Marketing Channels For Services

Marketing Channels
Part 4: Additional Perspectives on Marketing

Channels
A Management View
8e
Rosenbloom
Part 4: Additional
CHAPTER Perspectives on Marketing Channels 17
17
CHAPTER
Marketing Channels
for Services
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
① The importance of services
② Services marketing objectives

Learning Objectives
③ Characteristics of services
④ Intangibility and channel management
⑤ Inseparability and channel management
⑥ Customer involvement and channel management
⑦ Perishability of services and channel management
⑧ Additional perspectives
©2013
©2013Cengage
CengageLearning. All Rights
Learning. All Reserved.May
Rights Reserved. Maynot
notbebescanned,
scanned, copied
copied or duplicated,
or duplicated, or posted
or posted to a publicly
to a publicly accessible
accessible website,website,
in wholeinorwhole
in part.or in part.
Objective
The Importance of Services
1
1. The services sector of the economy is more

than twice the size of the manufacturing sector.
2. Services account for more than half of all

consumer expenditures.
3. Almost 80% of all new jobs created over the

past 10 years have been in the service sector.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Services Marketing Objectives
2
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Characteristics of Services
3
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
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Intangibility of Services
Service Product
Much less tangible Consumers have more

than physical products
Difficult to differentiate
≠ definite impressions &
preferences about
physical
brands products because of
their tangibility
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Inseparability of Services
Service Product
Inextricably tied to
≠
provider of service An entity that
exists apart from
Services produced do the manufacturer itself
not exist as entities in
and of themselves
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Difficulty of Standardization
Service Product
More difficult to
High degree of
≠
standardize than products
standardization
Variability associated
found in advanced
with human element is
much more likely to industrial societies
creep into the production
of services than into
the production of products
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Customer Involvement in Services
Service Product
Individual consumers
do not play much of a
Consumers are more
role in determining the
involved in the
production of services ≠ nature of products
manufactured for them.
=
than they are in the Consumer is involved
only
production of products.
in consumption of
product
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Perishability of Services
Service Product
Services cannot be Products can be

produced in
anticipation
of customer needs &
≠ inventoried and
stored—
even the most
then stored in perishable products.
inventory
until purchased.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Intangibility &
4 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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Inseparability &
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Customer Involvement &
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Perishability of Services
7 & 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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Objective
Additional Perspectives
8
Important considerations for developing

& operating marketing channels for
services
1. Shorter Channels
2. Franchised Channels
3. Customization of Services
4. Channel Flows
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
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.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Discussion Question #1
Firms of all sizes have developed many kinds of social-
networking tools, instant messaging programs, and text
messaging systems to deal with customer service inquiries.
But a recent survey by American Express Co. found that
almost 90 percent of the respondents said they still want
their inquiries handled by real customer service
representatives in real time over the “old-fashioned”
telephone.
In light of all the new technology available to

customers, why do you think they still prefer the old-
fashioned telephone-based service channel? Discuss.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
OpenTable.com Inc., with more than 13,000 participating
restaurants, is the market leader in online restaurant reservations
service providers. Restaurants pay a monthly fee as well as $1.00 per
head for reservations made by diners through OpenTable.com. But
OpenTable also charges 25 cents per head even if diners make
reservations through the restaurants’ own Web sites. By making
reservations through OpenTable, diners also earn points that can be
redeemed for discount coupons. But there may be a problem with this
seemingly straightforward deal between OpenTable and restaurants
using its services. Some diners claim that if they make their
reservations through OpenTable, the restaurants retaliate for the extra
cost involved by seating diners at inferior table locations and by
providing poor service. OpenTable denies this.
Why would restaurants unhappy with the deal being offered to

them by OpenTable take out their frustration on diners? Discuss.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.
Automated teller machines (ATMs) and, more recently, online
banking, were thought to provide such a valuable service
alternative that customers would need far fewer personal banking
services with human tellers in traditional bank branches. In short,
these new technologies were supposed to reduce drastically the
number of bank tellers and branches. But things did not work out
that way. Between 1995 and 2005 the number of bank branches
grew from 50,000 to 70,000, an increase of 40 percent. The
number of tellers to staff the branches also increased in roughly
the same proportion during this decade. This happened despite
the fact that the number of banking firms actually decreased
dramatically from 10,000 to less than 8,000 during that same
period.
What do you think is going on here? Why do you think so

many consumers still demand “old-fashioned” bank branches and
tellers in spite of new technological alternatives? Discuss.
©2013
©2013Cengage
notbebescanned,
scanned, copied
in wholeinorwhole
in part.or in part.

Marketing Channels For Services

Uploaded by

Copyright:

Available Formats

Marketing Channels For Services

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Marketing Channels For Services

Uploaded by

Copyright:

Available Formats

Marketing Channels

Part 4: Additional Perspectives on Marketing

② Services marketing objectives

④ Intangibility and channel management

⑤ Inseparability and channel management

⑥ Customer involvement and channel management

⑦ Perishability of services and channel management

1. The services sector of the economy is more

2. Services account for more than half of all

3. Almost 80% of all new jobs created over the

1. Offer services (or products) that are

2. Present services (or products) to

• The intangibility of services

Much less tangible Consumers have more

Services cannot be Products can be

• Intangibility & Channel Management

Marketing channels provide

The customer is directly exposed to and

All aspects of the marketing channel with

In the case of franchises, it is difficult for the channel

The amount of human involvement—behavior— is

In a channel containing services such as barbers,

Such services generally require input from the

The channel must be designed so as to connect

Because of the high degree of perishability of unsold services,

Important considerations for developing

The direct structure in a short channel

Using business format franchising can

 The entrepreneurial drive & motivation

 The degree of control necessary to foster

Many services provide for a high

For services requiring a high degree of

Flows that “carry” the service through

Many can be handled electronically,

In light of all the new technology available to

Why would restaurants unhappy with the deal being offered to

What do you think is going on here? Why do you think so

You might also like