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Finals Service Marketing > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

 If you mention distribution, many people will likely think of moving boxes through physical channels to distributors and retailers for sale to end-users.

A

DISTRIBUTION IN A SERVICE
CONTEXT

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2
Q

 In services though, often there is nothing to move.

Experiences, performances, and solutions are not physically shipped and stored.

A

DISTRIBUTION IN A SERVICE
CONTEXT

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3
Q

 Meanwhile, informational transactions are increasingly conducted via electronic
channels.

In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the question of what is being distributed:

A

DISTRIBUTION IN A SERVICE
CONTEXT

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4
Q

WHAT IS BEING DISTRIBUTED?

In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the question of what is being distributed:

  • ________________________________ — distribution of information and promotion materials relating to the service offer.

The objective is to get the customer interested in buying the service.

A

Information and promotion flow

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5
Q

WHAT IS BEING DISTRIBUTED?

In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the question of what is being distributed:

  • __________________________ — reaching an agreement on the service features and configuration, and the terms of the offer, so that a purchase contract can be closed.

The objective is often to sell the right to use a service (e.g., sell a reservation or a ticket).

A

Negotiation flow

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6
Q

WHAT IS BEING DISTRIBUTED?

In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the

**____________________— many services, especially those involving people processing or possession processing, require physical facilities for delivery.

Here, distribution strategy requires
development of a network of local sites. For information processing services, such as Internet banking and distance learning, the product flow can be via electronic channels, employing one or more centralized sites.

A

Product flow

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7
Q

WHAT IS BEING DISTRIBUTED

  • The flow perspective on what is being distributed can relate to the ____________
    as well as to supplementary services of the Flower of Service.
A

core service

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8
Q

WHAT IS BEING DISTRIBUTED

  • Distinguishing between core and supplementary services is important, as
    many core services require a ________________, which severely restricts
    distribution.
A

physical location

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9
Q

WHAT IS BEING DISTRIBUTED

  • For instance, a live performance of a Broadway show must take place at a
    _________ in Manhattan (until it goes on tour).
A

theater

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10
Q

WHAT IS BEING DISTRIBUTED

However, many of the _____________ _________ can be distributed widely and
cost-effectively via other means.

A

supplementary services

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11
Q

HOW SHOULD SERVICES BE
DISTRIBUTED?

 Does the service or the firm’s positioning strategy require customers to be in direct ____________ with its personnel, equipment, and facilities?

A

physical contact

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12
Q

HOW SHOULD SERVICES BE
DISTRIBUTED?

 (As we saw in Chapter 1, this is ___________ for people-processing services, but may not be necessary for other categories.)

If so, do customers have to visit the facilities of the service organization, or will the service organization send personnel and equipment to customers’ own sites?

A

unavoidable

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13
Q

HOW SHOULD SERVICES BE
DISTRIBUTED?

 Alternatively, can ______________ between provider and customer be completed at arm’s length through the use of either telecommunications or physical channels of distribution?

(The three possible options are shown in the first column of Table)_

A

transactions

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14
Q

Be familiar with how services can be ___________ using three main options, and understand the importance of distinguishing between distributing core and supplementary services

A

distributed

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15
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

Customers visit the service ____

A

site

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16
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

The ____________ of the service factory locations and operational schedules are important when the customer has to
be physically present.

A

convenience

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17
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

__________ providers go to customers

A

Service

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18
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

 Unavoidable when the service is _________

A

immovable

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19
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

More ____________ and time-consuming for the service provider

A

expensive

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20
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

 Service transaction is conducted __________

A

remotely

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21
Q

HOW SHOULD A SERVICE BE
DISTRIBUTED?

 Achieved with the help of _____________ and telecommunications

A

logistics

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22
Q

The use of different channels to deliver the same service not only has
vastly different cost implications for a service organization; it also
drastically affects the nature of the service experience for the customer.

