BEM120_2023_Chapter_8_Slides_Class_Notes .pdf
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2024/08/26 Chapter 8 Service Marketing in Perspective 1 INTRODUC TION 5 1 2024/08/26 Learning Outcomes Afte...
2024/08/26 Chapter 8 Service Marketing in Perspective 1 INTRODUC TION 5 1 2024/08/26 Learning Outcomes After studying this chapter, you should be able to: 1. Define the term ‘distribution’ in a services management context. 2. Explain the role of distribution objectives in the service delivery process. 3. Discuss how the distribution function can balance supply and demand. 4. Place the service location into perspective by describing the different types of interactions. 5. Explain the term ‘distribution channel’ in a service delivery context. 6. Distinguish between different distribution channels and provide examples of each. Grasping Service Marketing. 3rd Edition. 6 Learning Outcomes 7. Differentiate between exclusive, intensive and selective distribution, and provide examples of each. 8. Discuss the role of intermediaries in the distribution of services. 9. Explain the concept of ‘franchising’. 10. Explain how logistics affects the distribution process. 11. Provide practical examples to illustrate any of the theoretical issues discussed in this chapter. 12. Provide service management-related solutions to any marketing problems discussed in this chapter. Grasping Service Marketing. 3rd Edition. 7 2 2024/08/26 Let’s recap… 8 Service Marketing Mix Product (Ch4) Process Place (Ch7) (Ch8) Service Marketing Mix People Price (Ch6) (7Ps) (Ch9) Physical Promotion Evidence (Ch10) (Ch5) Grasping Service Marketing. 3rd Edition. 9 3 2024/08/26 What does “place” (i.e. distribution) entail when it comes to services? It adds time utility and place utility (i.e. Place ensuring the service offering is available (Ch8) and accessible where and when needed) ? Grasping Service Marketing. 3rd Edition. 10 The Nature of Distribution For service organisations often the distribution method IS the service Grasping Service Marketing. 3rd Edition. 11 4 2024/08/26 The Nature of Distribution Defining Distribution: Distribution: the availability and accessibility of a service to customers Availability: the service is available to the customer whenever he/she wants it Accessibility: the relative ease with which the customer can conduct a transaction with the service provider Grasping Service Marketing. 3rd Edition. 12 Introduction Distribution in perspective Distribution strategy begins with … Role of distribution function = Balance S&D … How do we deliver service and where should it take place? Pay attention to logistical activities to manage physical distrib. of service Grasping Service Marketing. 3rd Edition. 13 5 2024/08/26 Distribution Objectives 1. Coverage: – Refers to coverage of the distribution network / the number of locations (Intensive, selective, or exclusive) 2. Contact: – Refers to type of contact (Customer to Service provider; Service provider to customer, or No physical contact) 3. Reservation facilities: – Refers to use of reservation facilities (if so, it reduces need for immediate availability of service) 4. Actual delivery: – Refers to individual or personal delivery (↑outlets) vs collective delivery (↓ outlets) Grasping Service Marketing. 3rd Edition. 14 Distribution Objectives Reservation facilities: VS Grasping Service Marketing. 3rd Edition. 15 6 2024/08/26 Distribution Objectives Actual delivery: Individual / personal Collective Grasping Service Marketing. 3rd Edition. 16 Distribution is about increasing accessibility… Why do we want to increase accessibility of our service? 1. To gain market share 2. Gain entry into new markets 3. Prevent penetration of established market by competitor(s) Grasping Service Marketing. 3rd Edition. 17 7 2024/08/26 Distribution Function Function of distribution is to: Supply Demand Supply Demand Grasping Service Marketing. 3rd Edition. 18 Distribution Function Two distribution problems: 1. Excess production capacity (supply) in one time period cannot be transferred to another period when there is a shortage 2. Excess demand in one geographical area cannot be met by excess supply located in another area Grasping Service Marketing. 3rd Edition. 19 8 2024/08/26 Demand Situations Negative demand neg. feelings despite benefit No demand service has no perceived value to some Latent demand need exists, no affordable service avail Declining fall in salesdemand Irregular demand of demand uneven distribution demand Full at desirable level (quality over volume) demand excess demand Overfull demand demand for service, Unwholesome prefer not to have demand Grasping Service Marketing. 