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Services Marketing Wk 5 Notes

by: Megan Angelo

Services Marketing Wk 5 Notes MKTG - 45082 - 001

Marketplace > Kent State University > Marketing > MKTG - 45082 - 001 > Services Marketing Wk 5 Notes
Megan Angelo

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Chapter 5 Distributing Services through Physical and Electronic Channels
Services Marketing
Eileen Bridges
Class Notes
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This 6 page Class Notes was uploaded by Megan Angelo on Monday September 26, 2016. The Class Notes belongs to MKTG - 45082 - 001 at Kent State University taught by Eileen Bridges in Fall 2016. Since its upload, it has received 2 views. For similar materials see Services Marketing in Marketing at Kent State University.


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Date Created: 09/26/16
Chapter 5 Distributing Services through Physical and Electronic Channels 5.1 Distribution in a Services Context 5.2 Distribution Options for Serving Customers 5.3 Place and Time Decisions 5.4 Delivering Services in Cyberspace 5.5 The Role of Intermediaries 5.6 Distributing Services Internationally • 5.1 Distribution in a Services Context In a services context, we often “move nothing” – there is no need for physical distribution • Experiences, performances and solutions are not physically shipped or stored, although some related tangibles might be • More and more informational transactions are conducted through electronic, not physical, channels • 5.2 Distribution Options for Serving Customers: Determining the Type of Contact Customers visit service site – Convenience of service locations and operational schedules are important when a customer has to be physically present • Service providers go to customers – Unavoidable when object of service is immovable – Often needed for remote areas – Greater likelihood of visiting corporate customers than individual consumers • Service transaction is conducted remotely – May require logistics and telecommunications • For complex and high-perceived risk services, people typically prefer personal channels • Consumers with greater confidence and knowledge about a service or channel tend to use impersonal and self-service channels • Customers who are more technology savvy typically prefer remote, self- service channels • Customers with social motives tend to use personal channels • Convenience is a key driver of channel choice 5.3 Place and Time Decisions Places for Physical Service Delivery (1) • Mini-stores – Create many small service factories to maximize geographic coverage ○ Automated kiosks – Separating front and back stages of operation ○ Fast food – Purchasing space from another provider in complementary field ○ Cosmetics counters in department stores • Locating in Multipurpose Facilities – Proximity to where customers live or work ○ Service stations • Cost, productivity and access to labor are key issues when locating a service facility • Locational constraints – Operational requirements ○ Airports – Geographic factors ○ Ski Resorts – Need for economies of scale ○ Hospitals • Traditionally, services were geographically constrained, and schedules were restricted, with availability limited to daytime hours • Today – More flexible, responsive service operations: ○ 24/7 service – 24 hours a day, 7 days a week, around the world 5.4 Delivering Services in Cyberspace Distribution of Supplementary Services in 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 has reached very sophisticated levels in global service industries (e.g., hotels, airlines, car rental companies) Figure 5.14 • Technological Innovations – Development of “smart” mobile phones, PDAs, and Wi-Fi high-speed Internet technology that links users to Internet from almost anywhere – Voice-recognition technology – Smart cards ○ Store detailed information about the customer ○ Act as electronic purse containing digital money • Electronic channels can be offered together with physical channels, or take the place of physical channels • What factors lure customers to virtual stores? – Convenience – Ease of search – Broader selection – Potential for better prices – 24-hour service; prompt delivery • Recent developments link websites, customer relationship management (CRM) systems, and mobile telephony • Mobile devices can be used to help consumers: – Access services – Alert them to opportunities/problems – Update information in real time 5.5 The Role of Intermediaries Sharing Responsibilities For Supplementary Service (Figure 5.19) • Popular way to expand service delivery; lower monetary investment than expansion of company-owned and managed sites • Franchisor provides training, equipment and support marketing activities to franchisees • Growth-oriented firms may like to franchise because franchisees are motivated for success • There is significant attrition among franchisors in the early years • 33% of all systems fail within first 4 years • 75% of all franchisors cease to exist after 12 years • Disadvantages of franchising • Loss of control over service delivery • Effective quality control, important but difficult • Conflict may occur between franchisees • Alternative: license another supplier to act on the original supplier’s behalf to deliver core product, e.g. • Banks and airlines selling insurance products 5.6 Distributing Services Internationally How to Enter International Markets? (Figure 5.22)


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