Exam 14: Coping With Fluctuating Demand for Services

When planning for the demand of his service offering,Steve was faced with two problems typically experienced by service providers.Describe these two problem areas,and discuss why it is important for services marketers to resolve them.

Smoothing demand means shifting patronage to times when a service's productive capacity is underused and deflecting or discouraging patronage when it is oversubscribed.

Service organizations should never try to balance service capacity and demand by influencing or changing the nature of customer demand.

Since demand cycles often make waiting time an uncommon occurrence;service organizations need not worry about finding ways to make the customers' waiting experience more tolerable.

In an effort to fill capacity and maximize revenue,organizations often create too much demand for their service offerings.

Service organizations often face the challenge of balancing capacity and demand,rather than simply creating it.

COMPLETION QUESTIONS Random Predictive Service Capacity Chasing Maximum Optimum Smoothing Demand Demarketing Reservation System Formal Queuing System -___________ fluctuations in demand occur without warning and cannot be easily managed.

During a recent meeting of top management,the vice president of production asserted that to ensure service excellence,service providers are encouraged to achieve maximum capacity utilization.As vice president of marketing,how would you respond to this statement?

COMPLETION QUESTIONS Random Predictive Service Capacity Chasing Maximum Optimum Smoothing Demand Demarketing Reservation System Formal Queuing System -___________ demand refers to a process of expanding or reducing the organization's productive capacity to meet fluctuating demand.

COMPLETION QUESTIONS Random Predictive Service Capacity Chasing Maximum Optimum Smoothing Demand Demarketing Reservation System Formal Queuing System -A firm's ___________ capacity is the number of customers that can be effectively handled under the best of conditions.

The key for any service organization is to strike a balance between capacity and demand.

COMPLETION QUESTIONS Random Predictive Service Capacity Chasing Maximum Optimum Smoothing Demand Demarketing Reservation System Formal Queuing System -_____________ is the term for the activity of shifting or encouraging patronage to a time when a service's productive capacity is underutilized,and deflecting or discouraging patronage when its capacity is oversubscribed.

Which of the following service characteristics can NOT be adjusted to stretch or shrink production capacity to accommodate the anticipated level of customer patronage?

Which of the following is NOT a benefit of a reservation system for controlling demand for a service offering?

Each additional customer served beyond a service organization's _________ capacity ________ the service experience for the customers and the organization.

What issues must be examined to understand the nature of service demand?

Optimum capacity refers to the number of customers who can be effectively handled under ideal conditions.

Service organizations may employ any of the elements of the traditional marketing mix to increase or decrease demand for its services at times when patronage is low or high.

Why is demand management a significant problem for services marketing?

Random fluctuation in service demand can be easily managed.