3rd Edition. 20 Negative demand https://www.youtube.com/watch?v=1FoTPLWJ9BA Grasping Service Marketing. 3rd Edition. 21 9 2024/08/26 Latent demand Grasping Service Marketing. 3rd Edition. 23 Declining demand Grasping Service Marketing. 3rd Edition. 24 10 2024/08/26 Irregular demand Grasping Service Marketing. 3rd Edition. 25 Full demand Grasping Service Marketing. 3rd Edition. 26 11 2024/08/26 Overfull demand Grasping Service Marketing. 3rd Edition. 27 Unwholesome demand Grasping Service Marketing. 3rd Edition. 28 12 2024/08/26 Strategies to Balance Supply & Demand Equipment can be switched for alternative uses Personnel can be cross-trained Capacity can be increased in short term during peak demand Operations can be organised to do some of the work during periods of lower demand Grasping Service Marketing. 3rd Edition. 29 30 13 2024/08/26 Introduction Distribution in perspective How do we deliver service and where should it take place? Pay attention to logistical activities to manage physical distrib. of service Grasping Service Marketing. 3rd Edition. 31 Distribution Structure Service location decisions Distribution channels Intermediaries Grasping Service Marketing. 3rd Edition. 32 14 2024/08/26 Service Location Decisions Location …is concerned with decisions a service organisation makes about where it’s operations and staff are situated … it depends on the type and degree of interaction required: The customer goes to the service provider The service provider goes to the customer ✓ Material-oriented service – provider visit customer ✓ People-oriented service - can decide to provide service at customer premises or own (its about convenience for customer) No physical contact between the customer and the service provider Grasping Service Marketing. 3rd Edition. 33 The Customer Goes to the Service Provider Grasping Service Marketing. 3rd Edition. 34 15 2024/08/26 The Service Provider Goes to the Customer Material People Grasping Service Marketing. 3rd Edition. 35 Distribution Channels …the course taken in the transfer of the service from its original source of supply to its ultimate place of consumption Channel choice options: No intermediaries. Direct channelsService provider - customer Indirect channels Multi-channels Grasping Service Marketing. 3rd Edition. 37 16 2024/08/26 Distribution Channels Channel options for service organisations Direct channel Grasping Service Marketing. 3rd Edition. 38 Direct Channel Grasping Service Marketing. 3rd Edition. 39 17 2024/08/26 Distribution Channels …the course taken in the transfer of the service from its original source of supply to its ultimate place of consumption Channel choice options: Direct channels One or more intermediaries. Service provider – intermediary – Indirect customer channels Multi-channels Grasping Service Marketing. 3rd Edition. 40 Distribution Channels Channel options for service organisations Indirect channels Grasping Service Marketing. 3rd Edition. 41 18 2024/08/26 Intermediaries Acts on behalf of a service producer and has authority to create a Agents legal relationship between customer and service provider Service wholesalers Service retailers Franchised service deliverers Grasping Service Marketing. 3rd Edition. 42 Indirect channel Agents Grasping Service Marketing. 3rd Edition. 43 19 2024/08/26 Intermediaries Agents Buy the rightwholesalers Service to a large volume of service transactions and then break these down into smaller quantities for retailers to handle Service retailers Franchised service deliverers Grasping Service Marketing. 3rd Edition. 44 Indirect Channel Service Wholesaler Grasping Service Marketing. 3rd Edition. 45 20 2024/08/26 Intermediaries Agents Service wholesalers Operate in retailers Service manner that no legal relationship is created between customer and service provider but rather with retailer instead Franchised service deliverers Grasping Service Marketing. 3rd Edition. 46 Indirect Channel Service retailers Grasping Service Marketing. 3rd Edition. 47 21 2024/08/26 Distribution Channels Channel options for service organisations Grasping Service Marketing. 3rd Edition. 48 Intermediaries Agents Service wholesalers Service retailers Relationship between Franchised franchisee service and franchisor where franchisor deliverers stipulates manner of service delivery expected from franchisor Grasping Service Marketing. 3rd Edition. 