Marketing In Services
1. What are the objectives of pricing?
What price point should you set for your products and services? This important and common
question can better be answered by determining company objectives. Several common
company objectives are:

Survival

Maximize current profits

Increase market share

“Skim” the market

Seek “product-quality leadership”
Survival:
Companies facing new and intense competition, over capacity, or changing consumer behavior
may pursue a survival strategy. Survival is clearly a short run objective to make it through tough
times. As long as price exceeds variable costs and covers some fixed costs, the company can
carry on. In the long run, the company must adapt and find ways to add value.
Maximize current profits:
Maximizing current profit is a common company objective. To do so, costs and consumer
demand have to be estimated for different prices. The price point that generates the highest
profit is then chosen. In practice, it's not always easy to estimate demand accurately (we
discuss ways to do this in our article about determining demand and calculating costs).
Additionally, focusing on current profits may mean reducing long run company performance.
Increase market share: A company may pursue an objective of increasing or maximizing market
share. This makes sense especially if a company feels it can achieve lower unit costs with
higher volumes, thereby increasing long-term profit. Many companies set a low initial price to
achieve market penetration. This strategy can be advantageous in industries with consumers
that are price sensitive, sales and production costs fall with production experience, and where a
low price discourages the entry of possible competitors.
Skim the market:
“Skimming” means setting high prices initially to target those that are willing to pay the high
price, and then gradually lowering the price to attract the more price sensitive customers. Video
game and other software producers often use this strategy. Die-hard fans are willing to pay the
higher initial price, and as sales decline, the company reduces the price for more casual users.
Intel is another prime example a company that successfully uses price skimming. It's latest
computer chips are sold to those who can't wait for well over $1000 initially. A year later, the
price drops and there is a new and more powerful $1000+ chip released.
Product-quality leadership:
Companies that produce high quality products relative to the competition often try to position
themselves as the product-quality leader. They charge more, but convince the customer that
it'sworth it because of the superior product experience, reliability, or other quality related
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benefits. Price sensitive customers need to be convinced that the higher price is worth it in the
long run.
The main point is that using price as a strategic tool is better than simply letting costs determine
price. If your product is superior to the competition, you'll be more profitable if you convey that to
the market and charge a higher price.
2. Give the meaning of Hotel? What are the facilities provided by hotel?
Hotels offer various types of lodging accommodations to travelers, whether for a few nights, for
extended stays, or for resorts where guests stay specifically to enjoy certain facilities such as
golf courses and live entertainment. Limited-service hotels generally provide rooms and daily
housekeeping services, while larger hotels typically offer additional amenities such as room and
valet service. Hotels often generate additional income from offering the use of other facilities to
guests and the public.
Meeting and Conference Facilities

Larger hotels typically have meeting rooms and conference facilities that can be reserved
by overnight guests as well as the public. The meeting and conference rooms can be set
up to meet the needs of the function being given, such as training seminars, award
ceremonies, business meetings and luncheons. If attendees are traveling from long
distances to attend the function, having it inside of a hotel makes it convenient for them
to stay overnight before journeying back home. Some hotels have ongoing contracts with
companies and organizations that utilize the meeting facilities regularly, such as for
board member meetings or religious services.
Banquet and Reception Facilities

Banquet and reception hotel facilities can provide adequate room and an ideal setting
for wedding receptions, proms, dinner and birthday parties. In addition to spacious
rooms, hotels with these services usually offer plenty of parking spaces as well. Hotels
offer catering, along with a wait service, to serve food to individual tables, or to give the
option of having a buffet-style set-up. Some hotels also have restaurants where guests
can have breakfast, lunch and dinner as well as host smaller parties if they choose.
Pool, Spa and Fitness Facilities

Many hotels contain amenities to keep guests entertained, pampered or relaxed during
their stay. People who enjoy swimming or lounging by the side of the pool can do so at
hotels that offer outdoor and/or indoor pools. Some hotels also have saunas and hot
tubs as well. Hotel facilities may include fitness rooms where guests can work out on
exercise machines such as treadmills and stationery bicycles. Those hotels featuring a
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spa may offer services such as massages, facials, manicures and pedicures, while others
may contain a hair salon and barbershop.
Laundry Facilities

Another facility offered by many hotels is the on-site laundry room. Washers and dryers
are available to guests for washing their clothes and some hotels offer this service for
free or have coin-operated appliances installed. Some laundry facilities also have
televisions, vending machines and provide washing detergent for guests to purchase.