A

CHANNEL PREFERENCES VARY
AMONG CUSTOMERS

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23
Q

Although electronic self-service channels tend to be the most cost-effective, not all customers like to use them. This means that if we want to migrate customers to new electronic channels, we may require different strategies for different segments

A

CHANNEL PREFERENCES VARY
AMONG CUSTOMERS

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24
Q

 For complex and perceived high-risk services, people tend to rely on personal channels. For example, customers are happy to apply for credit cards using remote channels, but prefer a face-to-face transaction when obtaining a mortgage.

 Individuals with higher confidence and knowledge about a service and/or the channel are more likely to use impersonal and self-service channels.

 Customers who look for the functional aspects of a transaction prefer more convenience. This often means the use of impersonal and self-service channels.

 Customers with social motives tend to use personal channels.

 Convenience is a key driver of channel choice for the majority of consumers.

 Service convenience means saving time and effort rather than saving money.

A

Channel Preferences Vary Among
Customers

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25
Channel Preferences Vary Among Customers  For complex and perceived high-risk services, people tend to rely on __________ channels. For example, customers are happy to apply for credit cards using remote channels, but prefer a face-to-face transaction when obtaining a mortgage.
personal
26
Channel Preferences Vary Among Customers Individuals with higher confidence and knowledge about a service and/or the channel are more likely to use ____________ and ____________________.
impersonal self service channels
27
Channel Preferences Vary Among Customers: Customers who look for the _________ aspects of a transaction prefer more convenience. This often means the use of impersonal and self-service channels.
functional
28
Channel Preferences Vary Among Customers:  Customers with _________motives tend to use personal channels.
social
29
Channel Preferences Vary Among Customers: ______________ is a key driver of channel choice for the majority of consumers.
Convenience
30
Channel Preferences Vary Among Customers: _________ convenience means saving time and effort rather than saving money.
Service
31
DISTRIBUTION OF SUPPLEMENTARY SERVICES IN CYBERSPACE Five of the supplementary services are ________________-based
information
32
DISTRIBUTION OF SUPPLEMENTARY SERVICES IN CYBERSPACE  These services can all be distributed _____________. They are:  Information  Consultation  Order-taking  Billing  Payment
electronically
33
DISTRIBUTION OF SUPPLEMENTARY SERVICES IN CYBERSPACE  Distribution of information, consultation and order-taking has reached ____________________ levels in global service industries (e.g., hotels, airlines, car rental companies)
very sophisticated
34
Information and Physical Processes of ______________ ________________________
Augmented Service Product
35
USING _____________ FOR SERVICE DELIVERY
WEBSITE
36
IMPORTANT FACTORS THAT ATTRACT CUSTOMERS TO USE __________________  Convenience  Ease of search (obtaining information and searching for desired items or services).  Broader selection.  Potential for better prices.  24/7 service with prompt delivery.  This is particularly appealing to customers whose busy lives leave them short of time.
ONLINE SERVICES
37
WHERE SHOULD A SERVICE FACILITY BE LOCATED?  Unless a service is delivered __________, location decisions for physical sites have to be made. A _________ site location requires a sizable investment and a long-term commitment. Due to its fixed nature as a result of long leases and high investments into a site, a firm _________ easily move to another site or convert to another format.
remotely physical cannot
38
WHERE SHOULD A SERVICE FACILITY BE LOCATED?  Even if sunk costs are written off, moving to another location causes the problem of a proportion of loyal customers and employees being ________; the farther the distance between the new and old locations, the bigger the ______.
lost
39
WHERE SHOULD A SERVICE FACILITY BE LOCATED?  How then should service managers make decisions on the places where service is delivered?  Frequently, a two-step approach is used;  First, _________ location considerations are developed to help identify the general types of location a service firm should aim for.  Second, ___________ considerations are used to choose between specific sites of a similar type that fit the overall location strategy.
strategic tactical
40
STRATEGIC LOCATION CONSIDERATIONS The site ________ is an integral part of the overall service strategy; it must be at a location that is _________ with its marketing strategy and target segments for an extended period of time.
location consistent
41
