Transcript Chapter 17 Marketing Channels for Services

Chapter 17
Marketing Channels for Services
Objective 1:
17
The Importance of Services
The services sector of the economy is more
than twice the size of the manufacturing sector.
Services account for more than half of all
consumer expenditures.
Almost 80% of all new jobs created over the
past 10 years have been in the service sector.
Objective 2:
Services Marketing Objectives
Services Marketing Objectives
=
Product Marketing Objectives
1. Offer services (or products) that are
targeted to meet customer demand
2. Present services (or products) to customers
so as to maximize their appeal.
17
Objective 3:
Characteristics of Services
Characteristics of Services that
Distinguish them from Products
•
•
•
•
•
The intangibility of services
The inseparability of services from service providers
The difficulty of standardizing services
The high degree of customer involvement in services
The perishability of services
17
Intangibility of Services
Service
Product
• Much less tangible
than physical products
• Consumers have more
definite impressions &
preferences about physical
products because of
their tangibility
• Difficult to differentiate
brands
≠
17
Inseparability of Services
Service
• Inextricably tied to
provider of service
• Services produced do
not exist as entities in
and of themselves
Product
≠
• An entity that
exists apart from
the manufacturer itself
17
Difficulty of Standardization
Service
Product
• More difficult to
standardize than products
• High degree of
standardization
found in advanced
industrial societies
• Variability associated
with human element is
much more likely to
creep into the production
of services than into
the production of products
≠
17
Customer Involvement in Services
Service
Product
• Consumers are more
involved in the
production of services
than they are in the
production of products.
• Individual consumers
do not play much of a
role in determining the
nature of products
manufactured for them.
≠
=
Consumer is involved only
in consumption of
product
17
Perishability of Services
Service
Product
• Services cannot be
produced in anticipation
of customer needs &
then stored in inventory
until purchased.
• Products can be
inventoried and stored—
even the most
perishable products.
≠
17
Implications of Service Characteristics
for Channel Management
The relationship between the characteristics
of services & the management of marketing
channels includes:
• Intangibility & Channel Management
• Inseparability & Channel Management
• Difficulty of Standardization & Channel Management
• Customer Involvement & Channel Management
• Perishability of Services & Channel Management
17
Objective 4:
Intangibility &
Channel Management
Marketing channels provide
the most direct & potent basis
for making a service more tangible.
Why?
The customer is directly exposed to and
experiences the service provided by the channel.
17
Objective 5:
Inseparability &
Channel Management
The inseparability of services from the provider
means that the service provider does not have
the “safety net” available to the product manufacturer,
whereby the product itself can make up for
poor distribution.
Why?
All aspects of the marketing channel with
which the consumer comes into contact
are thus a reflection of the quality of the service.
17
Difficulty of Standardization
& Channel Management
In the case of franchises, it is difficult for the channel
manager to get the franchisees to deliver a
consistent level of service.
Why?
The amount of human involvement—behavior— is
often involved in providing services.
16
Objective 6:
Customer Involvement &
Channel Management
In a channel containing services such as barbers,
fitness clubs, and tax preparation, the channel
design should facilitate customer involvement.
Why?
Such services generally require input from the
customer in order to be performed successfully.
17
Objective 7:
Perishability of Services
& Channel Management
The channel must be designed so as to connect
as efficiently as possible those providing the
service with those desiring to obtain it.
Why?
Because of the high degree of perishability of unsold
services, design should maximize the sale of service
during its limited exposure to the target market.
17
Objective 8:
Additional Perspectives
Important considerations for developing &
operating marketing channels for services
1. Shorter Channels
2. Franchised Channels
3. Customization of Services
4. Channel Flows
17
Shorter Channels
The direct structure in a short channel eliminates
the challenge of designing a channel structure
in terms of:
• length, intensity, & type of intermediaries
at each level
• the selection of intermediaries
• the need to motivate intermediaries to do
an effective job of selling the product.
17
Franchised Channels
Using business format franchising can give the
service provider the potential to reap benefits:
•
•
•
the scale of economies of a large organization
the entrepreneurial drive & motivation
associated with independently owned
businesses
the degree of control necessary to foster
standardization in services offered by the
individual franchised units
17
Customization of Services
• Many services provide for a high degree
of customization.
• For services requiring a high degree of
customization, small-scale channel consisting
of local independent service providers are
likely to continue to play a major role.
17
Channel Flows
• Flows that “carry” the service through the
channel are those of information,
negotiation, & promotion.
• Many can be handled electronically,
with the role of technology becoming
even greater in the future than it
already is.
17