1. SERVICE DELIVERY Marketing of services. UNIT-5 MBA-3 rd Sem-2009-11

2. Topics Distributing service Direct distribution, channel functions, channels selection. Design and layout of service delivery, capacity and demand management.

3. Learning Objectives To understand distribution in service context To understand and explore the options for service Delivery To evaluate various channels of distribution of services To understand the role of intermediaries in service context

4. Topics Distributing service Direct distribution, channel functions, channels selection. Design and layout of service delivery, capacity and demand management.

5. Applying the Flow Model of Distribution to Services Distributing services- in many cases there is nothing tangible to be moved from A to B (e.g. experience, performance, problem solving), So how do we distribute services? Distribution of services embraced three interrelated elements Information and promotion flow Negotiation flow Product flow

6. Distribution for Core & Supplementary Services Many core services require a physical location (especially for People processing and Possession processing types of services) but many supplementary services are information based and can be distributed by other means, to reduce the cost and enhance the efficiency.

7. Information and Physical Processes of the Augmented Service Product Exceptions Billing Payment Information Processes Information Consultation Safekeeping Physical Processes Order- Taking Core Hospitality Use alternative channels e.g. online

8. Using Websites for Service Delivery Safekeeping Track package movements CORE: Use Web to deliver information-based core services e.g. Audible.com Core Consultation Conduct e-mail dialog Use expert systems Order-Taking Make/confirm reservations Submit applications Order goods, check status Hospitality Record preferences Billing Receive bill Make auction bid Check account status Exceptions Make special requests Resolve problems Payment Pay by bank card Direct debit Information Read brochure/FAQ; get schedules/ directions; check prices; rating

9. Determining the Type of Contact: Options for Service Delivery Customer goes to the service provider (or intermediary) Service provider goes to the customer Interaction at arm’s length (via the Internet, telephone, fax, mail, etc.) There are 3 types of interactions between customers and service firms

10. Method of Service Delivery Availability of Service Outlets Nature of Interaction between Customer and Service Organization Single Site Customer goes to service organization Theater Barbershop Service organization goes to customer House painting Mobile car wash Customer and service organization transact at arm’s length Credit card company Local TV station

11. Time & Place When should the service (core and supplementary) be delivered? (i.e. opening hours) Where should the service be delivered?

12. Factors Encouraging Extended Operating Hours (24/7)  Economic pressure from consumers  Changes in legislation  Economic incentives to improve asset utilization  Availability of employees to work nights, weekends  Automated self-service

13. Place vs. Cyberspace  Place - customers and suppliers meet in a physical environment  Offers live experiences, social interaction, e.g., food services  Required for people processing services  More emphasis on eye- catching servicescape, entertainment  Cyberspace - customers and suppliers do business electronically in virtual environment created by phone/internet linkages  Saves time  Facilitates information gathering  May use express logistics service to deliver physical core products  Ideal for info-based services

14. Use of intermediaries to reduce cost As created by originating firm As enhanced by distributor As experienced by customer + Core = Splitting Responsibilities for Delivering Supplementary Services

15. Franchising Resources are limited Long-term commitment of store managers is crucial Local knowledge is important Fast growth is necessary to pre-empt competition (e.g. Starbucks) Franchising is a fast growth strategy, when

16. Service Process and Market Entry People Processing Services –Export the service concept –Import customers –Transport customers to new locations Possession Processing Services –Most require an ongoing local presence, whether it is the customers dropping off items or personnel visiting customer sites –Franchising the service concept Information Based Services (mental stimulus processing or information processing) –Export the service to a local service factory –Import customers –Export the information via telecommunications and transform it locally

17. Barriers to International Trade in Services Operating successfully in international markets remains difficult for certain services despite efforts of the WTO and relaxations of control. Barriers include: –Refusal by immigration offices to issue work permits –Heavy taxes on foreign firms –Domestic preference policies –Legal restrictions –Lack of broadly-agreed accounting standards –Cultural differences (esp. for entertainment industry)

18. Any Questions?