Ms

Question 1

What is the most likely core business of STA Travel? Based on the degree of tangible actions and nature of recipient of the service classification scheme, to which category would you place STA TravelЎЇs core business? Discuss the marketing and managerial challenges for services found under this category of the abovementioned service classification scheme.

The most likely core business of STA travel is tourism. Due to different levels of customer involvement service processes had categorised into four parts which are tangible action to peopleЎЇs bodies (people processing), tangible actions to goods and other physical possessions (possession processing), intangible actions directed at peopleЎЇs minds (mental-stimulus processing) and intangible actions directed at intangible assets (information processing).

People processing is which customers need to be physically appear during the whole service delivery in order to gain the benefits of the services. It involves a high contact with the customer. Possession processing requires processing must be present, but the customer no need to be on the spot. Mental-stimulus processing need customers to be present mentally but can be at anywhere with connected by broadcast signal or telecommunication links. Information processing no need to have direct involvement with the customer once the request for the service has been start.

STA travel provides holiday travel trips to place all over the world. They provide the service to let customer enjoy the travel, have fun with friends and family and also having good experiences. Therefore, STA travel is fall under the intangible actions directed at peopleЎЇs minds (mental-stimulus processing) because there is no tangible product on it.

Due to this intangibility and directed the people's mind this will have some implicating the marketing and managerial challenge. I will discuss about 5Ps which are product, price, place and promotion with one more extended P that is people. Since STA travel is tourism and itЎЇs primarily a service based industry, the principal products provided by recreation/tourism businesses are recreational experiences and hospitality. Therefore, because of these are intangible products and is more difficult to market than tangible products such as automobiles. Besides that, the factors that create a quality recreational experience is differ among people. The intangible nature of services makes quality control difficult but important. It also makes it more difficult for customer to evaluate and compare the service offered. For an example, a quality experience for one food favourer will not like to go temple for visit. Therefore, programs, facilities and services to provide should be based on the needs and desires of STA targets market. In order to enhance the quality of the overall experience during the trip and make their product more tangible, STA could provide trip planning packages which include maps, and information regarding lodging, food and quality souvenirs and mementos. This could

make their overall experience more memorable to customer.

For the pricing, it is the most important and visible elements among the marketing mix. Customer are often related the price to the quality of the product that offered. As what Zeithaml has defined that ÐŽ®Value is the quality I get for the price I payЎЇ (Zeithaml, 1988) Therefore before the product price is set several aspect need to pay attention with are service guarantees, agreeing on the price with the customer before the service is provided, bundled and also special offers. Besides this, STA should give attention to pricing strategies which may encourage off season and non-peak period sales, longer stays, group business, and the sale of package plans like combination of room, meals, and so on.

For place, the things that concern is the information availability to customer and also customer service that provided. It is very important that the availability of information that customer could get it. The convenience of information is also a very important thing that concern. STA would have created a website, putting agents, free-toll telephone call and also more service centre allocated. In the service or information centre, STA could provide free drinks which will serve them even better. These are the main sources that customer would easily get through.

For promotion, STA could hire celebrities as spokesperson where they can stress more on the personality such as enjoying different lifestyle with family and friends. Besides that, after experienced customer could also be a free promotion to the STA as they will spread word-of-mouth to other people which is also a very effective way on promoting their product.

Lastly, for people, it is very important on the involvement of customers. Customer satisfaction will increase if the customers have high involvement during the trip. Employee also plays an important part in the STA which they represent STA to deal and serve the customer. Therefore, STA could provide sufficient training for employee and also more benefit to them so that they will serve the customer better and also added profitability to the STA.

Question 2

In installing the Queue Buster system, STA Travel has basically lowered the cost of service incurred by customers. Discuss the various types of service costs that could be incurred by potential customers of STA Travel in using the call centre.

Before STA travel had installed the Queue Buster system, they are still using the call centre to entertain the customer. There are 3 types of costs incurred by potential customer of STA in using the call centre. The costs incurred which are economy cost, temporal cost and also psychological cost.

At first, there is opportunity cost incurred in the calling. When the customer trying to call to the centre and time need to wait for agent to attend. Instead on calling and waiting for the agent to attend, the customer can use the time for doing other things.

There is also economy cost incurred in the calling centre. For example, the telephone cost for customer to call the centre. Besides that, temporal risk is also incurred because of the time. Customer need to spend their time to call the STA centre in order to know information. This is pretty wasting the customerЎЇs time. At last, psychological cost also would incur to the customer. Whether the agent is confident enough to provide