Services distributions
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This document discusses different methods for distributing services, including direct delivery by the service producer and delivery through intermediaries. Direct delivery allows the service producer to directly provide services to customers but intermediaries like franchises, agents, and brokers also deliver services using processes developed by the producer. Common intermediaries are franchises, which license a service format, and agents or brokers who connect buyers and sellers. Electronic channels provide an alternative to direct human interaction for service distribution.
Services distributions
- 1. 14-1 Services DistributionsServices Distributions –– Distribution ChannelDistribution Channel Presented By – Ankur KumarPresented By – Ankur Kumar
- 2. 14-2 Service DistributionService Distribution Direct Delivery Of Service. Delivery of Service through Intermediaries
- 3. 14-3 Direct Delivery of ServiceDirect Delivery of Service • Services are generally intangible & experimental in nature. • It allows the service principal (service producer) to deliver the service directly to the customer. • Example-IBM Global Services.
- 4. 14-4 Delivery of Service throughDelivery of Service through IntermediariesIntermediaries • Intermediaries often deliver services & perform several imp. functions for service principals (service producer). • Services such as haircutting, dry cleaning, etc are produced by the intermediaries (the franchisee) using the process developed by the service principal. • The primary types of intermediaries used in service delivery are franchises, agents, brokers and electronic channels.
- 5. 14-5 Direct or Company–OwnedDirect or Company–Owned ChannelsChannels • In this services are distributed directly from provider to the customer. • Some of these are local services–doctors, dry cleaners and hairstylists (their area of distribution are limited). • Others are national chains with multiple outlets but are considered direct channels because the provider owns all the outlets. • Example- Starbucks, the popular chain of coffee shops in United States.
- 6. 14-6 Advantages & DisadvantagesAdvantages & Disadvantages • The company has the complete control over the outlets and can maintain consistency in service provision. • Standards can be established & will be carried out as planned as the company itself monitors & rewards proper execution of the service. • A final benefit of the company-owned channels is that the company owns the customer relationship.
- 7. 14-7 Advantages & DisadvantagesAdvantages & Disadvantages • The company must bear all the financial risk. • When expanding, the firm must find all the capital. • Partnering or joint venture is almost always preferred to company-owned channels.
- 8. 14-8 Channel as PartnershipChannel as Partnership CooperationCollaboration Relationship Marketing Coordination
- 9. 14-9 FranchisingFranchising FranchisingFranchising Most common type of distribution in services Most common type of distribution in services Franchising is a relationship or partnering in which the service provider– the franchiser-develops & optimizes a service format that it licenses for delivery by other parties- the franchisees Franchising is a relationship or partnering in which the service provider– the franchiser-develops & optimizes a service format that it licenses for delivery by other parties- the franchisees
- 10. 14-10 Agents And BrokersAgents And Brokers • An Agent is an intermediary who acts on behalf of a service principal (such as real estate agent) or a customer and is authorized to make agreements between the principal and the customer. • A Broker is an intermediary who brings buyers and sellers together while assisting in negotiation. Brokers are paid by the party who hired them, rarely become involved in financing or assuming risk and are not long- term representatives of buyers or sellers. • Examples- Real estate brokers, Insurance brokers, Security brokers. • An Agent is an intermediary who acts on behalf of a service principal (such as real estate agent) or a customer and is authorized to make agreements between the principal and the customer. • A Broker is an intermediary who brings buyers and sellers together while assisting in negotiation. Brokers are paid by the party who hired them, rarely become involved in financing or assuming risk and are not long- term representatives of buyers or sellers. • Examples- Real estate brokers, Insurance brokers, Security brokers.
- 11. 14-11 Electronic ChannelsElectronic Channels • Electronic channels are the only service distributors that do not require direct human interaction. • Examples- Telephone, Television channels, Internet and Web. • Electronic channels are the only service distributors that do not require direct human interaction. • Examples- Telephone, Television channels, Internet and Web.
- 12. 14-12 BenefitsBenefits • Consistent Delivery for standardized services. • Low Cost. • Customer Convenience. • Wide distribution. • Customer choice and ability to customize • Quick Customer feedback • Consistent Delivery for standardized services. • Low Cost. • Customer Convenience. • Wide distribution. • Customer choice and ability to customize • Quick Customer feedback
- 13. 14-13 ChallengesChallenges • Price Competition. • Changes in Consumer Behavior. • Security Concerns. • Refusal to deal. • Exclusive Territory. • Price Competition. • Changes in Consumer Behavior. • Security Concerns. • Refusal to deal. • Exclusive Territory.