CH5: Distributing Services Through Physical and Electronic Channels

CH5: Distributing Services Through Physical and Electronic Channels

1. Distribution in a Service Context

   • Movement through electronic & no physical channels
     • No physical movement
     • No physical storage
   • 3 Elements
     • 1. Information and promotion flow
     • 2. Negotiation flow
     • 3. Product flow
   • Distribution of:
     • Supplementary services
       • Many are informational
         • Can be distributed widely via
           • Telephone
           • Internet
             • Using website for service delivery
               • Core
                 • Information
                 • Consultation
                 • Order-taking
                 • Hospitality
                 • Safekeeping
                 • Exceptions
                 • Billing
                 • Payment
     • Core services
       • Require physical locations

2. Options for Service Delivery

   • 6 Options for Service Delivery
     • Single Site
       • Customer goes to service
       • Service comes to customer
       • Customer and service organization transact remotely
     • Multiple Site
   • For
     • Complex & High perceived risk
       • People tend to rely on personal channels
         • Customers w/social motives
     • Greater confidence and knowledge
       • Impersonal and self-service channels

3. Place & Time Desicions

   • Cost, productivity and access to labor
     • Determinants to locating a service facility
   • Location constraints
     • Operational requirement
     • Geographic factor
     • Need for economies of scale
   • Ministores
     • Maximize geographic coverage
       • Separating front & back stages of operation
         • Purchaising space from another provider in complementary field
   • Multipropose facilities
     • Proximity where customers live/work
       • Service stations
       • Service perspectives
   • Schedules were restricted
     • Then
       • Daytime
         • 40-50 hrs a week
     • Now
       • Flexible
         • Responsive
           • 24/7
             • Worldwide

4. Delivering Services in Cyberspace

   • Facilitated by technology
     • e-Commerce
       • 24/7 delivery
       • Saves time & effort

5. The Role of Intermediaries

   • Franchising
     • Advantage
       • Expansion w/o high level of monetary investment
       • Ensure good customer service and high quality service operation
     • Disadvantage
       • Loss of control of delivery, experience and actual service
       • Quality control difficult
       • Conflict between franchises
     • License

6. The Challenge of Distribution in Large Domestic Markets

   • Distributing services
     • Distances involved
     • Multiple time zones
     • Multiculturalism
     • Differences in laws and tax rates

7. Distributing Services Internationally

   • Barriers
     • Restrictions
     • Heavy taxaction
     • Legal restrictions
     • Lack of broadly agreed upon accounting standards
     • Cultural issues
   • Drivers
     • Competition
     • Market
     • Technology
     • Cost
     • Government
   • Export/import