STRATEGIC LOCATION CONSIDERATIONS  To develop a ______________, start by understanding customer needs and expectations, competitive activity, and the nature of the service operation.
location strategy
42
STRATEGIC LOCATION CONSIDERATIONS _________ should make it easy for people to access frequently purchased services, especially those that face active competition . Examples include retail banks and fast-food restaurants. However, customers may be willing to travel further from their homes or workplaces to reach specialty services
Firms
43
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include:  ________________ and characteristics (i.e., to assess the density and number of target customers that could be served with this site).
Population size
44
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include:  ___________ and vehicular traffic and its characteristics (i.e., to assess the number of target customers passing a site that could be served with this outlet).
Pedestrian
45
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include:  ____________ of access for customers (e.g., public transportation, availability of parking).
Convenience
46
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include: _______________ in this area.
Competitors
47
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include: ____________of nearby businesses and stores.
Nature
48
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include: Availability of _________.
labor
49
TACTICAL LOCATION CONSIDERATIONS In the second step for selecting a specific site, key factors that need to be considered include: ___________ of site locations, rental costs, and contractual conditions (e.g., length of lease, legal restrictions) and regulations (e.g., on zoning and opening hours).
Availability
50
The site location is an integral part of the overall service strategy; it must be at a location that is consistent with its marketing strategy and target segments for an extended period of time.
STRATEGIC LOCATION CONSIDERATIONS
51
 To develop a location strategy, start by understanding customer needs and expectations, competitive activity, and the nature of the service operation.
STRATEGIC LOCATION CONSIDERATIONS
52
Firms should make it easy for people to access frequently purchased services, especially those that face active competition. Examples include retail banks and fast-food restaurants. However, customers may be willing to travel further from their homes or workplaces to reach specialty services
STRATEGIC LOCATION CONSIDERATIONS
53
 Population size and characteristics (i.e., to assess the density and number of target customers that could be served with this site).
TACTICAL LOCATION CONSIDERATIONS
54
 Pedestrian and vehicular traffic and its characteristics (i.e., to assess the number of target customers passing a site that could be served with this outlet).
TACTICAL LOCATION CONSIDERATIONS
55
 Convenience of access for customers (e.g., public transportation, availability of parking).
TACTICAL LOCATION CONSIDERATIONS
56
 Competitors in this area.
TACTICAL LOCATION CONSIDERATIONS
57
 Nature of nearby businesses and stores.
TACTICAL LOCATION CONSIDERATIONS
58
 Availability of labor.
TACTICAL LOCATION CONSIDERATIONS
59
 Availability of site locations, rental costs, and contractual conditions (e.g., length of lease, legal restrictions) and regulations (e.g., on zoning and opening hours).
TACTICAL LOCATION CONSIDERATIONS
60
Although customer convenience is important, the need for economies of scale and operational requirements may restrict choice of locations. Cost, productivity and access to labor are key determinants to locating a service facility
LOCATIONAL CONSTRAINTS
61
 Operational Requirements –Airports for instance, are often inconveniently located relative to travelers’ homes, offices, or destinations. Because of noise and environmental factors, finding suitable sites for construction of new airports or expansion of existing ones is a very difficult task.
LOCATIONAL CONSTRAINTS
62
 Need for Economies of scale-Major hospitals offer many different healthcare services at a single location, requiring a very large facility. Customers requiring complex, in- patient treatment must go to the service factory rather than be treated at home. However, an ambulance — or even a helicopter — can be sent to pick them up. Medical specialists, as opposed to general practitioners, often find it convenient to locate their offices close to a hospital because it saves them time when they need to treat their patients.
LOCATIONAL CONSTRAINTS
63
 Innovative distribution strategies can be at the core of powerful new service models.
INNOVATIVE LOCATION STRATEGIES
64
 Mini-stores and related location strategies, and locating in multi-purpose facilities are in the following sections. What these strategies have in common is that accessibility is a key component of these services’ value propositions.
INNOVATIVE LOCATION STRATEGIES
65
