Service management 3

Question 1

What are the strategic location considerations?

Answer 1

🔁 1. Flexibility of Location

• Ability to adapt to changing economic/demographic conditions
• Important because location is a long-term, capital-intensive decision
• Multi-site strategy: Spread across countries to reduce risk (e.g. job losses in 1 country won’t collapse business)
• Pick sites near inelastic demand (Demand that stays the same despite price changes) (e.g. hotel near Suntec)

🥇 2. Competitive Positioning

• Establish a strong position relative to competitors
• First-mover advantage: Get the best location early before others do
• Barrier to entry: Hold prime spots before competitors can access them

📈 3. Demand Management

• Control quantity, quality & timing of demand
• Hotels can’t change capacity but can choose locations near steady demand
  
  • E.g. ION Orchard attracts high-spending tourists all year
  • Changi Airport’s Crowne Plaza = constant traveler demand

🍔 4. Focus through Duplication (“Cookie-Cutter” Approach)

• Offer standardised services at many locations (creates familiarity for customers)
• E.g. McDonald’s, 7-Eleven
• Caution: Avoid demand cannibalisation (stores from same branch too close)
  
  • Plan expansion wisely to prevent stealing own business

Question 2

Explain Competitive clustering

Answer 2

• Definition: Grouping similar competitors in the same area.
• Why? Consumers prefer to compare before buying.
• Example: Car dealerships @ Leng Kee / Computer shops @ Sim Lim Square.
• Benefit: Higher foot traffic → Higher sales and occupancy.
• 🔁 Think: “Shoppers want choice, not isolation.”

Question 3

Explain Saturation marketing

Answer 3

2. Saturation Marketing

• Definition: Placing multiple outlets of the same brand close together.
• Why? Increases brand visibility and impulse buying.
• Example: Au Bon Pain sandwich stores all over Boston.
• Goal: Brand is always in sight so it is implanted into the customer’s mind.
• Best for: High foot traffic areas (downtowns, malls).

Question 4

What are the site selection considerations?

Answer 4

1. Access
   Is the site easy to reach by car, MRT, or bus?
2. Visibility
   Can customers see the site easily?

Are there signs to help them find it?

3. Traffic
   Is there high footfall or human traffic nearby?

More traffic = more potential customers

4. Parking
   Is there enough parking nearby?
5. Expansion
   Is there room to grow or expand the business later?
6. Environment
   Does the surrounding area match the service (e.g., offices, schools, homes)?
7. Competitors
   Are there other similar businesses nearby? (Can be good for clustering)
8. Government
   Any rules, taxes, or zoning laws that affect your business?
9. Labour
   Is there available and skilled staff nearby?
10. Complements
    Are there other services nearby that can help attract your customers?
    (E.g. restaurants near hotels, salons near malls)