Services like this can help travelers pack lighter bags, especially during extended stays.
3. How do you segment the market for tourism industry?
identifying tourism customers and deciding on how to meet their wants and needs”
MARKET SEGMENTATION:
“the process through which potential customers with similar needs and characteristics are
grouped together so that a tourism organization can apply marketing strategies for the
selected market segment efficiently”
WHY MARKET IS SEGMENTED:
 Travel market is too large to reach efficiently
 Travel market is to diverse to communicate
 Breaking up the market will make it easier to manage
IDENTIFYING MARKET SEGMENTATION:
 WHO – who are in the market segment that we would like to have?
 WHAT – what are their requirements?
 WHEN –when do we promote to our market segment?
 WHERE –where do we promote the product? Through which distribution channel?
 HOW – how do we develop marketing strategies to reach the market?

BENEFITS OF MARKET SEGMENTATION:
 Understand the needs and wants of customers
 Allocate marketing expenses efficiently
 Further develop products or services
 Develop marketing strategies more precisely
WAYS TO SEGMENT THE MARKET:
 Location of residence
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 Demographics
 Equipment ownership
 Important product attributes
 Lifestyle attributes
CRITERIA USED FOR DIVIDING MARKET SEGMENTS:
Geographic Segmentation:
grouping potential customers based on their location; oldest and simplest basis for
market segmentation
Psychographic Segmentation:
grouping on how they live, their priorities, their opinions, their attitudes and their
interests
Personality – introvert/extrovert, cognition, innovativeness
Demographic Segmentation:
gender, age, ethnicity, occupation, educational level, income, household size and family
situation
Socio-Cultural Segmentation:
religion, social class, family lifestyle, status
Product-Related Segmentation:
benefits people seek in the good or service, the amount of good or service used and
degree of company loyalty
MARKET SEGMENTATION DECISION PROCESS
 Select segmentation approach
 Create detailed profile of segment
 Forecast market potential of each segment
 Estimate likely market share of each segment
 Decide which segment to target and design appropriate marketing mix
SPECIALIZED TOURIST SEGMENTS
1. Business and Professional Travelers -backbone/bread and butter
2. Incentive Travelers
3. SMERF Groups -Social, Military, Education, Religion and Fraternal
4. Mature Travelers
5. Special-Interest Travelers
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MEASURES FOR TOURIST SATISFACTION:
SATISFACTION EQUATION
Actual Service > Expectations =
Actual Service = Expectations =
Actual Service < Expectations =
4 Explain the role of Publicity in present Business World?
Advertising :According to some people advertisement is the printed salesmanship which makes the goods
popular. In other word we can say that advertising is a technique of influencing the minds of the
public to buy the goods advertised. It is a powerful art of attracting the customers for a particular
goods. Advertising makes the commodity popular among the people through the use of media
like newspapers, radio, t.v. and sign boards. It attracts the people and creates demand for the
product.
Advantages or Functions or Importance of Advertising :Today in the modern business advertising is playing very effective role. It is used as too of
marketing. The expenditure on advertising is considered as a profitable investment.
Following are the main advantages of advertising :
1. Increases Sale :Advertising is very useful in creating the demand and increasing the sale. As the sale of any
commodity increases, its production also increases.
2. Provides Employment :In the advertising industry thousands people are employed. On the other hand when the sale of
the goods increases, new factories are established and rate of employment increases.
3. Save Time :Advertising enables the consumer to select the commodity according to his requirement within
no time. Because he has been already informed about the standard of various goods through
advertising.
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4. Introduces New Products :New products can be introduced in the market within short time through advertisement.
5. Establishes Goodwill :Advertising establishes reputation and goodwill of the firm.
6. Encourages Competition :Advertising encourages competition among the producers. So competitors in the quality and
price of the product.
7. Reduces Cost :Advertising increases the sale and encourages the produce the goods on large scale. Due to
large scale economies cost of production reduces.
8. Changes the Living Standard :Advertising brings greater change in the habits attitudes and standard of living of the public.
9. Increases Profit :Advertising increases the sale and total profit of the producer. Due t this we say that advertising
is a profitable investment.
10. Advantage to the Consumer :Advertising supplies up to date information about the competition products and their qualities.
11. Educative Value :Advertising teaches the people the benefits of savings. It also creates the sense of responsibility
among the people. For example to increase the savings in the country and to control the
population growth advertising has played very effective role.
12. Direct Sale :Through advertising producer is also introduced direct in the market. People may purchase the
goods directly from the producer and can save money.
