Palace Hotel - Customer Relation Service

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Host business and private functions. Palace Hotel is located in the financial district and by making private rooms for the guest to use for business meetings and other social events can be a huge boost for the hotel. A businessman from overseas can conduct a business at the place of their stay as this facility is not available at hotel that focuses more to luxury and recreational guests. Palace Hotel can offer this to guests and even give them discounts if they stay and use the function room. This also gives the hotel extra revenue as well. If the function room is not being in use, for example during weekends and Public holidays, Palace Hotel can rent the area to people and maybe can be used for school reunion or even weddings at the private function rooms. Thus, this enables the hotel not only providing guests a place to stay, but also a place for them to work conveniently.

Going Budget

Palace Hotel can do the other way, the hotel can keep their service level at the same level. However, by doing so, in order for the hotel to be able to compete is by competing in the lower part, which is competing with the budget hotels such as Castle and Alexander. In this way, it shifts the Hotel positioning nearer to the shaded area. The action taken in this alternative is that we change the rate of the hotel rooms. Even though it will decrease the benefit gap for the hotel, it will increase the gross revenue of the hotel.

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Question 2

Identify two failed new service developments or experiences. Analyze the causes for their failure.

Recommendation for improvements.

There are seven services developments and experiences that organization can do to their company. They are: a) style change, b) service improvements, c) supplementary service innovation, d) process line extensions, e) product line extensions, f) major process innovations, and g) major service innovations. In this discussion, we will be looking at the two most common service development that often faces obstacles and failures and try to look for tips in order for the instance to be successful and can bring advantage for the company.

Product line extensions is an action that a company make to add another product line that falls under the same category of the company’s main category. This enables the company to serve better their loyal customers as they are now serving more options for the customer or even this unlocks the company to new customers at new market environment. Companies can offer new product line with different ingredients, packaging sizes, flavors, colors and many more in order to attract customers.

There are few ways that companies can do in order to extend their product line which is vertically and horizontally. Horizontal extension is where companies keep its main product’s quality and quantity with the same price, however the company extends by making new flavors and colors in which is differentiate its products. For instance, Fanta, a company under Coca Cola, makes new color and flavors which enables customers to try new flavors of their soft drink.

Vertical extension is the opposite, in which the company will decrease or increase its product’s quality, depends on the market demand whether the customers wants superior item or inferior item. A poor example of vertical extension has been done by Apple, Inc. In 2015, the company introduced their iPhone 5c which offers customer to be able to buy an ‘inferior’ iPhone with more ‘budget-friendly’ price tag, which is marketed simultaneously with its better brother, iPhone 5s. However, this was received poorly by the market as people has that paradigm that Apple makes premium quality products. When 5c was introduced, some have thought that Apple is not maintaining its products’ quality, which is one of the factor why Apple Fanboys love Apple products.

The company then discontinued the product thereafter and closing the gap by making iPhone SE, together with its big brother, iPhone 6 and 6+. With this Apple case, we must understand and acknowledge what our customers want from us and how we can maintain loyalty of our customers. How can we do that is by conducting a market research which will give us views, critics and feedbacks from our customers. For Apple, they may be able to conduct by inviting phone reviewer or make a field survey to their fans. This will give Apple perspectives which Apple can take to consider before making their upcoming products.

Second, Major process innovations is the least ‘transforming’ at the surface which some call it least ‘sexy’ transformation as the ones that is changes are within the company. People skills, facilities, technologies that is being used in the company is being changed which transforms on how the organization deliver or produce their products and services.

Change in equipment and system can be considered under this change as the presence of new tools help the company make their products more efficiently or effectively. For example, Henry Ford, founder of Ford, innovate on how his company produces cars which is known to be America’s bestselling car, Ford T Model. He simplified the process of making the car which decreases the assembly time from 12 hours to 90 minutes which also kills the unnecessary cost and make the company able to make more cars and push down the price to most competitive level.

Apple also has this transformational change which kills one of the industry in music which is by introducing iTunes back in the early 2000s. Steve Jobs openly introduce the easiness of using iTunes compared to compact disc or others, like MP3 player. Apple changes on how artists and musicians can deliver their product to music enthusiasts by having this transformational platform (before the disruptive entrance of Spotify).

Another aspect that can be changed is on how we deal with our system within the company or on how we engage with our customer. In this case, usually the things that is changed can be director indirect. Direct change in the system can include the storage and stocking system which will be able to minimize the company’s loss during the stocking progress. On the other hand, indirect system changes usually affect the supporting department in the organization such as finance and accounting department. This also can improve on the performance of the company as they may upgrade their system or program and will enhance accuracy in their results in the end.

The company will still have the chance of failing to implement