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Distribution

The document discusses distribution and delivery options for services. There are three main types of interactions between customers and service firms: customers going to the provider, providers going to customers, and interactions at arm's length via technology. Services are also categorized as being directed at people or possessions, and being tangible acts or intangible acts. The document then covers factors involved in decisions about place and time of delivery for services, as well as the impact of technology and e-commerce. Internationalization of services is also discussed.

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53 views13 pages

Distribution

The document discusses distribution and delivery options for services. There are three main types of interactions between customers and service firms: customers going to the provider, providers going to customers, and interactions at arm's length via technology. Services are also categorized as being directed at people or possessions, and being tangible acts or intangible acts. The document then covers factors involved in decisions about place and time of delivery for services, as well as the impact of technology and e-commerce. Internationalization of services is also discussed.

Uploaded by

rahuljha11088
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Distribution- Place Decision

Applying the Flow Model of


Distribution to Services
Distribution embraced three interrelated elements

• Information and promotion flow- Distribution of information or promotional


material relating to service offer

• Negotiation flow- Reaching on agreement on service features & terms of offer

• Product flow
Options for Service Delivery
There are 3 types of interactions between customers and service
firms
• 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.)
Here the nature of service is considered
• People Processing
• Possession Processing
• Mental Stimulus Processing
• Information Processing
Four Categories of Services
Nature of the Who or What is the Direct Recipient of the
Service Act Service?
DIRECTED AT PEOPLE DIRECTED AT POSSESSIONS

TANGIBLE People Processing Possession Processing


ACTS
e.g., airlines, hospitals, e.g., freight, repair,
haircutting, restaurants cleaning, landscaping,
hotels, fitness centers retailing

INTANGIBLE Mental Stimulus Information Processing


ACTS
Processing

e.g., broadcasting, e.g., accounting, banking,


consulting, insurance, legal, research
education, psychotherapy
Decision about place & time
• Locational constraints
• Ministores
• Locating in multipurpose Facilities
Place vs. Cyberspace
 Place - customers and  Required for people processing
services
suppliers meet in a  Offers live experiences, social
physical environment interaction, e.g., food services
 More emphasis on eye-catching
servicescape, entertainment

 Ideal for info-based services


 Saves time
 Cyberspace - customers
 Facilitates information gathering
and suppliers do business  May use express logistics service
electronically in virtual to deliver physical core products
environment created by
phone/internet linkages
Technology Revolutionizes Service
Delivery: Some Examples
• Smart mobile telephones to link users to
Internet
• Automated kiosks for self-service (e.g. bank
ATMs)
• Web sites
– provide information
– take orders and accept payment
– deliver information-based services
E-Commerce:
Factors that Attract Customers to
Virtual Stores
• Convenience (24-hour availability, save time,
effort)
• Ease of obtaining information on-line and
searching for desired items
• Better prices than in bricks-and-mortar stores
• Broad selection
Franchising
Franchising is a fast growth strategy, when

• Resources are limited


• Long-term commitment of store managers is
crucial
• Local knowledge is important
• Fast growth is necessary to pre-empt
competition
Service Process and Market Entry
People Processing Services
Export the service concept
Import customers
Possession Processing Services
Most require an ongoing local presence, whether it is the
customers dropping off items or personnel visiting customer
sites

Information Based Services


Export the service to a local service factory
Import customers
Export the information via telecommunications and
transform it locally
Barriers to International Trade in
Services
• Operating successfully in international markets
remains difficult for certain services despite
control relaxations
• 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)
Forces for Internationalization

•Market drivers
•Competition drivers
•Technology drivers
•Cost drivers
•Government drivers
Impact will vary by service
type (people, possessions,
information)
Modes of Internationalization

 Export information-based services


 transmit via electronic channels
 store in physical media, ship as merchandise

 Use third parties to market/deliver service concept


 licensing agents
 brokers
 franchising
 alliance partners

 Control service enterprise abroad


 direct investment in new business
 buyout of existing business

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