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From Marketing Journals - Article Example

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This article, "Service Positioning Through Structural Change" advocates and explains the benefits of providing a visual representation of the service processes in an effort to design and deliver a product or service more effectively and more efficiently. All goods and services are subjected to a process through their manufacturing, marketing, and delivery…
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Download file to see previous pages... The process adds to the product's final cost, convenience, and customer acceptance. A process may be streamlined to reduce costs and diminish consumer options, or the product may be customized, which adds to the total cost of the product but offers the consumer a greater number of alternatives. The article contended that the two major measurable and manageable characteristics of any process are complexity and divergence. It is the challenge of the manager to find the most effective balance of these important components of the process.
Complexity refers to the "number and intricacy of the steps required" to perform the process (35). A laboratory that performs DNA testing could be said to be more complex than checking the air pressure in a tire. Divergence is the "degree of freedom allowed or inherent in a process step or sequence" (35). Processes that require analyzation, assimilating data, and judgment are said to be highly divergent, such as a doctor performing surgery. By blueprinting a service into a schematically represented diagram, or flow chart, the degree of complexity and divergence can be readily and visually available. The complexity and divergence can then be adjusted to fit a marketing, cost, manufacturing, or consumer need.
Altering the complexity and divergence of the service process can have a significant impa...
For example, a gasoline outlet may decide to offer only 2 grades of gasoline instead of 4. This will save costs by reducing inventory requirements and overhead costs. However, the customer has been offered fewer options. Alternatively, the station may decide to carry 6 grades of gasoline and add kerosene and diesel fuel. This strategy can result in a niche market with lower volume and greater margins, as it increases the divergence and positions the station differently in the market.
Complexity also dictates the market position as well as consumer perception. A mechanic's garage may opt to reduce their complexity and limit their work to muffler and brake systems. This specialization strategy can be risky when competing with more broad based and full service alternatives (38). However, increasing complexity runs the risk of poor quality or customer confusion. Customers may be unaware that a garage that offers automobile detailing, inspections, body and paint, and mechanical work, also does quality brake work. The manager must look for the market position that will maximize the opportunities with the least risk.
In conclusion, visualizing the complexity and divergence of the service processes can help to understand the current market position and help plan for repositioning. The process that goods or services are subjected to is a raw material that can be manipulated and formed. This structured approach can reveal the characteristics that "not only affect market position, but also can be deliberately and strategically managed for positioning purposes" (42). Blueprinting and diagramming gives the manager a greater understanding and more control over the processes that affect cost, quality, deliverability, and consumer perception.
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Shostack, G L. ...Download file to see next pagesRead More
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