Distributing services ref lovelock introduction In a services

Distributing services ref: lovelock

introduction • In a services context, we often move nothing unlike products n boxes • Experiences, performances and solutions are not being physically shipped and stored • The service must be made available to the customer for consumption in right quantity, in right time and at right location

what When Foundation of DS for services Wher e How

interrelated Flow Model of Distribution to Services Distribution embraces three interrelated elements: • Product flow – People procession n possession processing – To develop a network of local sites/offices – distant education, consultant, internet banking • Information and promotion flow – To get customer interested in buying the service ie the service offer – travel plan, day care facility, pet care saloons • Negotiation flow – To sell the right to use a service – Reservation system

Four Categories of Services Employing Different Underlying Processes What is the Nature of the Service Act? TANGIBLE ACTS INTANGIBLE ACTS Who or What is the Direct Recipient of the Service? DIRECTED AT PEOPLE People Processing e. g. , airlines, hospitals, haircutting, restaurants hotels, fitness centers Mental Stimulus Processing e. g. , broadcasting, consulting, education, psychotherapy DIRECTED AT POSSESSIONS Possession Processing e. g. , freight, repair, cleaning, landscaping, retailing, recycling Information Processing (directed at intangible assets) e. g. , accounting, banking, insurance, legal, research

Distinguishing between Distribution of Supplementary and Core Services • Core services for people processing and possession processing services require physical locations • Core services for mental stimulus processing and information processing can be distributed electronically • Supplementary services can be tangible or intangible in nature; latter can be distributed via nonphysical channels – Telephone – Internet

• Going for vacation to Singapore on holiday and living in Hyatt will only be consumed by being into that resort • Supplementary services are informational – Distributed through cost effective manner – Holiday customer cud be informed through agentface to face, telephonically, online, mail. – payment

Information and Physical Processes of Service Product Information processes Information Consultation Payment Billing Core Exceptions Ordertaking Hospitality Safekeeping Service flower Physical processes

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

Use of intermediateries • creator of service(service principal)- sells directly • Services cannot be owned=can be passed along a delivery channel • Types: – Franchisees – Agents – Brokers – Electronic channel

SERVICE OUTPUTS • Services provided by the channel members are Spatial convenience Lot sizes Waiting time Assortment breath

• SPATIAL CONVENIENCE: – Makes it easy for the customer to procure the product thus increasing customer satisfaction. Eg ATMS opened by SBI. • LOT SIZES: – Allows the user to buy a service in lot sizes that are consistent with their demand reducing the storage cost. (corporates booking tickets in bulk)

• WAITING TIME: – Reduces the waiting time by cutting the time period because the purchase need not be planned in advance. (online ticket booking) • ASSORTMENT BREADTH: – Greater is the breadth or variety available to customer more is the service provided by the channel.

Flow of services • service principal TO service consumer • service principal TO Agent/ broker TO Service Franchisee TO Electronic Channel service consumer

• Distribution through company owned outlets – Postal services, insurance, banks, doctors, – Implication • Control, consistency, image maintenance • Franchising – Works for standardized services, who completely duplicate the entire delivery process – God gym, dr. lal path labs

• Agents &Brokers: – An intermediatory authorized to act and negotiate on the behalf of the service principal – They do not take the title of the services. – Tarvel agents, insurance agents – Major challenge: • Loss of control over prices • Representation of multiple service principals

• Electronic channel: – Transformed every aspect of life – Distance learning, video conferencing, IVR, money tranfers

Strategies for channel management Control strategies Strategies Partnership strategies Empowerment strategies

• Control strategy: – Service principal creates standard measurement programs – Punishment strategies-termination, non renewals • Empowerment strategy: – Service principal is new or lacks sufficient power t govern the channel – Comprehensive information is provided – H&R Block (tax preparation company in the United States) • Partnering Strategies: – (Taco John)

CHANNEL OPTIONS INTENSIVE DISTRIBUTION • EXCLUSIVE DISTRIBUTION SELECTIVE DISTRIBUTION

Options For Service Delivery (Table 5. 1) Another way to look at it: Can a service provider add or change the service outlet structure to increase sales/add convenience? Examples: Movie Rentals / Electric Power / Food / Education Read online article: Houston Aims to be Electric Car Capital Feb. 16, 2010 Source: http: //news. cnet. com/8301 -11128_3 -10454610 -54. html? tag=n

INTENSIVE DISTRIBUTION • Placing product / service in maximum possible outlets. • Focuses on logistical convenience i. e willingness to spend time and effort to buy the product is minimum. • Eg mobile prepaid cards. atms

EXCLUSIVE DISTRIBUTION • Product/ services are distributed through a very limited number of outlets. • Total market is divided into number of submarkets or areas where only one or few exclusive distribution points are used to service the areas. • Followed by highly specialized and non substitutable services. • Eg: PGI.

SELECTIVE DISTRIBUTION • It makes use of more than few intermediaries , but less than all those who can carry the products or services. • When the full coverage of the market is not desires. • Eg Bulls eye

SERVICE DISTRIBUTION STRATEGY • MULTISITE STRATEGY: • Involves repeating the same model and formula at other location. • Used for services which have gained acceptability in the market. • For firms with limited service offering and high degree of task and procedure standardization. • SUFFERS FROM: • Lack of control • Escalating Cost at different sites

MULTI SERVICE STRATEGY • Growth by multiplication of services. • When the firm becomes an accepted service brand enjoy considerable equity, leveraging equity to sell other brands become attractive growth options. • Suitable for those service providers that compete on functional quality and offer customised services.

MULTI SEGMENT STRATEGY • The services offered remain more or less constant , where as the market segment served varies. • The service firm targets its services to new customer segment from its present location.