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Chapter 5: Distributing Services through Physical and Electronic Channels

Services Marketing, 7e, Global Edition. g. Chapter 5: Distributing Services through Physical and Electronic Channels. Overview Of Chapter 5. 1. What? Distribution in a Services Context 2. How? Options for Service Delivery 3. Where? When? Place and Time Decisions

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Chapter 5: Distributing Services through Physical and Electronic Channels

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  1. Services Marketing, 7e, Global Edition g Chapter 5: DistributingServices through Physical and Electronic Channels

  2. Overview Of Chapter 5 1. What? Distribution in a Services Context 2. How? Options for Service Delivery 3. Where? When? Place and Time Decisions 4. Delivering Services in Cyberspace 5. The Role of Intermediaries 6. The Challenge of Distribution in Large Domestic Markets 7. Distributing Services Internationally

  3. 1. Distribution in a Services Context

  4. 食品業的供應鏈：通路為王！ 國外供應商原料進口 • 品牌製造商生產or 代工 • 通路：低價大賣場及連鎖通路崛起，製造商要付上架費、廣告贊助費 • 消費者：精打細算，俗又大碗！ • 廢棄食品（流向何方？回收循環?） 食衣住行，都是運輸物流業的機會！

  5. Distribution in a Services Context （人，物，資訊） • In a services context, we oftendon’t move physical products • Experiences, performances, and solutions are not being physically shipped and stored • More and more informational transactions are conducted through electronic and not physical channels

  6. Distinguishing between Distribution of Supplementary and Core Services • Most core services require physical locations • Many supplementary services are informational; can be distributed widely and cost-effectively via other means • Telephone • Internet

  7. Information and Physical Processes of Augmented Service Products

  8. Core Use Web to deliver information-based core services Information Read brochure/FAQ; get schedules/ directions; check prices Consultation Conduct e-mail dialog Use expert systems Payment Pay by bank card Direct debit Billing Receive bill Make auction bid Check account status Order-Taking Make/confirm reservations Submit applications Order goods, check status Exceptions Make special requests Resolve problems Hospitality Record preferences Safekeeping Track package movements Check repair status

  9. 2. Options for Service Delivery

  10. Distribution Options for Serving Customers • Customers visit service site, e.g., bus stop • Convenience of service factory locations and operational schedules important when customer has to be physically present • Service providers go to customers, e.g., courier service • Unavoidable when object of service is immovable • More expensive and time-consuming for service provider • Service transaction is conducted remotely, e.g., App • Achieved with help of logistics and telecommunications

  11. Six Options For Service Delivery

  12. Channel Preferences Vary Among Customers • For complex and high-perceived risk services, people tend to rely on personal channels (credit cards vs mortgage)窗口 • Individuals with greater confidence and knowledge about a service/channel tend to use impersonal and self-service (most cost-effective)channels, 新手 vs 老鳥 • Customers with social motives tend to use personal channels, e.g., 新竹小黃司機顧暄瑜 • Convenience (saving time, effort) is a key driver of channel choice

  13. 3. Place and Time Decisions

  14. Place Decisions of Service Delivery • Cost, productivity, and access to labor are key determinants to locating a service facility • Locationconstraints • Operational requirement (e.g., airports) • Geographic factor (e.g., ski resorts, ocean beach resorts, 奧運村) • Need for economies of scale (e.g., hospitals)

  15. Place Decisions of Service Delivery • Ministores • Creating many small service factories to maximize geographic coverage • Separating front and back stages of operation • Purchasing space from another provider in complementary field. e.g., ATM inside 7eleven, kiosks • Locating in Multipurpose Facilities • Proximity to where customers live or work • e.g., from Airports to Air Malls:ATM, tax-free shop…台北轉運站

  16. Time of Service Delivery • Traditionally, schedules were restricted • Service availability limited to daytime, 40-50 hours a week (9~17) • Today • For flexible, responsive service operations: 24/7 service, all around the world 假日生意更好，一例一休，運輸物流業很辛苦的！

