Service distribution flows
This document discusses distribution strategies for services. It explains that for services there is often nothing physical to distribute, unlike physical goods. However, distribution of services still involves three flows: information/promotion, negotiation, and product. The product flow involves delivering the service experience, which may require physical facilities for some services like healthcare, or can be delivered electronically for other services. The document discusses that a key consideration is whether customers need direct physical contact for the service or if it can be delivered at a distance. It introduces three main distribution options for services and notes the importance of distinguishing core and supplementary services when determining a distribution strategy.
Service distribution flows
- 1. TYBBA SEM 5 PLACE: Service Distribution Prof: Ajay Shukla ROFEL BBA
- 2. • WHAT IS BEING DISTRIBUTED? • If you mention distribution, many people will likely think of moving boxes through physical channels to distributors and retailers for sale to end-users. • In services though, often there is nothing to move. Experiences, performances, and solutions are not physically shipped and stored. • Meanwhile, informational transactions are increasingly conducted via electronic channels. How then does distribution work in a services context? In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the question of what is being distributed:
- 3. • Information and promotion flow — distribution of information and promotion materials relating to the service offer. The objective is to get the customer interested in buying the service.
- 4. • Negotiation flow — reaching an agreement on the service features and configuration, and the terms of the offer, so that a purchase contract can be closed. The objective is often to sell the right to use a service (e.g., sell a reservation or a ticket).
- 5. • Product flow— many services, especially those involving people processing or possession processing, require physical facilities for delivery. Here, distribution strategy requires development of a network of local sites. For information- processing services, such as Internet banking and distance learning, the product flow can be via electronic channels, employing one or more centralized sites.
- 6. HOW SHOULD A SERVICE BE DISTRIBUTED? • Be familiar with how services can be distributed using three main options, and understand the importance of distinguishing between distributing core and supplementary services.
- 7. • How should services be distributed? Here, a key question is: Does the service or the firm’s positioning strategy require customers to be in direct physical contact with its personnel, equipment, and facilities? (As we saw, this is unavoidable for people-processing services, but may not be necessary for other categories.) • If so, do customers have to visit the facilities of the service organization, or will the service organization send personnel and equipment to customers’ own sites? • Alternatively, can transactions between provider and customer be completed at arm’s length through the use of either telecommunications or physical channels of distribution?
- 8. • (The three possible options will discuss in next video shows the first column of Table For each of these three options, should the firm maintain just a single outlet or offer to serve customers through multiple outlets at different locations?
- 9. • Will continuee….. Keep Learning