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13. Makes the Job Easy for Salesman :Advertising makes the salesman job easier. There is no need of explaining the qualities of a
product to consumer. Through advertising customer is already well informed. So a salesman
can sell the product without any effort.
Disadvantages of Advertising :There are also some demerits of advertising like economic waste. Due to expenditure on
publicity the cost of production increases and it is beard by the consumer ultimately. Another
disadvantage is that it restricts the competition and creates monopoly. It is also argued that
advertising , creates frustration among the poor people. Sometimes advertisers also misguide
the public. So there are the few disadvantages of advertising.
CONCLUSION :- After a long discussion we can say that it is a universal truth that advertising
has played very effective role in expanding the market
5. Briefly Explain Marketing mix in service?
Product
As the product is the item being sold to the customer, the thing that will bring in money, its
features and design need careful consideration. Whether the firm is manufacturing the product
or purchasing the product for resale, they need to determine what product features will appeal to
their target market. When an organisation is considering introducing a product into a market,
they should ask themselves the following questions:
Who is the product aimed at
What benefit will customers expect from it
What will be its advantage over competitor products? Or its unique selling point?
How does the firm plan to Position the product within the market?
The answers to these questions will help a firm design, package and add value to its products.
To learn more about product strategies within the marketing mix click on the following link:
Marketing Mix and Product strategies
Price
There are lots of different pricing strategies but every strategy must cover at least your costs
unless the price is being used to attract customers to the business (loss leader pricing). A
product is only worth as much as people are prepared to pay for it. The amout your target
market are prepared to pay for your products/services depends on product features and the
target market's budget. You will also need to consider competitor pricing and factors within your
marketing environment. Effective pricing involves balancing several factors, to find out more
about pricing including example pricing strategies click here.
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Place
The Place element of the marketing place is about where the product is made, where is it stored
and how is it transported to the customer. The place for each of these things should ensure that
the product gets to the right place at the right time without damage or loss. The ideal place will
be
Convenient for the customer and the business
Accessible for the customer if it is the place where the product is sold
Low cost or free for the customer if it is the place where the product is sold
Reasonable cost to the business
Promotion
A successful product or service means nothing unless the benefit of such a service can be
communicated clearly to the target market. Promotion is any activity to raise awareness of a
product or to encourage customers to purchase a product. Advertising is a form of promotion
but not all promotions are advertisements.
Promotional activities for consumer sales will be different to promotional activities for business
to business sales. The following things will influence how a firm chooses to promote its product:
Promotional campaign purpose
The budget for the promotional campaign
Legal rules about what you can promote and how
The target market for the product
The marketing environment in which the firm operates
Other Marketing Mix Links
Service Marketing Mix:
The ideal marketing strategy for a firm selling services, includes the traditional marketing mix
and three additional elements: people, process and physical evidence. Click on the attached link
to learn more about the 7Ps: Service Marketing Mix
E-Marketing Mix: A massive increase in internet sales has changed the way the marketing mix
is implemented by firms. The following link will take you to an article explaining how the
marketing mix can be used for online marketing Marketing Mix and The Internet
Environmental Marketing Mix.
An increased focus on environmental issues, has contributed to a rise in the demand for
environmentally friendly products and services. The spotlight on sustaining the environment has
created new terminology such as “carbon footprint” and “offsetting”. Many organisations have
adapted their marketing strategies to capitalise on the consumer appetite for Environmentally
Friendly Products. Click on this link to read more about how the marketing mix can be used to
market environmentally friendly products and
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6. What are the difference promotional Techniques Explain?
A company can employ various promotional techniques in order to communicate with the target
market, techniques that form the promotional mix.
Depending on the communication means, the promotional techniques can be:
Direct (personal) communication techniques – focused on creating a relationship with each
client (personal sales, direct marketing)
Indirect (non- personal) communication techniques – based on mass communication, the
message in identical for a high number of potential customers ( advertising, public relations,
sales promotion
Following, the main promotional techniques used by companies:
Advertising
Is a form of promoting the products, services and image of a company that is addressed to large
numbers of consumers, using the mass media. Depending on the financing, there are:
Free advertising – is an informative communication that doesn't have a sponsor. Focuses on
reporting news or information concerning a company, using mass media (press conferences,
press releases)
Advertising – is paid by a sponsor, that is usually the company producing the promoted goods.
Its main characteristics are:
It's a paid promotion technique
The target market is scattered territorially
The message is transmitted using mass media
Is a non-personal communication technique
The company paying for the advertising is usually identified in the content of the message.
