Distribution Strategies Service Industry

Distribution Is the availability and accessibility of a service to consumers Implications for businesses Increase technology HR issues- hours of operations Channel structure

Channel Structure Structure performs 4 functions Information provision Booking/reservation/ Consumption->Payment Payment->Consumption Implications :What to own and what to lease

Channel Structure Direct Channel Indirect Channel Completely own s the structure Indirect Channel Partly owned, partly through intermediaries Eg:Airlines

Channel Options Exclusive Distribution Selective Distribution Intensive Distribution Multi channel Distribution

Channel Intermediary management Advent of technology has introduced multi channel distribution. Strategy has to choose between cost effectiveness and reach Channel Squeeze effect on intermediaries is intense *How should businesses re equip themselves in today’s multi channel structure?

Distribution Growth Strategy New Old Multi Service Str Diversification Service offering Current serv str Multi site/Multi segment Location/Mkt Segment Old New

Multi Service Strategy Adding peripheral services to core service model Eg:Adding a spa to a beauty salon Adding a watch repair center to the showroom

Service Diversification Introducing a new Core service Jet airways starting a hotel group

Benefits Multi Site: Multi Service Rapid Expansion Fast Sales growth Relatively easy to manage Multi Service Serving current customers better Can gain new customers Sales growth without expanding to new facilities

Benefits… Multi Segment : Better utilization of current resources Sales growth without expanding to new facilities

Expanding to International Markets Direct Export Using local resources to perform service abroad Call centers Joint Venture Merger of local and foreign partner Licensing Selling licenses to use the brand name Franchising Sells franchise operations to local partners FDI Direct investment

Franchising Franchisor Franchisee Advantages Disadvantages

Deciding on Distribution Structure Control decisions Centralized or Decentralized Economies of scale Nature of business Growth objectives Capital Investment HR issues

Distribution structure strategy and channel structure Standard Chartered Bank Jet Airways Starbucks -US and globally Amazon Apollo Hospitals Define core service, periphery service Extensive or intensive Structure