Transcript Chapter 17 Marketing Channels for Services

Chapter 17
Marketing Channels for Services
Major Topics for Ch. 17
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• Characteristics of Services and
Implications**
• Focus of Service Marketing Channel**
• Key Service Intermediaries*
• Key Source of Service Distribution
Problem*
• Service Delivery Strategy
• Additional Issues
Five Characteristics of Services*
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1. The intangibility of services
2. The inseparability of services from
service providers
3. The difficulty of standardizing
services  variability
4. The perishability of services
5. The higher degree of customer
involvement in services
Implications of Service Characteristics
for Channel Management*
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1. • Intangibility & Channel Management
2. • Inseparability & Channel Management
3. • Variability of Services & Channel Management
4. • Perishability of Services & Channel
Management
5. Higher Customer Involvement & Channel
Management
Intangibility of Services &
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.
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Inseparability of Services &
Channel Management
Service provider does not have
the “safety net” available to the product
manufacturer
Why?
All aspects of the marketing channel with
which the consumer comes into contact
are thus a reflection of the quality of the service.
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Variability of Services
& 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?
Human behavior is
often involved in providing services.
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Perishability of Services
& Channel Management
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The channel must be designed so as to connect
as efficiently as possible those providing the
service with those desiring to obtain it.
Why?
Design should maximize the sale of service during its
limited exposure to the target market.
Ex) Temporary Jobs
Customer Involvement &
Channel Management*
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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.
Ex) Co-creation;
market segmentation(High vs. Low involvement): Health Care
2. Focus of Service Channel*: Identifying ways to
bring the customer and service provider together.
Ex) E-bay
3. Key Service Intermediaries*:
1) Franchising: License by a franchisor to deliver a
unique service concept it has created or popularized.
2) Agents and Brokers: Representative who
distribute or sell services of one or more service
suppliers.
3) Electronic Channels: All forms of service
provision by electronic media (TV, phone, computer,
etc,.)
4. A Key Source of Service Distribution
Problems*:
Gap 3: (Actual) Service delivery does not meet
the specifications of the service provider.
Service-Quality Model*
Consumer
Word-of-mouth
communications
Past experience
Expected service
Gap 5
Gap 1
Marketer
Personal needs
Perceived service
Service delivery (including
pre- and post-contacts)
Gap 3
External
communiGap 4 cations to
consumers
Translation of perceptions
to service-quality specifications
Gap 2
Management perceptions
of consumer expectations
Three Major Reasons for Gap 3 Problem
1) Channel Conflict over (a) Objectives and
Performance, and (b) Costs and Rewards.
2) Difficulty Controlling Quality and Consistency
across Different Channels/Stores
3) Tension between Empowerment and Control
of Channel.*
5. Effective Service Delivery Strategy
through Intermediaries
1) Control Strategies: Measurement and
Review  Reward/Punishment (Carrot
versus Stick)
2) Empowerment Strategies: Problem Solving
and Support.
My Prediction: The more service-intensive your business is,
the better it is to delegate and empower front line employees
6. Additional Perspectives
Important considerations for developing &
operating marketing channels for services
1. Channel Flows
2. Channel Structure
3. Franchised Channels
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Channel Flows for Services
• 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.
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Channel Structure for Services
• Channel level for services: Zero?
• Distribution intensity: scalable
• Ownership and function
(type of intermediaries): Pre-sale
and Post-sale  multichannel
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Franchised Channels for
Services
Business format franchising can give the
service provider the potential to reap benefits:
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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
www.worldfranchising.com
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