Chapter 17Major Topics for Ch. 17Five Characteristics of ServicesImplications of Service Characteristics for Channel Management*Intangibility of Services & Channel ManagementInseparability of Services & Channel ManagementVariability of Services & Channel ManagementPerishability of Services & Channel ManagementCustomer Involvement & Channel Management*Slide 10Slide 11Service-Quality Model*Three Major Reasons for Gap 35. Effective Service Delivery Strategy through Intermediaries6. Additional PerspectivesChannel Flows for ServicesChannel Structure for ServicesFranchised Channels for ServicesChapter 17Chapter 17Marketing Channels for Services1717Major Topics for Ch. 17•Characteristics of Services and Implications**•Focus of Service Marketing Channel**•Key Service Intermediaries*•Source of Service Distribution Problem*•Service Delivery Strategy•Additional Issues1717Five Characteristics of ServicesFive Characteristics of Services•TheThe intangibility intangibility of servicesof services•The The inseparabilityinseparability of services from of services from service providersservice providers•The difficulty of standardizing The difficulty of standardizing services services  variabilityvariability•The The perishabilityperishability of services of services•The higher degree of The higher degree of customer customer involvementinvolvement in services in services1717Implications of Service CharacteristicsImplications of Service Characteristicsfor Channel Management*for Channel Management*• Intangibility & Channel Management• Inseparability & Channel Management• Variability of Services & Channel Management• Perishability of Services & Channel Management• Higher Customer Involvement & Channel Management1717Intangibility of Services & Intangibility of Services & Channel ManagementChannel ManagementMarketing channels provide the most direct & potent basis for making a service more tangible.The customer is directly exposed to and experiences the service provided by the channel.Why?1717Inseparability of Services & Inseparability of Services & Channel ManagementChannel ManagementService provider does not havethe “safety net” available to the product manufacturerAll aspects of the marketing channel with which the consumer comes into contactare thus a reflection of the quality of the service.Why?1616Variability of ServicesVariability of Services& Channel Management& Channel ManagementIn the case of franchises, it is difficult for the channelmanager to get the franchisees to deliver aconsistent level of service. Why?Human behavior isoften involved in providing services.Perishability of ServicesPerishability of Services& Channel Management& Channel Management1717The channel must be designed so as to connectas efficiently as possible those providing theservice with those desiring to obtain it.Why?Design should maximize the sale of service during its limited exposure to the target market.Ex) Temporary Jobs1717Customer Involvement & Customer Involvement & Channel Management* 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 thecustomer in order to be performed successfully.Ex) Co-creation; market segmentation(High vs. Low involvement): Medical Care2. Focus of Service Channel*: Identifying ways to bring the customer and service provider together.Ex) E-bay3. 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 principal (service provider).Service-Quality Model*Service-Quality Model*Personal needsExpected servicePerceived serviceService delivery (includingpre- and post-contacts)Management perceptionsof consumer expectationsPast experienceWord-of-mouthcommunicationsExternalcommuni-cations toconsumersTranslation of perceptionsto service-quality specificationsMarketerGap 2Gap 3Gap 4Gap 5ConsumerGap 1Three Major Reasons for Gap 3 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 Intermediaries1) 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 employees17176. Additional Perspectives6. Additional Perspectives1. Channel Flows2. Channel Structure3. Franchised ChannelsImportant considerations for developing &operating marketing channels for services1717Channel Flows for ServicesChannel Flows for Services• Flows that “carry” the service through thechannel are those of information,negotiation, & promotion.• Many can be handled electronically,with the role of technology becomingeven greater in the future.Channel Structure for ServicesChannel Structure for Services1717•Channel level for services: Zero? •Distribution intensity: scalable •Ownership and function (type of intermediaries): Pre-sale and Post-sale  multichannelFranchised Channels for Franchised Channels for ServicesServices1717Business format franchising can give theservice provider the potential to reap benefits: •the scale of economies of a large organization•the entrepreneurial drive & motivationassociated with independently owned businesses•the degree of control necessary to fosterstandardization in services offered by the individual franchised