2016 Students Ch05 - Lovelock - Distributing Services Through Physical and Electronic Channels - 6e - STUDENT

Chapter 5
Distributing
services through
physical and
electronic
channels
Digital Image PowerPoint to accompany:
Slide 1
Copyright 2015 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781486002702/Lovelock/Services Marketing 6e
Learning objectives
5.1 List the four questions that form the foundation of any service
distribution strategy
5.2 Describe the three main distribution options for serving
customers
5.3 Explain determinants of customers channel preferences
5.4 Explain the issues of delivering services through electronic
channels
5.5 Describe the key role of intermediaries in distributing services
5.6 Explain the special challenges of distributing services
internationally
5.7 Describe the role of blueprinting in designing and distributing
services
Slide 2
Distribution strategy in a services context
What is being distributed?
In services theres often nothing to move. Experiences,
performances and solutions are not physically shipped and stored.
Informational transactions are increasingly conducted via electronic
channels.
Information and promotion flow get the customer interested in

buying the service
Negotiation flow agreement on service features and configurations,
terms of offer. Sell the right to use the service; train or concert ticket
or reservation
Product flow if it needs people then it is likely there is a need for
physical facilities.
Slide 3
Distinguishing between distribution of supplementary and core services
(augmented is a legacy of the product model)
Slide 4
Distribution options for serving customers: determining the type of contract
Slide 5
Distribution options for serving customers: determining the
type of contract
Customers visit the service site

Service providers go to their customers
The service transaction is conducted remotely
Slide 6
An innovative approach to providing
banking Kasikornbanks mobile
banking service for banking in remote
rural areas
Courtesy of
Kasikornbank
Slide 7
Channel preferences vary between consumers
For complex and high-perceived-risk services, people tend to rely on

personal channels; mortgage
Individuals with higher confidence and knowledge are more likely to use
impersonal and self-service channels.
Customers who want functional aspects of a transaction prefer more
convenience often this is impersonal and self-service channels.
Customers with social motives tend to use personal channels.
Convenience (not just core product convenience but also place and time
convenience) is a key driver of channel choice for the majority of
consumers.
Slide 8
Many large retail
stores now offer
customers the
option of a self-
service checkout
ogy
o l
chn
t e
vice
er
l fs
AFR Picture by Phil Carrick
Se
Slide 9
Place and time decisions
Where should service be delivered in a bricks-

and-mortar context?
Paul Patterson
Customers using a self-

service vending machine in
the Taipei metro system
Slide 10
Place and time decisions
Where should service be delivered in a bricks-and-mortar context?
Cont.
Ministores: Multi-site service businesses involves creating numerous small

service factories to maximise geographical coverage.
Locating in multipurpose facilities: Close to where consumers work or live,
often composed of office space, services such as a bank, a restaurant, a hair
salon, several stores, caf, health club. E.g. Singapores Changi Airport.
Locational Constraints: Customer convenience is important but the need for
economies of scale is an operational issue that may restrict choice of
locations. E.g. medical specialists locate near to hospitals.
Slide 11
Services delivered online
Advances in telecommunications and computer technology have spurred many
new approaches to service delivery: hospitality reservations are increasingly
handled via firms websites. www.swissotel.com
Swisstel is a service
firm which leverages
information technology
to achieve marketing
and customer service
goals
Courtesy of Swisstel
Service delivery innovations facilitated by information technology.

Development of the smart phone
Voice recognition software
Webs that provide information, take orders, serve as delivery channel of information
Commercialisation of smart cards and digital wallets
Mobile vendors, such as coffee and food vans
Mobile Apps such as Shazam.
Online radio services
Slide 12
Courtesy Taco Truck
A new innovative service recently emerged in

Melbourne called Taco Truck, a mobile gourmet food
van that advertises its locations solely through Twitter
and Facebook.
Slide 13
The role of intermediaries
Slide 14
The role of intermediaries - Franchising
Although
franchising is most
commonly
associated with fast-
food outlets, the
Courtesy Jims Group
concept has been
Subway Restaurants
applied to a very
wide array of both
consumer and B2B
services and now
spans some 75 Subwaya leading franchise operation
different product
categories.
http://www.s
tepzfitness.
com.au/
Slide 15
<www.firstdirect.com/press/photos_premises.shtml>
One of the First Direct call centres
Slide 16
Distributing services internationally
Distributing services in the global marketplace

Factors responsible for the internationalisation of
services
How does the nature of a service affect international
distribution?
Slide 17
Factors responsible for the internationalisation of services
Market drivers;
common customer needs and the existence of supply networks
Competition drivers;
trans-national policies of companies, once a firm moves to a new
market this may spark a flurry of competitive activity amongst other
firms also seeking new markets.
Technology drivers;
IT, computerisation
Cost drivers;
economies of scale, labour rates
Common customer needs drivers;
consumer electronic devices, cigarettes, computer hardware and
writing instruments. Less personal application more likely to be
exported.
Government drivers;
trade policies, compatible technical standards
Slide 18
Common customer needs drivers cont.
Slide 19
Slide 20
Paul Patterson
Global service marketers must be

aware and sensitive to different
cultures
Robert
Cumming/Shutterst
ock.com
Slide 21
Intellectual property
Slide 22
The role of flowcharting and blueprinting
Flowcharting provides a service organisation with the means of
managing and controlling individual parts of the service delivery
system; identifying weak points and opportunities for improving
or enhancing the efficiency and productivity of the system; and
preventing service failures.
Must show time dimensions

Must identify and handle errors, bottlenecks, and reiterations
Must precisely define how much variation from standards can be
allowed in execution
Slide 23
Blueprinting a full
service
restaurant
experience
Continues
Slide 24
Continued
Two more
pages not
shown
Slide 25
Richard Milnes/Demotix/Corbis
Slide 26
End of chapter
Slide 27

2016 Students Ch05 - Lovelock - Distributing Services Through Physical and Electronic Channels - 6e - STUDENT

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Chapter 5

Information and promotion flow get the customer interested in

(augmented is a legacy of the product model)

Customers visit the service site

For complex and high-perceived-risk services, people tend to rely on

Where should service be delivered in a bricks-

Customers using a self-

Ministores: Multi-site service businesses involves creating numerous small

Service delivery innovations facilitated by information technology.

A new innovative service recently emerged in

concept has been

One of the First Direct call centres

Distributing services in the global marketplace

Global service marketers must be

Must show time dimensions

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