INNOVATIVE LOCATION STRATEGIES  An interesting innovation among multi-site service businesses involves creating numerous small service factories to maximize geographic coverage. Examples include:  Automated kiosks are one example. ATMs offer many functions of a bank branch within a self-service machine located within stores, hospitals, colleges, airports, and office buildings. Note: Automated kiosks like ATM located inside convenience stores
MINI-STORES.
66
LOCATING in MULTI-PURPOSE FACILITIES  The most obvious locations for consumer services are close to where customers live or work.  Modern buildings are often designed to be multi-purpose, featuring not only office or production space but also services such as a bank (or at least an ATM), a restaurant, a hair salon, several stores, and maybe a health club
INNOVATIVE LOCATION STRATEGIES
67
WHEN SHOULD SERVICE BE DELIVERED? In the past, most professional and retail services in the industrialized countries followed traditional programming to have an availability of around _________ hours per week.
40 or 50
68
WHEN SHOULD SERVICE BE DELIVERED? To a large extent, this routine reflected __________ (and even legal requirements or trade union agreements) on the appropriate working hours for people and for the sale of products. This situation was ____________ for the people who work because they had to do their shopping during the lunch hour or on Saturdays.
social norms inconvenient
69
WHEN SHOULD SERVICE BE DELIVERED? Historically, most __________ cultures discouraged the opening of stores on Sundays, and in many cases, this was banned by law, reflecting a long tradition based on religious practices  Today, the situation has changed. For some highly responsive service operations, the standard has become ______service — ________ a day, ___days a week, around the world
Christian 24/7 24 hours 7
70
FACTORS THAT ENCOURAGE EXTENDED OPERATING HOURS
71
 There are at least five factors driving the move towards extended operating hours and seven-day operations. The trend that originated in the ___ and _________ has since spread to many other countries around the world.  ________ from consumers.  Changes in _________.  ________ incentives to improve asset utilization  Availability of employees to work during “________” hours  _________ self-service facilities
US & CANADA *** Pressure *** legislation *** Economic *** unsocial *** Automated
72
SERVICE DELIVERY INNOVATIONS FACILITATED BY TECHNOLOGY * Technological Innovations  Development of “______” mobile telephones and PDAs, and Wi-Fi high- speed Internet technology that links users to Internet from almost anywhere  ______-recognition technology  _____ sites  Smart ______ - Store detailed _________ about customer - Act as electronic purse containing digital __________  ___________ channels can be offered together with physical channels, or take the place of physical channels
************************ smart Voice Web cards *********************** information money Electronic
73
Among the factors luring customers to virtual stores are:  Convenience  Ease of search  Broader selection  Potential for better prices  24-hour service with prompt delivery
E-COMMERCE: MOVE TO CYBERSPACE
74
 Recent Developments link websites, customer management (CRM) systems, and mobile telephony
E-COMMERCE: MOVE TO CYBERSPACE
75
 Integrating mobile devices into the service delivery infrastructure can be used as means to:  Access services  Alert customers to opportunities/problems  Update information in real time
E-COMMERCE: MOVE TO CYBERSPACE
76
Having discussed what is being distributed and how, let’s discuss who should be involved in delivering which parts of the service (i.e., information, negotiation, and the core and remaining supplementary services) to the customer. Should a service organization deliver all aspects of its service itself, or should it involve intermediaries to take on certain parts of service delivery?
THE ROLE OF INTERMEDIARIES
77
 In practice, many service organizations find it cost-effective to outsource certain aspects of distribution. Most frequently, this delegation concerns supplementary service elements. For instance, despite their increased use of telephone call centers and the Internet, cruise lines and resort hotels still rely on travel agents to handle a significant portion of their customer interactions such as giving out information, taking reservations, accepting payment, and ticketing.
THE ROLE OF INTERMEDIARIES
78
 ____________ is an authorization granted by the government or company to an individual or group enabling them to carry out specified commercial activities, for example acting as an agent for a company’s product.
Franchising
79
 ___________is one of the most common distribution strategies used, but a range of alternative distribution intermediaries are also available
Franchising
80
 This is done without the level of monetary investment needed for rapid expansion of company-owned and -managed sites.
Franchising
81
