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Unit 14: Service Strategies
Introduction Notes
The service firm has some major issues which are to be tackled by the management and the
marketers. Due to the intangibility of services it is very difficult to make a competitive strategy
for the services. Different people attach different attributes to a service and evaluate the service
differently. Due to the variability factor, the services cant be standardised which makes it even
more difficult to decide on one strategy. A service marketer should always keep in mind the
requirements of the customers while deciding on any single strategy because the requirements
of every single customer vary.
It is also very important and difficult to manage the demand and supply constraints. Demand is
a variable which depends on a variety of factors and service firm has this challenge of matching
its capacity to demand. They sometimes also try to influence the demand variable to match their
own capacity. With low capacity and high demand also comes, the problem of waiting lines.
This is one area where the service firm loses most of its customers. Customers hate to wait in
lines. Now with the availability of many options and substitutes, customers have become more
impatient. Managing waiting lines is also a big challenge for the service firms.
In this unit, you will learn the competitive service strategies, recovery strategies, how demand,
supply, productivity and waiting lines are managed.
14.1 Competitive Marketing Strategy
A service firm with multiple goods and service offers needs to make separate strategic plans for
each business proposition and each market in which it competes.
Example: HDFC the home finance will have different strategic plans when compared to
the retail banking strategies of HDFC that has now merged with its parent company, HDFC
Bank or its insurance ventures HDFC Standard Life and HDFC Chubb.
Then there would be requirement of strategic plans for different functions like marketing,
human resource, finance etc. Thus HDFC Group (which includes home finance, retail bank, life
and general insurance) or the ICICI Group (which includes the universal bank with all its
different divisions of institutional, retail, home and consumer finance, etc., life and general
insurance, informational technology, etc.) can have strategic plans at three levels:
1. Corporate level strategic planning: The service organization has a clutch of SBUs, and the
planning affects the fortunes of all of them. The focus is to integrate the strategies of the
individual SBUs to conform to the groups goals.
Example: Ratan Tata and his board of directors at Tata Sons makes the decision that the
Tata Group would focus on infrastructure, steel, automobiles, telecommunication, information
technology, hospitality, tea and chemicals. The decision to exit from FMCG (TOMCO, Lakme),
liquor and office products (Forbes, Forbes & Campbell) etc., were made at this level.
2. Business-unit level strategic planning: Decisions that affect an individual SBU as a whole
are taken at this level. Thus, the decision for Taj Hotels, if ever so taken, to grow by
acquisition and not just by organic means will be taken at this level.
3. Functional-level strategic planning: This will affect the different functions of an SBU.
There are some models which are often used for making marketing strategy. We will discuss
them one by one in subsequent subsections.
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