1. Chapter 17
Marketing Channels for Services

2. Major Topics for Ch. 17 17
Characteristics of Services and Their Implications**
Focus of Service Marketing Channel**
Key Service Intermediaries*
Key Source of Service Distribution Problem*
Service Delivery Strategy
Additional Issues

3. Five Characteristics of Services*17
The intangibility of services
The inseparability of services from service providers
The difficulty of standardizing services  variability
The perishability of services
The higher degree of customer involvement in services

4. Implications of Service Characteristics for Channel Management*17
Implications of Service Characteristics for Channel Management*
• Intangibility & Channel Management
• Inseparability & Channel Management
• Variability of Services & Channel Management
• Perishability of Services & Channel Management
Higher Customer Involvement & Channel Management

5. Intangibility of Services & Channel Management17
Intangibility of Services & Channel Management
Marketing channels provide
the most direct & potent basis
for making a service more tangible.
Why?
The customer is directly exposed to and
experiences the service provided by the channel.

6. Inseparability of Services & Channel Management17
Service provider does not have
the “safety net” available to the product manufacturer
Why?
All aspects of the marketing channel with
which the consumer comes into contact
are thus a reflection of the quality of the service.

7. Variability of Services & Channel Management16
In the case of franchises, it is difficult for the channel
manager to get the franchisees to deliver a
consistent level of service.
Why?
Human behavior is
often involved in providing services.

8. Perishability of Services & Channel Management17
The channel must be designed so as to connect
as efficiently as possible those providing the
service with those desiring to obtain it.
Why?
Design should maximize the sale of service during its limited exposure to the target market.
Ex) Temporary Jobs

9. Customer Involvement & Channel Management*17
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 the
customer in order to be performed successfully.
Ex) Co-creation;
market segmentation(High vs. Low involvement): Health Care

10. 3. Three Key Service Intermediaries*:
2. Focus of Service Channel*: Identifying ways to bring the customer and service provider together.
Ex) E-bay
3. Three 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,.)
product/trade name franchising

11. 4. A Key Source of Service Distribution Problems*:
Gap 3: (Actual) Service delivery does not meet the specifications of the service provider.

12. Service-Quality Model*
Word-of-mouth
communications
Personal needs
Past experience
Expected service
Consumer
Gap 5
Perceived service
Gap 1
Service delivery (including
pre- and post-contacts)
External
communi-
cations to
consumers
Gap 4
Gap 3
Marketer
Translation of perceptions
to service-quality specifications
Gap 2
Management perceptions
of consumer expectations 11

13. Three Major Reasons for Gap 3 Problem
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.*

14. 5. Effective Service Delivery Strategy through Intermediaries
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 employees

15. 6. Additional Perspectives17
Important considerations for developing &
operating marketing channels for services
Channel Flows
Channel Structure
Franchised Channels

16. Channel Flows for Services17
• Flows that “carry” the service through the
channel are those of information,
negotiation, & promotion.
• Many can be handled electronically,
with the role of technology becoming
even greater in the future.

17. Channel Structure for Services17
Channel level for services: Zero?
Distribution intensity: scalable
Ownership and function
(type of intermediaries): Pre-sale
and Post-sale  multichannel

18. Franchised Channels for Services17
Business format franchising can give the
service provider the potential to reap benefits:
the scale of economies of a large organization
the entrepreneurial drive & motivation
associated with independently owned
businesses
the degree of control necessary to foster
standardization in services offered by the
individual franchised units