What is service capacity?

Service capacity may be understood as a volume that service can be managed while ensuring certain pre-defined quality standards and overall delivery performance. Service capacity management focuses on providing better services to clients and customers as per their demands.

An image of a logo of customer service
Figure 1: An image of a logo of customer service.
CC0 1.0 | Image Credit: https://commons.wikimedia.org |

Objective of service capacity

Service capacity aims at producing work or output based on a time frame allotted by a company. The service team's work is like a provider that is responsible for delivering effective services to customers. The service team should have a proper budget plan to implement the action before offering services to a customer in service management. An appropriate service plan is necessary for selling and marketing goods and services.

The marketer needs to analyze and research a brand of a product and then make a strategy that will match market strategy policies while advertising goods and services. The marketing mix is very important in terms of product, price, place, and promotion. To keep that up, they need to train the sales team to convey the same in an effective vocal manner to the customer.

Service management capacity also depends on a customer's interaction with a company and what they feel for their business. Service capacity can be measured as per the fulfillment of the customers' demands. The service team should be well managed by management before allocating resources. While distributing products and services, the company should have a clear mindset keeping target audiences' demands and wants in mind.

Importance of service capacity management

There are three important aspects that should be considered for better service capacity management. These aspects have been discussed below:

  • It is evident that services cannot be stored in any specific place. So, the most important aspect of service capacity is its capacity management in terms of its availability. There should be an optimum amount of capacity as and when required to perform a specific service.
  • A service should also be available as and when required by the customers. If the required service is not available at the customer demand point, the customers may get frustrated, and accordingly, a business firm may lose its customers or clients.
  • It is also evident that services are intangible in nature, and thus there exists a high degree of volatility in the case of services. At the time of service capacity management, it should be understood from the service provider's standpoint that there will be high demand volatility, and the service provider should plan accordingly, keeping this thing in mind.

What are the elements of service capacity?

There are certain elements that have a vital role to play in a service capacity. These elements have been discussed below:

  1. Service capacity management is of utmost significance when it comes to the allocation of resources accurately.
  2. Through capacity marketing strategy, an industry can identify how much goods need to be produced? How many resources are needed to fulfill the demands of a customer? And so on.
  3. Having a suitable service strategy is crucial for balancing the wants and needs of customers as per their demands. A company or an industry should always have a backup service plan to provide services on time.
  4. The marketer needs to focus on 'on-time' delivery and promote a brand effectively so that customers can understand the nature of services.
  5. The service management team should be attentive regarding to the correct usage of technology. Companies need to be updated in terms of technology and marketing-related software to run a suitable operating system in service management.
  6. Social media usage for advertising a brand should be valuable and easy to understand. Digital marketers should be well trained to use digital marketing accurately to promote services to customers in a better way. Social media operations thus have a good role in enhancing the recall value of a specific brand.
  7. Service capacity should be structured so that it can fulfill customer satisfaction. The capacity of the workflow will be very smooth if coordination with management is smooth and balanced.
  8. Electronic Commerce (or E-commerce) is vital for having an online presence and generating revenue through online sales. The service capacity team needs to focus on E-commerce, such as Business-to-Business (B2B), market research, product development, marketing mix, and so on. E-commerce is mandatory as sales should be digitally sound, such as B2B, sales operations, and inbound marketing.
  9. Customer feedback is vital to knowing about customer experiences as well as employee feedback is equally essential in the workplace to balance resources and manpower. Market research should be considered a priority for product development. Attention must be paid when launching a new product and classifying industrial goods, consumer goods, durable, and unsought products.
  10. Marketing campaigns should be planned so as to make people aware of better service and productivity. Inbound marketing methodology should be customer-oriented so that those ideas can attract customers. This way, customer-centric management tends to provide fruitful results in the long run of the business.
  11. Training and development are very much required as it is a business need. The sales management team should have a proper one-on-one interaction with the customers to learn about their experiences and complaints about product development. The sales management software should be updated.
  12. Management should be trained adequately, and they should be very much capable of providing quality goods and services to their customers in order to avoid the future risk of losing good customers. The delivery of products on time represents brand standard and quality services.
An image of the total service product concept.
Figure 2: An image of the total service product concept.
CC BY-SA 4.0 | https://commons.wikimedia.org/ | BronHiggs

Types of service capacity

Calls per minute

Call per minute defines a service capacity via telecommunication services based on incoming and outgoing calls.

Tickets per hour

It defines per hour costs of a ticket.

Seating capacity

Seating capacity is the number of people that can be occupied in available seating space.

Requests per minute

It is referred to as the response time per request per minute.

Several users

The number of users is defined as a calculation of users in numbers.

Number of providers

It defines the number of providers available in the count of numbers.

An image of an 8-wheeler vehicle service
Figure 3: An image of an 8-wheeler vehicle service.
CC BY-SA 2.0 | https://commons.wikimedia.org | Kevin.B

Common Mistakes

It is important to understand from the student’s perspective that they do not strategize things beforehand and ultimately fail to develop a suitable strategy for better service capacity management. There should also be some backup plan to deal with other adversities that may not hamper the service capacity management and overall operations management.

Also, it is sometimes observed that students often do not carry out any sort of market research. Market research precisely helps in understanding the expectations and needs of the market and taking appropriate steps for service capacity management.

Context and Applications

Service capacity is a fundamental topic in marketing and is important for other courses of study like Bachelor in Business Administration, Masters in Business Administration (Marketing), Post Graduate Diploma in Management (Marketing/Sales), and Diploma Courses in Service Management or Marketing.

While studying service capacity, it is important to read the following topics to understand the concept better:

  • Customer service
  • Service management
  • Marketing management
  • Marketing

Practice Problems

1. Identify the option that comes under the purview of an intangible dominant product.

  1. Teaching
  2. Farming
  3. Mining
  4. Transportation

Answer: a

Explanation: Teaching is an intangible dominant product that an individual cannot touch, but can feel it.

2. What is the process called when a seller charges different prices from the consumers?

  1. Supplementary
  2. Reasonable price
  3. Price discrimination
  4. Complementary price

Answer: c

Explanation: A kind of market strategy where a seller charges a different price from a customer for the same goods and services is called price discrimination.

3. Which service capacity occurs without a hassle, interruption, or any issues?

  1. Customer platforms
  2. Seamless service
  3. Customer service
  4. Functional service

Answer: b

Explanation: Seamless service is one service that occurs without any disturbance or error.

4. What is the second 'P' in service marketing?

  1. Price
  2. Product
  3. Promotion
  4. Place

Answer: a

Explanation: Price is the second important 'P' of marketing, as without finalizing a price, a company cannot sell products or goods in the market.

5. Which of the following is not an element of service capacity?

  1. Social media usage for advertising
  2. Marketing campaigns
  3. E-commerce presence
  4. Research and development

Answer: d

Explanation: Research and development (R&D) is not an element of service capacity. It is rather a crucial process or element of product development.

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