Public relations
Are a deliberate and planned effort of a company to communicate to various public categories
that might have an interest in the company's activities (customers, investors, employees). The
purpose of this in creating a favorable image and a trust climate based on convenient mutual
relations. Public relations use various communication channels, from personal channels to mass
media. The differences between public relations and advertising are:
Public relations use informative messages (company achievements, annual reports, balance
sheets)
Advertising calls to immediate action while public relations try to build trust
Public relations actions are unique, while advertising can be repeated
Public relations can be achieved also through public dialogue.
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Sales promotion
Uses a wide variety of instruments meant to lead the customer to an immediate action regarding
the purchase of a good or service. The main characteristics of sales promotions are:
Offer an immediate advantage – a price discount, a higher quantity at the same price, a free
service, a contest.
Are exceptional – the advantage is not permanent, is available for only a period of time
Call to immediate action – the fact that the offer is limited is highlited
Cause regrets – if the customer doesn't purchase the product.
All these are communicated in the message that joins the campaign.
The main sale promotion techniques are:
Price discounts
Offering a larger amount of the product at the same price
Group sales
Gifts
Loyalty gifts
Samples
Games, contests, raffles.
Point-of-sale promotions
Involve the usage of product display techniques, also supported by various audio-video
materials, that stimulate the purchasing process of the people visiting the sale point. Even if the
point-of-sale promotion is usually employed by detail sellers, it also has a wider application.
Actually, each company subsidiary can be provided with materials that inform the customer
about the products and services he can purchase in that place. These materials include:
Lightboxes
Banners
Posters
Product display shelves
Specific lighting
Point-of-sale atmosphere
Audio-video messages
Promotional gifts (pens, lighters, bags, products printed with the company brand)
Direct marketing
Is an interactive communication system with each consumer, using a distance communication
mean: catalogs, personal letters, electronic catalogs. The interactivity consists in the option the
receiver has to order the product from the catalog, and have it delivered at home.
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Personal sales
Involve the direct contact between a salesperson and a customer, usually at the customer's
residence or in public places. The selling process is joined by promotional messages focused
on the advantages offered by the product.
Promotional gifts
Are small presents printed with the company logo or product name, offered to the customer in
order to remind him of the product. For example: pens, lighters, ashtrays, agendas.
Internet promotion
Consists in communication using web sites that will create the virtual company image, present
the products, include press releases. The most used Internet advertising means are: banners,
pop-ups, newsletters, link to the company website.
7. Explain Service marketing mix in Hospitality organization?
PRODUCT
A product is a set of attributes assembled in an identifiable form. The product is the central
component of any marketing mix. The product component of the marketing mix deals with
a variety of issues relating to development, presentation and management of the product
which is to be offered to the market place. It covers issues such as service package, core
services and peripherals, managing service offering and developing service offering.
Hospitals today offer the following services:
1. Emergency services – Emergency services and care at most of the hospitals is unique
and advanced. The hospitals have state-of-the-art ambulances. The CCU's on Wheels
under supervision by medical and para-medical staff. There is hi-tech telecommunication
available to a patient in an emergency at any given time.
2. Ambulance services – Hi-tech ambulances linked by state-of-the-art
telecommunications are fully equipped with doctors that are available to render medical
attention and assistance in case of emergencies at the patient's doorstep.
3. Diagnostic services – Modern Hospitals are multi-speiality and multi-disciplinary, that
can handle any kind of ailment, they offer a wide range of facilities for instance, Oncology,
Orthopedics, Neurology, Plastic surgery and so on.
4. Pharmacy services – Most of the hospitals also have a pharmacy which is open 24
hours. It caters to the needs not only of the inpatients and outpatients, but also patients
from other hospitals who require emergency drugs.
5. Causality services – Causality service includes a 24 hrs. causality department, which
attends to the accident or emergency cases.
Apart from the above mentioned services, hospital also offers "Health Diagnosis
Programme" which is a complete, comprehensive, periodic health check up offered for busy
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executives, professionals, business persons and so on. The health diagnosis programme
comprises of the following:
1. Master health check up
2. Executive Health check up
3. Diabetics health check ups etc.,
Generally, the service offering in a hospital comprises of the following levels:
1. Core level – it comprises of the basic treatment facilities and services offered by the
hospital like diagnostic services, emergency services, casuality services etc.
2. Expected level – it comprises of cleanliness and hygiene levels maintained in the hospital.
3. Augmented level – it comprises of dress code for staff, air conditioning of the hospital,
use of state of art technology, services of renowned consultants.
