Answer to Question #208996 in Management for PAS

Question

SUBJECT : SERVICE MARKETING

Is the selection of location for service outlet an important decision , discuss importance in 6 points with elaboration ? What considerations influence site location , explain any 6 factors (considerations) with elaboration? Name some of the innovations in service distribution?

Answer 1

The selection of location for a service outlet is an important decision because of the following reasons;

1) Proper selection of location enables attraction and retaining of talents. This means a city center location. Cities draw in increasing numbers of talents of young and international people. This could help boost and grow the business management efficiency. Therefore, making service outlet to become accessible to prospective customers.

2) Proper location could give the service outlet a network of connected businesses. Therefore, the service outlet could have access to a better and bigger talent pool, regulatory bodies, investors and economies of scale. However, this could be expensive; weigh up the pros and cons and decide what’s important for the service outlet.

3) Helps to determine places with fewer regulations and lower tax. Bearing in mind that places with lower tax rates can be favourable for the service outlet while understand the risks involved with the one with fewer regulations such as unhealthy competition from the competitors.

4) Growth in technology. This could help the business to access a better technological experience especially in the urbanized areas. Thus, the business runs smoothly and efficiently.

5) Selection of Trade zones. Helps the service outlet to consider the benefits offered by free-trade zones, which are closed facilities monitored by customs services where goods can be brought without the usual customs requirements.

6) Selection of location could help the service outlet to choose to lower the cost. This is very likely the most obvious location advantage. Cost savings come in all shapes and sizes, including labour costs, office rental, energy rates and business taxes. Each one of these types of costs differ from place to place.

The following are factors that influence site location;

1) Scale of operation:

The service outlet should decide the size of the business. Size will depend upon the financial and managerial resources, capacity to bear risks and demand potential of the area.

2) Amount of capital:

Then the owner of the business has to decide the amount and sources of capital. The amount of capital required depends on the size of business, terms of trade, availability of credit, cost of decoration of shop and display of goods. Adequate finance is necessary for success in any business.

3) Selection of services offered;

The services to be sold are selected on the basis of the nature, status and needs of the customers. Changes in incomes, habits and fashions of customers must be considered in the choice of services offered.

4) Sales policy:

The business should adopt a suitable sales policy to increase sales and profits. Sales policy and prices should be decided keeping in mind competition and customers.

5) Decoration of site:

The layout and decoration of site are decided so that customers find the place attractive and comfortable for shopping. The site owner should arrange and display the service outlet in an attractive manner to attract more and more customers.

6) Choice of the site:

A site is selected for location of the service outlet. A owner may open the service outlet in special markets or in residential areas.

The service outlet should be near the consumers in a congested locality or at a place frequently visited by the consumers. The place of location should be easily accessible to consumers.

The following are some innovations in service distribution;

1) Establish an Online Experience.

2) Build a Customer-First Culture to prioritize customers needs.

3) Prioritize High-Quality Customer Support.

4) Listen and Respond to Customer Reviews.

5) Provide a Customer Success Manager to significantly influence the customer experience.