Page 170 - DMGT510_SERVICES_MARKETING

Unit 9: Service Product and Operation

The price of their offers is lower but there is high visibility in the media. Big Bazaar, the Notes
discounter major has successfully used this strategy to make its mark.
Slow Penetration Strategy: When the market size is large, well aware of the service offer and
sensitive to price but the competitive threats are almost non-existent, this strategy is used. The
long-term objective of the service firm is to maximize sales or profits.
“Speed to market”: ICICI Bank made waves by moving in very fast with its retail banking
products. So did the grocery chain of cooperatives in superstore format Apna Bazaar. A slow
entry would enable the competitors to bring out “me too” products – and quite possibly grab a
large market share. With the capability to move in quickly, the service marketer can considerably
reduce the lead time between product conception/incubation and product introduction. This is
known as the marketer’s and/or their product’s “speed to market” factor. A necessary system
for the service marketer to speedily consolidating his entry includes information integration,
cohesiveness and synchronization of all management functions.

Growth

It is obvious that the Growth stage is a battleground for survival. It does begin with a highly
optimistic ‘Take Off’ but ends with a bloodbath of ‘Shake Out’ with only the fittest surviving.
The competition has got a chance to survive the shake out if they don’t just copy the original but
add innovative features themselves, attracting more customers and helping to enlarge the market
base. With the market growing in size, all players could be accommodated and price war, in
actuality a poison pill of a solution, avoided.
This is what happened with the cell phone service operators in the latter part of the nineties. But
if the market does not grow or there is more number of players than the market can accommodate,
then price war is inevitable, discounting becoming the norm and value being given the short
shrift. Two service sectors that saw brutal haemorrhaging in India are travel and time- sharing.
Travel agents, airlines and even stock brokers and insurance agents not only chose to undercut
but resort to such unhealthy (was it also unethical?) practices as giving back customers a part of
their commissions. Time-share marketers that have had their obituaries in print are Dalmia
Resorts, Sterling Resorts, etc.
After achieving optimum awareness of the service offer, the marketer should go all out in
developing customers, increasing service delivery capability to keep up with demand, increasing
access and making distribution effective. This will enhance the brand value of the offer, which
will become an important asset during the inevitable maturity phase of the life cycle. The
advertising as a communication tool should explain the offer, emphasize its features and image
and create favourable attitudes.

Example: Shoppers’ Stop the early mover in organized, up-market retailing used its
advertising effectively to change attitudes and build its image, stressing on the shopping
experience, parking and valet features, and the international brands availability.

Any sluggish response by the marketer and the inevitable inability to meet supply and demand
might result in lost opportunities and poor customer retention. Increasing the market share
should be an important objective of the service firm, bearing in mind the evolving competition.
At the end of the growth phase, it can sacrifice short-term profits by using reduced price to lure
price-conscious customers.

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