Definitions of managing capacity and managing demand Managing capacity refers to the way capacity is used and tailored to match variations in demand. Means for operationalizing each include: Creating Flexible Capacity Provide for additional capacity Rent facilities Manage Capacity Create flexibility in what is offered Review the hours of business Cross-train employees Managing demand, however, …
Q: In what ways can pricing capture and communicate value in services? A: Developing Pricing can capture and communicate value in a variety of ways by, for example: Making a desired service appear affordable Suggesting that what is offered is a special and limited offering with greater value than what is normally offered (Package deals …
Asset Revenue Generating Efficiency (ARGE) is an index or measure of the extent to which an organizations asset are achieving their full revenue-earning potential and yield. Ways to Evaluate Asset Revenue Generating Efficiency (ARGE) Two ways to evaluate this: By multiplying the capacity utilization rate by the yield percentage, that is the total actual revenue …
Monetary versus Non-monetary Pricing Objectives It is important that researchers understand the role that pricing objectives play in serving the attainment of business goals and objectives, as well as marketing goals and objectives. Reasons of Formulating A Pricing Strategy As illustrated in Figure, a pricing strategy is formulated with reference to several considerations: Costs to …
In addition to the costs incurred by a service organization, customers may also incur up to five types of costs in purchasing and using a service: Financial costs Time costs Physical costs Psychic costs (mental effort, negative feelings) Sensory costs (unpleasant sights, noises, smells and tastes; physical discomfort) Significance of types of costs in service …
What marketing and management challenges are raised using intermediaries in a service setting and delivery? Challenges arise from multi-site service delivery involving representatives who may not be employed directly by the originating service provider. When the provision of services is delegated or sub-contracted to external agents or representatives, maintaining control over what is provided and …
Above mentioned figure summarizes key decisions faced by management in planning and configuring the service delivery process. Essentially these may be summarized and discussed under six main headings: (i) What is involved, step by step, in delivering the core and supplementary services. Note: Shostack’s article on flowcharting or blueprinting illustrates well how this task may …
Service Delivery Place, Servicescape & Physical Evidence – Examples A service organization’s place of service delivery and the physical evidence that forms a part of this, i.e. The servicescape refers to the setting, surroundings and facilities, inclusive of furniture and furnishings, décor and lighting. All that collectively define and characterize the place of service provision. …
IT (Information Technology) is increasingly being used to facilitate service provision and in so doing to eliminate or diminish the role of customer service personnel in service encounter. The marketplace versus marketspace distinction drawn by Rayport and Sviokla provides a useful frame of reference to organize and facilitate this discussion. The respective roles played by …
Q: Explain the role and purposes of a business analysis in the process of new service product development. A: The essential role of a business analysis is to test the feasibility and viability of any proposed new service product development. Its purposes include to estimate market potential, size and likely demand to estimate the costs …
A service is essentially the act of providing for a customer some function or task that they either can’t or don’t wish to perform themselves. Understanding the concepts of Service Product Strategy Strategic Service Concept An organization’s strategic service concept defines the essential value proposition to potential customers. A fast-food restaurant or hairdressing service, for …
By drawing upon work by Levitt, Shostack, and Gronroos its identified that a service product strategy is constituted of core and supplementary elements. Furthermore, the latter classification may be sub-divided into two distinct categories: facilitating and supporting services. Core/supplementary Service Categories Examples of each are provided and discussed below in some detail under the collective …
How does Kiwi Experience attract these customers and what else could it do to increase sales? Attracting customers is so important for Kiwi Experience as they cannot rely on customers coming back. Retention of customer is very unlikely. As the case states “it is very unusual for passengers to travel on Kiwi Experience for a …
Q: How can the decision about whom to target provide a service organization with a competitive advantage? A: Competitive advantage can be grounded in and gained because of the customers that a service organization chooses to target the market because of the positioning opportunities. to define, profile, attract and appeal to customers either not served …
What is Positioning Positioning is the process of establishing and maintaining a distinctive place in a market for an organization and/or its service product offerings. This process is facilitated by asking the following questions: What is our service concept? How does it differ from competitors’ offerings? How well does it meet the needs of customers …
Target Market Target market is defined and profiled with reference to a mix of demographic, geographic, socio-economic, psychographic, and behavioral data in service organizations. Although the emphasis given to any one of these data sets may vary with circumstances, it is important to know how the nature of customers is shaped and influenced by all …
Q: Explain why it is more profitable to retain existing customer relationships than to continually try to attract new ones. Research has shown that one loyal customer tends to become more profitable over time. Apart from not having to outlay the initial costs of attracting new customers, there are four factors that create incremental profits …
Fueling the Customer Relationship Discuss the grounds for, and appropriateness of, a customer relationship marketing and management strategy in the context of Eric’s business. Eric’s case is an interesting one and is probably indicative of many in the same position as he. His business and marketplace have some of the characteristics that make it suitable …
Recent research found in a study of hairdressers that customer loyalty was predominantly to the individual hairdresser rather than the firm. The key determinants of a successful customer relationship are: Trust in Service Provider The essential aspect for any organization is customer’s trust on its brand, it plays a vital role in building customer relations …
The second strategy used for customer retention is to build switching barriers (or costs) into the service product. There are two types of switching barriers (costs): Economic Barriers – representing financial disincentives to defecting such as termination penalties and service contracts and Psychological Barriers – where valued personal relationships are broken with a change of …
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