  17. 4. Delivering Services in Cyberspace

  18. Service Delivery Innovations Facilitated by Technology • Technological Innovations • Development of “smart” mobile telephones, and presence of Wi-Fi • Face, Voice-recognition technology • Websites • Smart cards • Act as electronic purse containing digital money • Electronic channels can be offered (1) together with physical channels, or (2) replace physical channels. e.g., firstdirect.com (HSBC), virtual bank, without branches

  19. E-Commerce: Move to Cyberspace改用網路，實體店面被取代，但運輸物流業生意更好？ • 5 branded tudungs (茜拉!), On line (home): 1 hour, $125, color XShopping mall: 3 hours, $170, Night market: 2 hours, $100, brand X • What are the factors that encourage you to use virtual stores? e.g., Amazon (Jeff Bezos), 淘寶網 (馬雲) • Convenience • Ease of search • Broader selection • Potential for better prices • 24-hour service with prompt delivery

  20. 台灣 18~34歲 Y世代 最愛品牌 • 1~6：Line, Google, FB, YouTube, Apple, 中華電信(網路相關) • 7~10: 統一超商, Sony, 全聯, Visa

  21. 5. Role of Intermediaries

  22. Splitting Responsibilities for Service Delivery • Challenges for original supplier • Act as guardian of overall process • Ensure that each element offered by intermediariesfits overall service concept

  23. Franchising • Franchisor provides training, equipment, and support marketing activities. Franchisees invest time and finance, and follow copy and media guidelines of franchisor. • Advantages: • Expand delivery of effective service concept without a high level of monetary investment • Disadvantages of franchising • Effective quality control is difficult, e.g., 全聚德，幾分甜

  24. 6. Challenge of Distribution in Large Domestic Markets

  25. The Challenge of Distribution in Large Domestic Markets • Distributing services (physical logistics) faces challenges: • Distances involved • Multiple time zones • Multiculturalism • Differences in laws and tax rates 台：road(rail, air, sea) 日，美國，歐盟，中國： road, rail, air, river (sea)

  26. 7. Distributing Services Internationally

  27. Factors Favoring Adoption of Transnational Strategies 1. Market Drivers: Corporate customers seek to standardize and simplify suppliers used in different countries – logistics suppliers, Big 4 accounting firms 2. Government Drivers: Favorable trade policies, compatible technical standards, common marketing regulations - Uber 3. Competition Drivers: Firms may be obliged to follow competitors into new markets to protect own positions elsewhere. 竹北、外灘、紐約沒店，不算 A咖! 4. Technology Drivers (ICT): Advances in information technology – mobility of equipment, digitization of voice 5. Cost Drivers: Economies of scale, Lower operating costs

  28. How Service Processes Affect International Market Entry 1. People processing services require direct contact with customers, e.g., chain restaurants, hotels, car rental firms • Passenger transportation (air, sea, rail, road, river) 2. Possession processing involves services to customer’s physical possessions • - Repair and maintenance, freight transport 3. Information-based services include mental processing services and information processing services • Export the information via telecommunications and transform it locally - Data can be downloaded via CDs or DVDs

  29. Barriers to International Trade in Services • Passage of free-trade legislation is important facilitator of transnational operations • Notable developments: NAFTA, Latin American economic blocs, EU, ASEAN (Association of Southeast Asian Nations) Economic Community (AEC) • Despite efforts of WTO and GATT, barriers still exist: • Restrictions on international airline operating rights • Heavy taxation • Legal restrictions • Lack of broadly agreed upon accounting standards • Cultural issues

  30. Being Global! UPS, Starbucks 花了幾十年才做到全球化， 但今天有人在一年內就做出全球 Youtube最多人訂閱的頻道。

  31. Summary • Channel options include: • Customers visit the service site • Service providers go to their customers • Service transaction is conducted remotely • Place and time decisions include where services should be delivered in bricks-and-mortar context, when it should be delivered

  32. Summary • Delivery in cyberspace is facilitated by technology;e-commerce allows 24-hour delivery, saving time and effort • Intermediaries play roles in distributing services • Service processes (people, possession, information-based) affect international market entry via the drivers: • Market drivers • Competition drivers • Cost drivers • Government drivers • Technology drivers

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