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Marketing Channels for Services

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Chapter 17 Marketing Channels for Services Characteristics of Services Characteristics of Services that Distinguish them from Products The intangibility of services ... – PowerPoint PPT presentation

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Title: Marketing Channels for Services


1
Chapter 17
  • Marketing Channels for Services

2
The Importance of Services
17
Objective 1
The services sector of the economy is more than
twice the size of the manufacturing sector.
Services account for more than half of
all consumer expenditures.
Almost 80 of all new jobs created over the past
10 years have been in the service sector.
3
Services Marketing Objectives
Objective 2
17
Services Marketing Objectives Product
Marketing Objectives
  • Offer services (or products) that are
  • targeted to meet customer demand
  • Present services (or products) to customers
  • so as to maximize their appeal.

4
Characteristics of Services
17
Objective 3
  • Characteristics of Services that
  • Distinguish them from Products
  • The intangibility of services
  • The inseparability of services from service
    providers
  • The difficulty of standardizing services
  • The high degree of customer involvement in
    services
  • The perishability of services



5
Intangibility of Services

17
Product Consumers have more definite
impressions preferences about physical products
because of their tangibility
Service Much less tangible than physical
products Difficult to differentiate brands
?
6
Inseparability of Services
17
Service Inextricably tied to provider of
service Services produced do not exist as
entities in and of themselves
Product An entity that exists apart from the
manufacturer itself
?
7
Difficulty of Standardization
17

Service More difficult to standardize than
products Variability associated with human
element is much more likely to creep into the
production of services than into the production
of products
Product High degree of standardization found
in advanced industrial societies

?
8
Customer Involvement in Services

17

Product Individual consumers do not play much
of a role in determining the nature of products
manufactured for them. Consumer is involved
only in consumption of product
Service Consumers are more involved in
the production of services than they are in the
production of products.

?
9
Perishability of Services

17

Service Services cannot be produced in
anticipation of customer needs then stored in
inventory until purchased.
Product Products can be inventoried and
stored even the most perishable products.
?
10
Implications of Service Characteristicsfor
Channel Management

17


The relationship between the characteristics of
services the management of marketing channels
includes

Intangibility Channel Management
Inseparability Channel Management Difficulty
of Standardization Channel Management
Customer Involvement Channel Management
Perishability of Services Channel Management
11
Intangibility Channel Management
17
Objective 4





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.
12
Inseparability Channel Management
Objective 5
17
The inseparability of services from the
provider means that the service provider does not
have the safety net available to the product
manufacturer, whereby the product itself can make
up for poor distribution.
Why?
All aspects of the marketing channel with which
the consumer comes into contact are thus a
reflection of the quality of the service.
13
Difficulty of Standardization Channel Management



16





In the case of franchises, it is difficult for
the channel manager to get the franchisees to
deliver a consistent level of service.

Why?
The amount of human involvementbehavior
is often involved in providing services.
14
Customer Involvement Channel Management


Objective 6


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.
15
Perishability of Services Channel Management



17
Objective 7




The channel must be designed so as to connect as
efficiently as possible those providing
the service with those desiring to obtain it.
Why?
Because of the high degree of perishability of
unsold services, design should maximize the sale
of service during its limited exposure to the
target market.
16
Additional Perspectives








17
Objective 8









Important considerations for developing
operating marketing channels for services
  • Shorter Channels
  • Franchised Channels
  • Customization of Services
  • Channel Flows

17
Shorter Channels





17





The direct structure in a short channel
eliminates the challenge of designing a channel
structure in terms of length, intensity,
type of intermediaries at each level the
selection of intermediaries the need to
motivate intermediaries to do an effective job
of selling the product.
18
Franchised Channels





17





  • Using 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

19
Customization of Services
17
Many services provide for a high degree of
customization. For services requiring a high
degree of customization, small-scale channel
consisting of local independent service providers
are likely to continue to play a major role.

20
Channel Flows
17
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 than it
already is.
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