more of its services – by increasing their appetite.

Example: A cell phone operator will try to segment its market by usage – heavy users,
moderate users and light users of its cell phone service. It will then try to convince all of them,

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