What might have been some of the implications for Scuba Jamboree of the fact that 70% of the local diving industry was controlled by foreign operators, and the challenge for Thai dive specialists to become more competitive?
A: In the dive business, accreditation by a professional organization (like PADI) is essential. This was lacking in most Thai owned dive businesses. As the PADI organization-controlled membership of about 70% of the world’s recreational divers, local Thai dive shops were not getting the flow on business.
To increase competitiveness, standards on pricing and quality were needed in Thailand, so Thai operators could benefit from tourists having faith in the PADI system, and in Thai dive facilities.
Where would you locate Scuba Jamboree in the typology of service firms in international markets, and what are the marketing and managerial implications of this?
A: There is room for argument here, but Scuba Jamboree probably belongs in cell 4, value added customized services.
Implications of Value-added Customized Services in Scuba Jamboree Case Study
Some management implications of this cell:
- Requires highly skilled employees
- As there is high personal contact, cultural sensitivities are critical
- Difficult for potential buyer to assess the quality before purchase (again highlighting the importance of accreditation).
Identify and discuss important planning considerations with the aim of ensuring Scuba Jamboree’s success.
A: One of the most important considerations for Scuba Jamboree is the planning for growth. The owner could identify and analyze the different methods for growing the dive business into the islands of Thailand, and for neighboring countries like Malaysia and Cambodia.
Strategies include franchising Scuba Jamboree, developing a joint venture with a local operator or starting a Scuba Jamboree outlet in alternative locations.
What are some of the international marketing implications of;
(a) service intangibility; and
Service intangibility in an international setting can prove challenging and potentially problematic where the service organization, its name and reputation are unknown, where its services, their value and benefits also are unknown, and where it may be difficult for potential customers to sample the service in advance of its purchase.
Furthermore, it is difficult, if not impossible to export highly intangible services in a manner like physical goods. Exporters of intangibles simply do not enjoy the luxury or opportunity to learn from gradual experience, as does a good firm.
Service enterprises have no choice but to begin working on foreign soil from day one. This increases the costs and risks of internationalization. Consequently, service providers seeking to establish operations internationally must consider carefully the nature of differing cultural characteristics, mores and business practices, and ensure that these are suitably accommodated and reflected in all forms of communications, in and through personal representatives and the manner of service delivery.
Moreover, public relations activities, word-of-mouth, local referrals and recommendations are likely to play an important part in establishing a viable international presence.
Heterogeneity/variability can be particularly problematic if the service concept is not easily replicable and/or where there is a forced dependence on host country nationals.
Overcoming this problem depends heavily on detailed policies and procedures, vigilant systems management and control, training, development and supervision of local partners, and a strong and well-maintained local presence by parent company personnel.