Reg Turner set up Lilliput as an offshoot of his carpentry business in 2000. Some years before he had been asked by a friend to provide his children with a playhouse for the garden. He made them a Swiss-style chalet covering an area of about 4 square metres. Within 12 months of its arrival in the garden Reg had received requests for 15 more houses from friends and neighbours. By 2002 Reg had designed 11 different styles, based on modular sections, which were easy to install. The business was located beside one of the large garden centres on the outskirts of the town. He employed three full-time carpenters, a driver and a sales assistant (his mother-in-law) to run the retail side of the business. Reg would not compromise on the quality of his playhouses. He would only buy good materials and he oversaw the construction of the houses himself. A carpen- ter would always accompany the delivery van and undertake the installation for the customer. Reg managed to keep his costs lower than most of his competitors by doing his own retailing and by keeping overheads low. He did not accept any credit cards. He priced his houses about 20 per cent below those of garden centres, although It was possible to find less expensive products. He explained. "You can't forget how important children are in buying playhouses. It's not enough seeing pictures, they have to get inside and try them out. It is so important that we main- tain a family-friendly feel to the business."

struction methods. Tiffany suggested that she should now set up a website and said that it was time the business investigated the possibility of developing an internet business, offering online ordering of a restricted range of houses.

Lilliput attracted many customers, particularly at weekends. Several people included a visit to Lilliput with a visit to the garden centre next door. Reg had developed a good relationship with the manager of the garden centre. They both believed they gained from each other. Reg also attracted buyers from some of the other garden centres, who were always keen to inspect his latest designs and assess his prices.

The site itself was causing Reg some problems. As he made all the houses on-site he had to keep an area fenced off from the customers for safety reasons. This was at the back of the site. and necessitated delivery lorries moving through the display area. He explained: This site was only meant to be temporary. We had to demolish the building that was here before to make space. But it works well being next to the garden centre, so I think we might well stay here. Reg knew he would need to lay a proper car park, as the exist ing one was just an open area with a rubble babe and no markings. There were no signs except for one at the gate. Few of the houses had informa- tion, or even prices, on them- indeed it looked like they had been torn off.

and calls for brochures. I hardly get out of the office. Some of the customers get cross Be they have been kept waiting, but I have only one pair of hands. By the end of 2004 the business was so successful that there were now at least five weeks between order and delivery. Reg asked Mavis not to make any promises on deliv- ery dates for all new orders. Mavis replied with uncharacteristic anger, 'You just don't realise how difficult it is for me at the moment. How do you think the customers are going to react when I tell them 1 don't know when we can deliver and install the house? It's going to take me twice as long to deal with them now and I bet we lose a lot of sales. You have just taken advantage of me over the last three years and I have had enough."

Reg felt that visitors to the site fell into a number of distinct categories and Tiffany carried out a survey to assess the number of customers in each of the categories. She found that at least 60 per cent of the visitors had decided they wished to purchase a playhouse and visited the garden centre next door to see what was on offer before visiting Lilliput. About 10 per cent of this group said they would eventually purchase from Lilliput. Some 25 per cent had no clear purchase inten- tions, but saw the houses on display and decided to investigate further. Only about 3 per

cent of this group made a purchase. The remain- der were carrying out a more detailed review of the playhouse market before making a decision. These, more serious, potential customers were the most likely to purchase (about 30 per cent of those visiting the site).

Virtually all customers apart from the serious reviewers were heavily influenced by the personal touch, and the fact that their children were encouraged to try out the houses. The third group (serious reviewers) were split almost equally into half. One part clearly took the chil- dron's experience into account; the second part had more or less made up their mind as to specification and were purchasing largely on price.

Reg was keen to grow the business and there was no shortage of interest in his product. He realised he now needed to focus his attention on the operation.

Please read the attached case study and answer the following questions;

1) What is the service concept?
2) What are the service concepts currently delivered by Lilliput?
3) How would clarifying these service concepts assist Reg in deciding how to focus this service operation?

Answer rating: 100% (QA)

1 The service concept of Lilliput is to provide highquality playhouses for children with a familyfriendly atmosphere allowing customers to experience ... View the full answer