What are the Strategies for managing demand to match capacity?

Strategies for managing demand to match capacity:

1. Partitioning the Demand: The demand for services is often grouped into random arrivals and planned arrivals. For an e.g. at a doctor’s clinic the walk-in patients arriving are more than those with appointments. Appointment can be controlled. But walk-in demand is uncontrollable.

We often find that the inflow of patients is higher on weekdays than weekend. Therefore, in order to level demand a partition can be created as, keep appointments in the latter part of the week i.e. weekends and only walk-in patients on weekdays.

2. Vary the service offering: Depending on the seasons of the year, day of the week, or time of the day, we can change the nature of the service offering. For an example, accounting firms focus on tax preparations and general activities late in the year and until April when the taxes are due. During the other times of the year they can focus on auditing and other general consulting activities.

Care should be taken in implementing strategies to change the service offerings as change may easily imply and require alterations in other marketing variables such as promotion pricing and staffing in order to match the new offerings. Until and unless these new additional marketing mix variables are altered effectively to support the offering the strategy may not work.

1. Developing Complementary Services: Complementary services are basically offered in order to occupy waiting customers. The Indian Restaurants have discovered the benefits of complementary services by adding a bar to the Restaurant. The customers can enjoy food and drinks separately as well as together.
2. Promoting off-peak Demand: During off-seasons holiday resorts use their premises as retreat location for business or professional groups. In the same way in order to encourage long distance dialing the Telephone companies offer lower rates at night.
3. Pricing Incentives: In order to smoothen the demand on the service process, prices can be raised during peak times and lower, at non-peak times. Movies have matinee special and hotels offers lowest rates during weekends.
4. Communicate with the Customers: Another way for shifting demand is to communicate with the customers and let them know the peak demand period so that they can choose to use the services at alternative times and avoids crowding.
5. Modify Timing and location of service delivery: Extending working hours and working on weekends can meet the customer’s demand. Another strategy may also work by moving the service to a new location in order to meet the demands of the customers.
6. Advertising and Sales promotion: Advertising and sales promotion can be used to emphasize different service benefits during different period i.e. peak and slow period. Advertising messages can also be used to remind customers about the peak demand times and promotional offers during the off-season.

Strategies when demand and capacity cannot be matched:

1. Reservations and Appointments: Examples: Airlines, Railways, Health Care, and Hospitals, Doctors, etc
2. Waiting Lines
3. Triage -Means Sorting: Example: Emergency rooms are given on the basis of critical and not in order of arrival.
4. Delaying Service Delivery: Next day or next week or until capacity becomes available.