Week $4$ Unit Exercise

De Mar$$s Product Strategy

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$.$ As assistant

service coordinator Janie Walter puts it: $$We will be there to fix your A$/$C on the fourth of July,

and it$$s not a penny extra. When our competitors won$$t get out of bed, we$$ll be there!$$

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.

The company assesses no travel charge because $$it$$s not fair to charge customers for driving

out.$$ Owner Larry Harmon says: $$We are in an industry that doesn$$t have the best reputation. If

we start making money our main goal, we are in trouble. So I stress customer satisfaction; money

is the by$-$product.$$

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. Says credit manager Anne

Semrick: $$The person who wants a nine$-$to$-$five job needs to go somewhere else.$$

De Mar is a premium pricer. Yet customers respond because De Mar delivers value$$that is$,$

benefits for costs. In $8$ years, annual sales increased from about $$200,000$ to more than

$$3\mathrm{.}3$ million.

Discussion Questions

$$ What is De Mar$$s product? Identify the tangible parts of this product and its service

components.

$$ How should other areas of De Mar $($marketing$,$ finance, personnel$)$ support its product

development plan?

$$ Even though De Mar$$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?

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