Group 2 MM 1305 Case Study No. 4 PDF

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Case Study 4...

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Case Study No. 4: De Mar’s Product Strategy

Mary Rose A. Frames Cle Marven P. Balaga Maria Rowela M. Payao School of Business and Economics, University of San Carlos MM 1305: Operations Management Engr. Jovenal M. Arnaiz, MMBM March 20, 2021

2 INTRODUCTION De Mar, a plumbing, heating, and air-conditioning company located in Fresno, California, has a simple but powerful product strategy: Solve the customer’s problem no matter what, solve the problem when the customer needs it solved, and make sure the customer feels good when you leave. De Mar offers guaranteed, same-day service for customers requiring it. The company provides 24-hour-a-day, 7-day-a-week service at no extra charge for customers whose air conditioning dies on a hot summer Sunday or whose toilet overflows at 2:30 A.M. De Mar guarantees the price of a job to the penny before the work begins. Whereas most competitors guarantee their work for 30 days, De Mar guarantees all parts and labor for one year. De Mar uses selective hiring, ongoing training and education, performance measures, and compensation that incorporate customer satisfaction, strong teamwork, peer pressure, empowerment, and aggressive promotion to implement its strategy. In 8 years, annual sales increased from about $200,000 to more than $3.3 million.

STATEMENT OF THE PROBLEM This case study on De Mar’s Product Strategy aims to answer the following questions: 1. What is De Mar’s product? Identify the tangible parts of this product and its service components 2. How should other areas of De Mar (Marketing, Finance, Personnel) support its product strategy? 3. Even though De Mar’s product is primarily a service product, how should each of the 10 Strategic OM Decisions in the text be managed to ensure that the product is successful?

ANALYSIS AND FINDINGS De Mar is dealing in providing plumbing repair and installation of new plumbing to their customers. It is characterized by being a service provider, but not based on products

3 but rather a company in charge of observing the products since they perform installation and repair of plumbing, heating, and air conditioning. Their tangible products could be the new parts that are required to repair the air conditioning, heating or other plumbing. Hence, they offer installations and maintenance. The service component is: one visit charge for multiple visits, around the clock services throughout the year and on the same day service provision promises including oneyear guarantee for the repair services provided. One of its requirements is to maintain the service 7 days a week 24 hours a day without any charge, in addition to offering the guarantee of service for one year. In the areas of Marketing, Finance and Personnel, De Mar should perform the following in order to support its product strategy: 

Marketing – Marketing strategies through Social Media, Websites, Referrals can be used. This helps in getting customers who search for plumbing services on the internet with specific keywords like “best plumbing service in ABC area”. DeMar's marketing department can leverage the business's reputation and guarantee into a solid marketing campaign. The marketing team should do market comparisons of competitors and use that contrast in their marketing strategy.

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Finance – Setting up reasonable prices so the customers are happy and the company makes considerable profits could help in managing company finances.

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Personnel – De Mar need to employee the right person for the right job. To this they might need to make changes to their job allocation and recruiting strategies.

ALTERNATIVE COURSE OF ACTION Using the 10 Operations Management Decisions as basis for recommendation in ensuring that De Mar’s product is successful, the group suggests the following: 

Goods and Services Design – The services should be designed in such a way that the customers are asked for a feedback at the end of the service.

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Quality – DeMar's ultimate goal is client satisfaction, solve the problem when the customer needs it resolved, and make sure the client feels good when the job is completed.

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Process and Capacity – Business processes must be kept within the capacity of the company. If there is forecast of more customers call, more people should be employed.

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Location Selection – Location of the service delivery should be close to cities and towns to minimize on travel costs.

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Layout Design – The quality of the layout of the physical locations of the business adds to the quality of the business itself. They must include enough secure auto parking for service vehicles and inventory. Parts and area of expertise tools should be easily checked out per job.

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Human Resource and Job Design – Jobs should be designed in accordance to the capabilities and skills of specific human resources.

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Supply Chain Management – There needs to be a proper communication with the suppliers who provide the tangible items.

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Inventory – The Company must have a clear view of what items it has and what is required. They have to forecast what would be needed.

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Scheduling – There need to be proper job schedules for the employees who attend different customer calls. Repair of Domestic plumbing and heating/cooling is critical to the client and therefore should make a difference that the company satisfy the clients need in an expedited manner.

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Maintenance – The business operations of the company itself need a regular maintenance. Because of their 24/7 service their maintenance of equipment must be up to standard to reduce downtime that could result in customer dissatisfaction.

CONCLUSION It is clear that De Mar fundamentally focuses on the product or service differentiation strategy to encourage the consumer to choose their products and services over another in a

5 crowded field of competitors. They highlighted on their unique offerings that sets them apart from other companies and uses those differences to drive consumer choice....