Page 30 - DMGT510_SERVICES_MARKETING

Unit 2: Service Marketing Environment

point of expansion) or trough (minimum point of contraction) to the next. A business cycle Notes
consists of the following:
Recession

Recovery

Growth

Decline

Some businesses cycles have lasted for 100 months while others have lasted for as little as
28 months. Recessions have also varied in their intensities; those which have hardly been noticed
are called as slowdowns and those which have had deep impact on the economy are known as
depressions as witnessed by the United States from 1929 to 1939.

Service managers are keen to develop the ability to forecast the duration and intensity of
recession. Obviously this would aid their strategy and other plan outlays.
The Indian economy has been suffering under the grand delusions of the early planners. Having
suffered too long under the British rule, they had a grand vision for the nation and turned all
aspects of plans to the development of a command economy. They naïvely thought that a
nation’s economy was controllable to the extent of grand projects, and centralized orientations.
This robbed people of their entrepreneurial skills and made them look up to the government for
each and every initiative.

2.1.4 Political Factors

Politics is the science of government. The governmental influence has been omnipresent and
service firms have been greatly affected by the policies and other decisions made at the Central,
State or local level. The Japanese have made a virtue of deriving ‘political advantage’ from a
stable and constructive relationship that makes government and management allies in the
battle for global competitiveness.
In India, socialism was the dominant political mantra and to a great extent prevented many
service sectors from blooming. This resulted in the forever talked ‘boom’ being just that: forever-
talked. India is a case study of lost and missed opportunities – in science, humanities, town
planning, sports, political alignments and also services.
Soon after Independence, India set about taking the destiny of the nation to a utopian dream.
Like all such dreams (communism, Marxism, ‘pure race’ of Hitler, etc.), it ended with missing
the wood for the trees. Focusing on the ‘command economy’ drivers made the government the
biggest employer, a monopoly in many sectors, created a Frankensteinian monster in the gigantic
bureaucracy, and successfully sapped the entrepreneurial instinct of the nation. The bureaucracy
completed what the British had started. The service entrepreneur found himself bound hand and
foot within the labyrinth of forms, rules, regulations and tight cash flow.

2.1.5 Technological Factors

Some technological developments which affected services:
Universal Product Code

Credit cards technology

Electronic Data Capture

Quick Response Inventory Management System


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