Page 284 - DMGT510_SERVICES_MARKETING

Unit 14: Service Strategies

 An organization has to track and sketch the demand level for its services at specific time Notes
periods. If an organization maintains a customer database and a record of varying demand
levels over a period of time, this can be done with ease and accuracy.
 To match its demand and capacity, there are two options for an organization. It can either
opt to shift the demand to meet the capacity or to increase or decrease the capacity to
match the demand fluctuations.
 In order to alter capacity to match demand the firm can employ part time workers,
outsource, share facilities, rent equipments, schedule maintenance during downtime, cross
train employees, etc.

 The queuing system consists primarily of the waiting line(s) and the available number of
servers. Factors to consider with waiting lines include the line length, number of lines,
and queue discipline.

 Managing waiting lines is important aspect of service management and it can be done by
diverting customers attention while waiting, informing customers about waiting time,
encouraging them to visit during off peak period, segmenting customers, training servers
to be more user friendly, etc.

14.6 Keywords

Cash Cows: Low growth or mature industries having relatively high market shares.
Cash Crunch: SBUs not doing well vis-à-vis competitors nor is their industry growing.
Cost Leadership: Competitive strategy where service firm seeks to be a low cost producer.
Diversification: Venturing into a new market with a new product.
Divest Strategy: Dispose off a SBU from the portfolio.

Focus Strategy: When SBU concentrates entire attention on specific customer segment.
Problem Child: SBUs which have doubtful future.
SBU: Strategic Business Units.
Service Recovery: Correcting service failures occurred during entire process.

14.7 Review Questions

1. Critically analyse the BCG matrix in context to the services sector.
2. Do you think that BCG matrix was a better way to study market than GE model? Why or
why not?
3. Discuss Porter’s Model in context of Indian modern retail scenario.
4. “Growth can be achieved only with greater understanding of the service firm’s markets.”
Discuss.
5. Perform a SWOT analysis of any one service firm in hospitality industry and one banking
firm.

6. “Service Recovery means a second chance”. Comment.
7. In the education sector what are the possible capacity constraints that the service firms can
face?

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