Factors Influencing Channel Preferences

Factors Influencing Channel Preferences

• Confidence and Knowledge: Customers comfortable with technology prefer self-service channels like mobile apps and websites for routine transactions.
• Convenience: Customers value channels that save time, energy, and money, offering quick access to services.
• Electronic Channels: Customers demand services that offer electronic solutions for tasks like cash withdrawals, customer service inquiries, and account assistance.
• Pricing Strategy: Customers adapt their channel usage to minimize costs, for example, withdrawing larger sums of cash less frequently to avoid ATM fees.

Strategic and Tactical Location for Service Delivery

• Strategic Location: A long-term perspective, focusing on a central, key location aligning with the organization's overall business strategy, considering factors like market reach, customer accessibility, and competition.
• Tactical Location: Short-term decisions regarding service delivery, focusing on practical and immediate considerations, including temporary service points, pop-up stores, or mobile service centers to respond to specific customer needs or market dynamics.

Considerations for Pricing in Service Marketing

• Customers: Prices should align with perceived value. Higher value services may justify premium prices, but if costs exceed customer willingness to pay, reevaluation of either costs or targeting a different segment is necessary.
• Customers vs. Competition: Understanding customer preferences and relative price sensitivity compared to competitors is crucial for competitive pricing and service differentiation.
• Competition vs. Costs: Cost structures impact pricing strategy. A cost advantage allows for lower prices and competitive edge, while high costs necessitate other differentiators like service quality to justify higher prices.

Revenue Management Techniques

• Dynamic Pricing: Adjusting prices real-time based on factors like demand, time of booking, remaining inventory, competitor pricing, and customer segmentation.
• Demand Forecasting: Utilizing historical data, statistical models, and market trends to predict future demand accurately.
• Yield Management: Allocating limited resources to maximize revenue by varying prices based on demand, time, and customer segments.
• Segmentation: Categorizing customers into different segments based on factors like demographics, behavior, and willingness to pay.
• Price Optimization: Analyzing costs, competitor pricing, and customer willingness to pay to set optimal prices balancing profit and market share.
• Overbooking Management: Routinely overbooking services based on historical data and algorithms to predict no-shows and adjust seat availability.
• Distribution Channel Management: Allocating inventory across different sales channels with varying prices to maximize revenue.
• Promotion and Discount Management: Planning and executing promotions, discounts, and offers to boost sales and revenue without eroding profitability.
• Bundle and Package Pricing: Offering bundled products or services at a lower price compared to individual purchases.
• Contract and Subscription Management: Optimizing pricing and terms for long-term contracts, subscriptions, and recurring revenue models.
• Event-Based Pricing: Charging higher prices for tickets, concessions, or merchandise for highly anticipated events.
• Loyalty Programs: Rewarding customers for repeat business with tiered loyalty programs offering benefits such as lounge access, priority boarding, and bonus miles.
• Dynamic Inventory Management: Adjusting inventory levels and pricing to maximize freshness and minimize waste.
• Data Analytics: Analyzing customer behavior, identifying trends, and recommending personalized products and prices.
• Rate Fences: Charging different rates for services based on factors like advanced booking, cancellation policies, or room types.

Integrated Service Communications Model

• Target Audience: The specific group of people or businesses a service provider aims to reach and engage with through marketing efforts.
• Integrated Marketing Communications (IMC): Ensures a consistent message and brand image across all communication channels.

Key Points from Chapters 1 and 2

• Chapter 1: Service "product" is a combination of physical and intangible elements that deliver value; includes core product, supplementary services, and delivery processes.
• New Service Development: Emphasizes market synergy, strong organizational factors, and thorough market research for success.
• Chapter 2: Importance of what, how, where, and when services are delivered in shaping service distribution strategies.