PRICE
It is one of the most prominent elements in the marketing mix. Price charged must be able
to target customers and it should co-ordinate with other elements of the marketing mix.
Price usually depends on treatment prescribed by the respective consultants and the
facilities offered to the patient.
As a service is intangible, it is very hard for deciding the price of the particular service
offered. Pricing strategy adopted does not depend on the price offered by competitors. The
pricing strategy is formulated after consulting the concerned heads of department. Prices of
various facilities revised every year depending on the change in technology. Before fixing
prices, government controls are also taken into consideration.
On admission, an initial deposit will be collected at the inpatient billing counter. The
amount extends on the category of room and the treatment or surgical procedure planned.
Various categories of rooms, ranging from the general ward which attends to the needs of
the lower classes to the deluxe suite which attends to the needs of the middle and upper
classes are available.
A hospital does not believe in profit maximization, it aims at providing quality service for its
customers at reasonable price.
PROMOTION
Promotion function of any service organization involves the transmission of message to
present, past and potential customers. Customers need to be made aware of the existence
of the service offered. Promotion includes advertising, personal selling, sales promotion and
publicity.
Hospitals do not normally undertake aggressive promotion, they rely a lot on a favourable
word of mouth. To crease the clientele, a hospital may continuously introduce different
health services like the accupressure clinic, master health programmes and diabetes health
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checkups apart from annual health checkups offered to different companies. (Corporate
clients)
Hospitals conduct camps in rural areas to give medical check ups at a reasonable price so
that the rural people approach the hospital again in the future. They also sponsor frequent
visits to the spastic society, old age homes, etc. Hospitals generally advertise in health and
fitness magazines.
PLACE
It refers to contact point between the customer and the service provider, who gets the
benefit of the service. This element in the marketing mix leads to the identification of a
suitable location.
The two major issues considered regarding the decision of a place are accessibility and
availability of the service to customers. Accessibility refers to the ease and convenience
with which a service can be purchased, used or received. Availability refers to the extent to
which a service is obtainable or capable of being purchased, used and received.
Factors influencing the placing decision are market size and structure by geographical
regions, number and types of competitors in the region, location of potentially attractive
consumer segments, local infrastructure, good road access facilities and public
transportation network. A hospital must be ideally located and must be easily accessible to
all.
PEOPLE
The People component reflects the important role played by individuals in the provision of
services. People are also an important element in the marketing mix.
Service personnel play an important role in an organization which offers service. The
behaviour and attitude of the personnel offering service will influence the customer's overall
perception of the service. Customers are a source of influencing other customers by word
of mouth.
It is necessary that the staff in hospital are trained to offer quality patient care with human
touch using state of the art technology.
The objective of offering quality service to the patients can be attained by:
o
o
o
o
Motivating employees to be efficient, dedicated and loyal to the organization.
Offering regular on-job training of employees to ensure continuous
improvement in health care.
Utilizing services of professional competent medical consultants.
Use of latest technology.
Motivation is not necessarily by giving high salaries. There are many other ways to
motivate the employees. Concessions should be given to the employee's near ones. There
should be regular liaison with them at all times. Knowing what the employees want is very
important. There should be active participation of the employees in the activities of the
hospital.
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In a hotel, where the clientele is happy, free from any kind of tension, the job of the staff
becomes much easier, whereas in a hospital, the staff has to cater to the needs of sick,
depressed and an agitated lot. Warm ambiences with efficient and cheerful staff help make
the experience of the public a memorable one. Therefore, it is very important that the staff
of the hospital is friendly and comforting, always wearing a smile.
PROCESS
Process is a set of activities that take an input, convert it and add value to the input and
finally create an output. Process has only recently been given much attention in the service
sector although it has been the subject to study in manufacturing for many years.
Processes are designed by blue a print, which sets a standard for action to take place and to
implement the service.
8. What are the challenges faced by service manager in marketing service?
The twelve challenges facing service managers are:
1.
Managing multiple customers
2.
Understanding the service
3.
Managing outcome and experience
4.
Managing the customer
5.
Understanding the customer experience
6.
Managing in real time
7.
Coordinating different parts of the organisation
8.
Understanding the relationships between operations decisions
9.
Knowing, implementing and influencing strategy
10.
Continually improving the operation
11.
Encouraging innovation
12.
Managing short-term and long-term issues
Managing Multiple Customers:
One of the features of service is its heterogeneity. This means managers deal with customer
difference.
