Page 98 - DMGT522_SERVICES MANAGEMENT

Unit 4: Service Strategies

standing. It really is stepping into unknown territories. Diversification strategy is mostly adopted Notes
when the service firm feels that its growth hunger is not going to be satisfied in the present
industry or service product and by tracking the present customers, and when it has plenty of
surplus funds.

Example: Mahindra group, which are into manufacturing of automobiles, venturing
into the realty business through the ‘white knight’ acquisition of GESCO, and further into
Mahindra holiday resorts and time share service business are all examples of diversification
strategy. All the above growth models are used by service firms to allocate and reallocate
resources for its SBUs and its different offers/service products. They have been criticized for
being overtly simple but have also been praised for their utility.

4.1.5 Marketing Strategy at Functional Level

Strategy for a marketer would imply a plan of action that is the prerogative of top marketing
management, is usually long term and comprehensive in concept, and affects the whole
organisation and the firm’s whole market. It consists of the following activities:

Conduct a situation analysis
Develop marketing objectives
Select target markets, after appropriate segmentation and measure market demand

Determine positioning and differential advantage(s)
Design strategic marketing mix (es)
Situation analysis consists of the following sequential steps:
1. Analyse and evaluate the past marketing plans and forecast the probable future impact on
them. This will serve as a guiding tool for revision of the plans and save the firm from
‘reinventing the wheel’ and avoid such traps as ‘change for change’s sake’. But appropriate
introspection could make firms abandon many ‘holy cows’ concepts and go for fresh and
innovative change of plans.
2. Evaluate the external as well as internal environment factors of the service firm. The
external environment includes political, economic, socio-cultural, legal and technological
factors. The internal environmental factors include such marketing resources as quality of
personnel (their skills and experience), consumers and customers of the firm, R&D
capability including the power of information management (knowledge management),
financial health (including access to funds), etc.
3. Analyse the market opportunity available for the service firm. It is a prerequisite for the
service marketer to make an opportunity analysis before venturing into a market. The
firm could be offering a new service product or expanding its existing business into a new
area or market.
Market opportunity for a service firm has two important implications:
There is a gap between demand and supply

The existing market is not satisfactorily served by existing players.
Market opportunity identification involves the analysis of the following:

Size of the market – present and potential
Marketing strategies of the competition and the depth of their value benefits

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