Strategies for Managing Capacity and Demand

Strategies for Managing Capacity and Demand

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 operationalising 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, …

Developing Pricing Strategy Questions & Answers

Developing Pricing Strategy Questions & Answers

Q:  In what ways can price capture and communicate value in services? A:  Developing Price 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 …

Define Yield Management and Ways to maximize ARGE in Service Firms

Define Yield Management and Ways to maximize ARGE in Service Firms

Yield Management defined Managing yield is essentially concerned with obtaining the best possible yield or return from every available unit of capacity to be sold. And with ensuring that some return is obtained from perishable capacity units rather than nothing at all.  It is a means by which the downside of the perishability characteristic of …

Monetary versus Non-monetary Pricing Objectives

Monetary versus Non-monetary Pricing Objectives

Monetary Pricing Objectives Above table illustrates and explains three basic categories of pricing objectives: Revenue-oriented Operations-oriented Patronage-oriented Revenue-oriented pricing objectives Revenue-oriented pricing objectives, which must be based on a clear understanding of fixed, variable and semi-variable costs, have the purpose of covering costs, increasing sales and revenue, and optimizing profit. Operations-oriented pricing objectives Operations-oriented pricing …

Understanding the Foundations of Pricing Strategy

Understanding the Foundations of Pricing Strategy

As illustrated in Figure, a pricing strategy is formulated with reference to several considerations: Costs to the marketer Value to the customer Competitive prices Legal and ethical considerations Market acceptance Companies aiming to make a profit must recover the costs associated with producing and marketing their services, and also provide for a sufficient margin to …

Service Delivery Review Questions and Answers

Service Delivery Review Questions and Answers

What marketing and management challenges are raised using intermediaries in a service setting? 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 how can …

The Process & Determinants of Effective Service Delivery

The Process & Determinants of Effective Service Delivery

Below 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: What is involved, step by step, in delivering the core and supplementary services. The extent of delegation or out-sourcing required in order to deliver supplementary services The location …

The Place of Service Delivery and Its Physical Evidence

The Place of Service Delivery and Its Physical Evidence

Introducing Servicescape 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, that collectively define and characterize the place of service provision. This servicescape also serves to set the tone …

The Impact of Information Technology on Services

The Impact of Information Technology on Services

Technology in service industry Technology is increasingly being used to facilitate service provision and, in so doing, to eliminate or diminish the role of customer service personnel in the service encounter.  The marketplace versus marketspace distinction drawn by Rayport and Sviokla provides a useful frame of reference to organise and facilitate this discussion.  The respective …

Developing and implementing a Service Product Strategy

Developing and implementing a Service Product Strategy

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 …

Developing a Service Product Strategy Exercise Answers

Developing a Service Product Strategy Exercise Answers

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 …

Developing a Service Product Positioning Strategy

Developing a Service Product Positioning Strategy

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 …

Defining Target Market & Its Importance to Service Organizations

Defining Target Market & Its Importance to Service Organizations

Defining Target Market Target markets are 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 …

Target Market and Positioning Exercise Answers

Target Market and Positioning Exercise Answers

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 opportunities; to define, profile, attract and appeal to customers either not served or …