49 22 2024/08/26 Indirect Channel Franchised service deliverers Grasping Service Marketing. 3rd Edition. 50 Distribution Channels …the course taken in the transfer of the service from its original source of supply to its ultimate place of consumption Channel choice options: Direct channels Indirect channels Multi-channels Use two or more channels to reach on or more segments Grasping Service Marketing. 3rd Edition. 51 23 2024/08/26 Distribution Channels Channel options for service organisations Multi-channel & Grasping Service Marketing. 3rd Edition. 52 Multi-channels Grasping Service Marketing. 3rd Edition. 53 24 2024/08/26 Distribution Coverage Fewer More outlets outlets Grasping Service Marketing. 3rd Edition. 54 Exclusive Distribution Grasping Service Marketing. 3rd Edition. 55 25 2024/08/26 Exclusive Distribution Grasping Service Marketing. 3rd Edition. 56 Selective Distribution Grasping Service Marketing. 3rd Edition. 57 26 2024/08/26 Selective Distribution Grasping Service Marketing. 3rd Edition. 58 Intensive distribution Grasping Service Marketing. 3rd Edition. 59 27 2024/08/26 Intensive distribution Grasping Service Marketing. 3rd Edition. 60 Introduction Distribution in perspective Pay attention to logistical activities to manage physical distrib. of service Grasping Service Marketing. 3rd Edition. 61 28 2024/08/26 Logistics (Physical Distribution) Integrated logistics (for services): the process of anticipating customer needs and wants, acquiring and allocating the capital, materials, people, technologies, and information required to meet those needs and wants, and optimising and utilising those service-providing networks to satisfy customers’ needs and wants in a timely fashion. Supply chain Service response logistics logistics Grasping Service Marketing. 3rd Edition. 62 Supply Chainfunctions Supply chain Logistics The management of raw materials, in-process materials and finished-goods inventories from the point of origin to the point of consumption Transportation Movement of the tangible goods that accompany services Warehousing and inventory Purchasing Grasping Service Marketing. 3rd Edition. 63 29 2024/08/26 Supply Chainfunctions Supply chain Logistics The management of raw materials, in-process materials and finished-goods inventories from the point of origin to the point of consumption Transportation Receiving, storing, picking and packing and loading of tangible Warehousing and inventory goods accompanying service Purchasing Grasping Service Marketing. 3rd Edition. 64 Supply Chainfunctions Supply chain Logistics The management of raw materials, in-process materials and finished-goods inventories from the point of origin to the point of consumption Transportation Warehousing and inventory Purchasing Involves purchasing of tangible goods accompanying services or the tangible goods needed to deliver service Grasping Service Marketing. 3rd Edition. 65 30 2024/08/26 Service Response Logistical Logistics Activities The process of co-ordinating the non-material activities required to deliver the service cost effectively and in a customer service-effective manner Logistical Activities: Information Order-taking Invoicing Payment Grasping Service Marketing. 3rd Edition. 66 Let's test our knowledge … (SQ) Scan or visit: https://b.socrative.com/login /student/ Room name: BEM1202023 (*no spaces) Your name: Please provide your surname Grasping Service Marketing. 3rd Edition. 68 31 2024/08/26 Let's test our knowledge … (LQ) As part of the distribution structure, companies need to make certain service location decisions. For each of the following, identify the most appropriate service location decision (1 mark) and motivate each answer (1 mark). (10 marks) 1. Netflix streaming services 2. Air travel (e.g., British Airways) 3. Pool cleaning services 4. Baby-sitting services 5. Washing machine repairs Grasping Service Marketing. 3rd Edition. 69 Let's test our knowledge … (LQ) Jetpack Flyers Aviation would like to offer individuals a once in a lifetime opportunity to literally “fly”(with the use of a jetpack). They are looking to launch a new service by offering a 2-day flying experience for only +/- $5 000 (+/- R100 000). This experience will be offered and facilitated by highly skilled and certified jetpack pilots. In terms of distribution coverage, identify and briefly describe the distribution intensity option (1 mark) that you would recommend to Jetpack Flyers Aviation for this new niche service offering, and motivate your answer (1 mark). 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