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MKT 346: Marketing of ServicesDr. Houston
Chapter 5:Distributing ServicesThrough Physical
and Electronic Channels
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Distribution in a Services Context
In a services context, we often do not move anything
Experiences, performances and solutions are not beingphysically shipped and stored
More and more informational transactions areconducted through electronic rather than physicalchannels
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Distribution Options forServing Customers
Customers visit service site
Service providers go to customers
Service transaction is conducted remotely
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Six Options For Service Delivery(Table 5.1)
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Channel Preferences Vary Among Customers
Personal channels
Impersonal and self-service channels
Convenience is a key driver of channel choice
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Places of Service Delivery
Key customer concerns
Key back stage concerns
Constraints
Operational
Geographic
Need for economies of scale
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Time of Service Delivery
Traditional schedules were/are restrictedDay time only
40-50 hours a week
Contemporary schedules must be flexible andresponsive
24/7/365 service
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Distribution of Supplementary Servicesin Cyberspace
Five of the supplementary services are information-based
These services can all be distributed electronically:
Information
Consultation
Order-taking
Billing
Payment
Distribution of information, consultation and order-taking hasreached very sophisticated levels in global service industries(e.g., hotels, airlines, car rental companies)
f d h l
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Information and Physical Processesof Augmented Service Product (Fig 5.11)
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Service Delivery InnovationsFacilitated by Technology
Technological Innovations
Mobile smart phones and WiFi
Voice-recognition technology
(Interactive) web sitesSmart cards
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E-Commerce: Move to Cyberspace
Key factors luring customers to virtual stores:
Convenience
Ease of search
Broader selectionPotential for better prices
24-hour service with prompt delivery
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E-Commerce: Recent Developments
Integration of service delivery infrastructure:websites
customer relationship management (CRM) systems
mobile telephony
Integration of mobile devices:Improves access to services
Alert customers to opportunities/problemsUpdates information in real time
D It M k S t O t
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Does It Make Sense to OutsourceSupplementary Services?
Is it cost-effective?What new challenges does it present?
Splitting Responsibilities
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Splitting ResponsibilitiesFor Supplementary Service Elements (Fig. 5.16)
Chal leng es for or iginal supp l ier : Act as guardian of overal l process
Ensu re that each e lement offered b y interm ediar ies f i t s overal l service conc ept
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Franchising
Popular way to expand delivery of service concept
Smaller monetary investment
Franchisor provides:
trainingequipment
support marketing activities
Franchisees:invest time and finance
follow copy and media guidelines of franchisor
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Franchising
Disadvantages of franchising
Some loss of control over delivery system
Some loss of control over how customers experienceactual service
Effective quality control is important but yet difficult
Conflict between franchisees may arise
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MKT 346 Key Concepts: Chapter 5
Distribution in services often involve moving nothing and many
information-based services can be distributed electronicallyOptions for service delivery include:
Customers visit the service site
Service providers go to their customers
Service transaction is conducted remotely
Channel preferences vary among customers
Place and time decisions include where and when services should bedelivered in bricks-and-mortar context
Delivery in cyberspace is facilitated by technology and e-commerce
Intermediaries play roles in distributing servicesFranchising brings both advantages and disadvantages to the firm