Year 1
60
60
$1200
$72000
Year 2
15
60
$1200
$72000
$144000
$2400
Hence a new customer in the span of two years would give average
revenue of $2400 so as long as the company spent lower than this
amount on marketing and advertising spend or improvement of
service amenities, they would still be making a profit.
Q
Service quality can be measure for Outcomes, Process and
Physical Evidence.
Reliability: Club Med customers relied on the service to a large
extent. This was indicated by the 25% repeat purchase. They also
know that the prices are better and more competitive than other
companies. During the process however, the customers to feel
safer have to have more safety of their belonging.
Responsiveness: The degree of responsiveness was high. Even
when external environmental forces would act on the service
delivery process, like rains, the customers still had high satisfaction
or delight. Increased advertising spend would help Club Med attract
new customers. Increasing loyalty of distribution networks and
finding new channels of sales, like wholesale packages, could be
looked at. This would increase costs, but impact sales and increase
sales for the company manifold.
Empathy: The GOs and chief of every resort were the biggest
element of Club Meds service delivery. They empathized with the
customers, treated them like they were a part of a big family and
regularly interacted with them. They even facilitated inter-customer
interactions. The customers thus had a delightful experience. The
sales increased each year because of this. An opportunity for Club
Med was to have training of GOs and chiefs by other successful
ones so the level of satisfaction was high at all their resorts. They
could also develop new interaction programs especially for the
nighttime, ones which customers felt comfortable in taking up
(unlike the hand movement dance which was hard for customers to
pick up)
Assurance: When availing Club Meds service the vacationers had
a delightful experience, which is why they recommended it to their
friends and family. Installing locks and keys would increase the
assurance.
Tangible: With new competitors coming up in the market and
offering better facilities like large pools, more sports facilities, an
opportunity for improvement existed where Club Med could improve
their existing facilities to attract new customers.
The Spartan rooms allowed the vacationers to get out the rut of
their busy lives. That model was unique to Club Med therefore it
must not be changed.
One way in which physical evidence tangibles can be looked at is
their capacity increases and management. They have increased
occupancy in locations like Asia where occupancy is declining even
though potential new customers are available in the market. This