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Chapter: Business Science : Services Marketing : Service Design and Development

Service Channel

Distribution-meaning: It is the availability of and accessibility of a service to consumers. Two service marketers are involved in delivering service through intermediaries.



Issues related to distribution




It is the availability of and accessibility of a service to consumers.


Two service marketers are involved in delivering service through intermediaries.



2.The service principal/originator  - it is the entity that creates the service concept.




3.The service deliverer/intermediary –it is the entity that interacts with the customer in the actual execution of the service.



The  focus  in  service  distribution  is  on  identifying  ways  to  bring  the  customer  and  principal  and


representatives together. The options available are








4.Electronic channels.

Direct channel/Company owned channel


There are some services which are distributed directly from provider to customer.


Ex: Doctors, Hairstylists.




1.Complete control over the outlets. 2.Consistency can be maintained


3.Standards can be established and monitored 4.Company can own customer relationships. Cons:


1.It has to undergo financial risk


2.They may not be aware of the business not the markets.



Common issues involving intermediaries


a. Channel conflict over objectives and performance:


The conflict occurs because the service principal and its intermediaries are too dependent on each other.



The conflict may occur between the service provider and service intermediary in the types of channels.



b.                       Channel conflict over costs and rewards:


The conflict may arise in monetary arrangement between those who create the service and those who deliver the service.



c. Difficulty controlling quality and consistency across outlets:


It results in inconsistency and lack of uniform quality that results when multiple outlets deliver services, here the service provider suffers because the entire brand and reputation are jeopardized.



d.                       Tension between empowerment and control:


If the services are to be delivered by the franchisees, their independent ideas must be integrated according to the standards.


e.      Channel ambugity:


Who will undertake market research to identify customer requirement the company or intermediary?



Who determines the standards for service delivery, the franchiser or the franchisee.

Electronic channels in action/innovative application of the web, internet and other electronic channels.


a.                       Interactive television:


It is an electronic channels that has been developed in many different forms, but essentially consists of television where the viewer participates actively rather than passively receiving the information.While a customer watches TV, a small icon will appear in the corner of the screen on various channels. When the customer clicks the remote a menu of information will show.


b.                       Super ATMS:


These are the ATMs that show movie clips and commercials while you wait for money.This will allow you to book flights and print tickets for airlines.


c.                        ON-LINE TRAVEL:


Prices are more competitive than offline price.No inventory cost. Advertising revenue.


Ex: Travelocity.com it sells airline tickets, hotel rooms directly to consumers avoiding agents. d. Investing online







Here we focus on service employees and human resource practices that facilitate delivery of quality services.



The failure to deliver services as designed and specified can result from a no. of employees and human performance factors



a.                   Ineffective recruitment of service


b.                       Role ambiguity


c.                   Role conflict among contact employees.


d.                       Poor employee-technology fit.

e.                        Inappropriate evaluation and compensation systems.



f. Lack of empowerment


g.                       Perceived team work


h.                       Team work



a. Employees are the service:




Investing in the employee to improve the service parallels making a direct investment in the improvement of a manufactured product/service.



Ex: hair cutting, child care



b.Employees are the brand:




Even off-duty employees, such as flight attendants/restaurant employees on a break, reflect on the organization they represent.



c. Employees are the marketers:




Contact employees represent the organization and can directly influence customer satisfaction, they perform the role of marketers.



Ex: Bank Tellers


d.Employees   are   the   organization   in   the   custome




Even if the contact employee doesn‟tillrepresentperformthefirmin t the customers‟ eye.





Ex: Health clinic


Service Profit Chain:

The five dimensions of service quality is delivered by people.



a. Reliability:


Delivering the service as promised is totally within the control of front-line employees.





Employees directly influence customer perceptions of responsiveness through their personal willingness to help and their promptness in selling customers.



c. Assurance:


Communicate about the service credibility and to inspire trust and confidence. This dimension is highly dependent on the employees ability. It reflects the reputation of the organization.






Here employees will pay attention, listen, adapt and be flexible in delivery what individual customer needs.



e. Tangibles:



The service facility, brochures are the tangibles available for the service provider to deliver the service.



Emotional labor:




This was coined by Arlie Hochschild. It refers to the labor that goes beyond the physical and mental skills needed to deliver quality service.


·Delivering smiles


·Making eye contact

·Showing sincere interest


·Engaging in friendly conversation with people




Therefore, friendliness, courtesy, empathy and responsiveness directed toward customers all require huge amount of emotional labor from front-line employees.



Reducing stress of excessive emotional labor:




1.Providing good physical working condition 2.Scheduled break


3.job rotating



Sources of conflict



Front-line employees often face interpersonal and inter organizational conflicts on the job.



a. Person/role conflict:




In some situations, boundary spanners feel conflicts between what they are asked to do and their own personalities, values.



It arises when employees are required to wear specific clothing to confirm job requirements.



b.Organisation/client conflict:



Here conflict arises when employees have 2 bosses, organization and the individual customer.




When a customer makes excessive demands, the employee has to choose whether to follow the rules or satisfy the demands.



The conflict is greatest when the employee believes the organization is wrong in its policies and must decide whether to accommodate the client/losing the job.


c.      Inter-client conflict:


This occurs when there are incompatible expectations and requirements from 2 or more customers.



Ex: Teachers



§Providers may satisfy one customer by spending additional time.

§Customizing service

§Bring very flexible in meeting customers needs

The waiting customers are becoming dissatisfied, b‟z they are not met on a timely way.

Quality/productivity trade-off:




Here front-line service workers are asked to be both effective and efficient. They are expected to deliver satisfying service to customers and at the same time to be cost-effective and productive in what they do.



Thus essential trade-offs between quality and quantity and between maximum effectiveness and efficiency, place real-time demands and pressures on service employees.


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