Module 6
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This document discusses managing demand and capacity for services marketing. It covers understanding demand patterns, evaluating strategies to match capacity and demand, and discussing waiting line strategies. Specifically, it examines capacity constraints and demand patterns, strategies for shifting demand or flexing capacity to match demand, the nature of demand relative to supply and capacity constraints, and issues and strategies for waiting lines. The document is authored by Prof. Prasad Kulkarni of Gogte Institute of Technology in Belgaum for an MBA course on services marketing.
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Services marketing module 1
This document outlines a module on services marketing from the Gogte Institute of Technology in Belgaum, India. It discusses the objectives of studying services marketing, which include analyzing India's growing services sector and understanding key concepts like the service marketing triangle and GAP model. The document also examines the differences between goods and services, characteristics of services, factors driving growth in the Indian services industry, and challenges faced in services marketing.
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Module 6
- 1. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Services Marketing Module 6 Managing Demand and Capacity According to VTU syllabus, Services Marketing 12MBA MM 314
- 2. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Objectives After studying this module you will be able to 1. Understand demand patterns. 2. Evaluate strategies and tools used for matching capacity and demand. 3. Discuss waiting line strategies.
- 3. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Understanding Capacity Constraints and Demand Patterns Time, labor, equipment and facilities Optimal versus maximal use of capacity • Charting demand patterns • Predictable cycles • Random demand fluctuations • Demand patterns by market segment Capacity Constraints Demand Patterns
- 4. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Strategies for Shifting Demand to Match Capacity Use signage to communicate busy days and times Offer incentives to customers for usage during non-peak times Take care of loyal or regular customers first Advertise peak usage times and benefits of non-peak use Charge full price for the service--no discounts • Use sales and advertising to increase business from current market segments • Modify the service offering to appeal to new market segments • Offer discounts or price reductions • Modify hours of operation • Bring the service to the customer Demand Too High Demand Too LowShift Demand
- 5. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Strategies for Flexing Capacity to Match Demand Stretch time, labor, facilities and equipment Cross-train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outsource activities • Perform maintenance renovations • Schedule vacations • Schedule employee training • Lay off employees Demand Too High Demand Too LowFlex Capacity
- 6. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. What is the Nature of Demand Relative to Supply? Extent of demand fluctuations over time Extent to which supply is constrained Wide Narrow Peak demand can usually be met without a major delay 1 Electricity Natural gas Telephone Hospital maternity unit Police and fire emergencies 2 Insurance Legal services Banking Laundry and dry cleaning Peak demand regularly exceeds capacity 4 Accounting and tax preparation Passenger transportation Hotels and motels Restaurants Theaters 3 Services similar to those in 2 but which have insufficient capacity for their base level of business
- 7. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. What is the Constraint on Capacity? Nature of the constraint Type of service Time Legal Consulting Accounting Medical Labor Law firm Accounting firm Consulting firm Health clinic Equipment Delivery services Telecommunication Utilities Health club Facilities Hotels Restaurants Hospitals Airlines Schools Theaters Churches
- 8. MBA@GIT http://www.mba.git.edu. © Prof. Prasad Kulkarni, Gogte Institute of Technology, Belgaum. pvkulkarni@git.edu. Waiting Line Issues and Strategies unoccupied time feels longer preprocess waits feel longer anxiety makes waits seem longer uncertain waits seem longer than finite waits unexplained waits seem longer unfair waits feel longer longer waits are more acceptable for “valuable” services solo waits feel longer