 Local marketing activities are typically paid for by the franchisee, but they must adhere to copy and media guidelines prescribed by the franchisor
Franchising
82
 __________ is an agreement or license between two legally independent parties which gives.
Franchise
83
____________- a person or group of people who has the right to market a product or service using the trademark or trade name of another business.
Franchisee
84
 ____________-has the obligation to provide rights and support to franchisees.
Franchisor
85
 ____________ recruits entrepreneurs who are willing to invest their time, effort, and equity in managing a previously developed service concept. In return, the franchisor provides training on how to operate and market the, sells necessary supplies, and provides promotional support at a national or regional level.
Franchisor
86
FRANCHISING DISADVANTAGES While franchising has many success stories, it also has some disadvantages.  Some loss of _______ over delivery system and, thereby, over how customers experience actual service  Effective ________ control is important but yet difficult  Conflict between ____________ may arise especially as they gain experience
control quality franchisees
87
THE CHALLENGE OF DISTRIBUTION IN ________________________________  There are important differences between marketing services within a compact geographic area and marketing services in a federal nation covering a large geographic area, such as the US, Canada, or Australia
LARGE DOMESTIC MARKET
88
 Many firms distribute their services internationally, including cnn, reuters, google, amex, starbucks, hertz, citibank, and mckinsey.  What are the driving forces pushing these firms to go international or even global? and when service companies plan to go international, how should they enter new markets
DISTRIBUTING SERVICES INTERNATIONALLY
89
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  Several forces or industry drivers influence the trend toward ___________ and the creation of transnationally integrated strategy.  As applied to _________, these forces are market drivers, competition drivers, technology drivers, cost drivers, and government drivers. Their relative significance may vary by type of service.
globalization services
90
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  Market factors stimulating the move toward transnational strategies include common customer needs across many countries, global customers who demand consistent service from suppliers around the world, and the availability of international channels in the form of efficient physical supply chains or electronic networks.
MARKET DRIVERS
91
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  The presence of competitors from different countries, interdependence of countries, and the transnational policies of competitors themselves are among the key competition drivers that exercise a powerful force in many service industries.  Firms may be obliged to follow their competitors into new markets in order to protect their positions elsewhere. Similarly, once a major player moves into a new foreign market, a scramble for territory among competing firms may ensue
COMPETITION DRIVERS
92
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  Technology drivers tend to center around advances in information technology — such as enhanced performance and capabilities in telecommunications, computerization, and software; miniaturization of equipment; and the digitization of voice, video, and text — so that all can be stored, manipulated, and transmitted in the digital language of computers.  For information-based services, the growing availability of broadband telecommunication channels with their capability of moving vast amounts of data at great speed is playing a major role in opening up new markets
TECHNOLOGY DRIVERS.
93
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  Big is sometimes beautiful from a cost standpoint. There may be economies of scale to be gained from operating on an international or even global basis, in addition to sourcing efficiencies as a result of favorable logistics and lower costs in certain countries.  Lower operating costs for telecommunications and transportation, accompanied by improved performance, facilitate entry into international markets.
COST DRIVERS
94
FACTORS FAVORING ADOPTION OF TRANSNATIONAL STRATEGIES  Government policies can serve to encourage or discourage the development of a transnationally integrated strategy. Among these drivers are favorable trade policies, compatible technical standards, and common marketing regulations.  The passage of free trade legislation in recent years has been an important facilitator of transnational operations.  For instance, the actions taken by the European Commission to create a single market throughout the EU is a stimulus to the creation of pan-European service strategies in numerous industries.
GOVERNMENT DRIVERS

Finals Service Marketing (10 decks)

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