Example: Imagine a typical university classroom and the range of students with different
experiences and knowledge of the topic in a single class. Ensuring minimum standards for entry
is one way to manage this heterogeneity.
A major issue for managers managing multiple customers is managing quality.
Understanding the service:
Sometimes managers can struggle to understand the basic proposition of their own
business. This is not as unusual as you might think, especially in complex services. Also
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in public and local government services that are being asked to shift their performance
measures by governments.
For instance, what is it that health services actually 'sell'? For many the proposition that
health service is a business is an ethical dilemma.
Pondering this question makes it clear that questions about what a service delivers can
be political, ethical and economic.
In elaboration, how would you measure the performance outcome of a hospital? Bed
turnover? Dollars spent? Success of disease prevention interventions? Another
example is the issue of state housing.
Managing outcome and experience:
This challenge is also because of a feature of services - their intangibility.
Because of intangibility services can have unclear boundaries.
One major challenge then is to manage this intangibility.
One common technique managers use to manage intangibility in the customer service
interaction is through the use of scripts. Scripts are roles and words that customer
service representatives are asked to perform and conform to when engaging with the
customer. Scripts can range from the very strict "Would you like fries with that?" script at
McDonald's, to a loose professional script engaged with by doctors.
Managing the customer:
In service customers are seen as part of the service production process.
Managers therefore have to consider carefully how much self-service to introduce.
Another challenge for managers is managing how customers impact on other
customers, for instance if customers behave badly.
A further issue is service-scape design. Well designed service-scapes (e.g. at an
airport) can encourage the right sort of behaviour and 'flow ' through the service
process.
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Understanding the customer experience :
Sometimes managers can struggle to understand the basic proposition of their own business. This is not
as unusual as you might think, especially in complex services. Also in public and local government
services that are being asked to shift their performance measures by governments.
For instance, what is it that health services actually 'sell'? For many the proposition that health service is
a business is an ethical dilemma.
Pondering this question makes it clear that questions about what a service delivers can be political,
ethical and economic.
In elaboration, how would you measure the performance outcome of a hospital? Bed turnover? Dollars
spent? Success of disease prevention interventions? Another example is the issue of state housing.
Managing in real time:
In service there is no inventory. A service is produced as it is consumed, and a service
that is not consumed when it is available (e.g. a hotel bed) is wasted. Consequently
management challenges include managing supply and demand.
Another issue is the need to resolve issues immediately; a customer service interaction
that goes wrong cannot be sent to the factory to get fixed.
There is no rewind and redo in service delivery; the challenge is to do things right the
first time all the time.
Coordinating different parts of the organization:
A service process unfolds in time and space. From a customer's perspective the
experience should flow clearly and without unnecessary waiting for an optimal
experience.
The challenge for managers is to ensure all parts of the organisation coordinate
together to deliver the experience required. Management challenges are with logistics,
service flow and with ensuring staff deliver consistent experiences.
Understanding the relationships between operations decisions:
A service process unfolds in time and space. From a customer's perspective the experience should flow
clearly and without unnecessary waiting for an optimal experience.
The challenge for managers is to ensure all parts of the organisation coordinate together to deliver the
experience required. Management challenges are with logistics, service flow and with ensuring staff
deliver consistent experiences.
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Knowing, implementing and influencing strategy:
Managers make many decisions about the introduction of new technology and other service innovations,
whether they be incremental or radical.
Operational decisions require careful fore-thought about impacts on success factors.
For instance the introduction of a webcam into a pre-school may be perceived as a welcome innovation
by some parents, but may also make staff feel exposed and many other parents may not want this
intrusion into their children' lives.
Continually improving the operation:
Within service operations the development of culture is a significant issue. Because services are
intangible, services tend to rely on symbolic communication, the instilling of core values and brand
images to communicate service meaning.
For service managers the challenge is to develop service cultures that incorporate learning and instill
cultures of continuous quality improvement throughout the system. Examples are McDonalds and Les
Mills.
Encouraging innovation :
Managers need to encourage cultures of innovation at the same time as they try to maintain tight control
of processes and give employees enough autonomy to make their work meaningful.
Using experimental service facilities is one way that service managers enable innovative ideas to be
trialed in a relatively contained way (e.g. NZ Post's 'Better Change Project' - see here)
Managing short-term and long-term issues:
Managers need to be able to focus on the immediate issues as well as long-term issues and be
constantly scanning the environment for future trends and trying to future-proof their offerings.
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