Channels for Services

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Channels for Services

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Title: Channels for Services


1
Channels for Services International Marketing
  • Module 11
  • Chapters 17 and 18

2
Notes for students
  • This is the last lecture for the semester.
  • Notes on exam preparation are provided on the
    unit home page at
  • http//www.usq.edu.au/ancil/fob/b-51363

3
Lecture Overview
  • Channels for services
  • four special characteristics of services
  • implications for channel management
  • role of service intermediaries
  • managing service intermediaries
  • Channels for international marketing
  • marketing channel environment
  • modes of entry into foreign markets
  • motivating international channel members

4
Unique characteristics of services
  • Services are intangible
  • cannot be seen
  • no physical flow
  • difficult to evaluate
  • more risky for the customer
  • Services are inseparable
  • simultaneous production and consumption
  • providers skills and training are the product
  • location and physical evidence become more
    important

5
  • customer involvement
  • customer is a co-producer
  • degree of involvement varies
  • impacts on degree of customisation
  • variable
  • people are an integral part of the product
  • human element leads to variations in service
    quality
  • delivered in real time remixed to suit needs
    of customer

6
Service characteristics cont.
  • perishable
  • cannot be stored or inventoried
  • short life span
  • may create fluctuations in demand
  • What are the implications for channel management?

7
Managing intangibility
  • reduce risk for customer
  • make the product more tangible
  • How??
  • physical evidence
  • uniforms, atmosphere, décor
  • association with image or object
  • branding symbols, logo

8
Managing inseparability
  • physical environment is important
  • signs, décor, atmosphere
  • contact people - service encounters
  • scripts, roles
  • appearances and attitudes
  • may need to locate near the customer
  • may need to use service intermediaries
  • functions performed
  • refer to table 11.1, study guide p. 11.5

9
Managing customer involvement
  • To what extent do customers want to be involved ?
  • Can we facilitate involvement?
  • To what extent can the service be customised ?
  • May need to manage other customers in the service
    environment

10
Managing variability
  • Standardise service quality
  • How??
  • Selection
  • Training scripts and roles
  • Support
  • Reward
  • Standardise service delivery
  • industrialise - replace people with machines
  • Franchising standard operating procedures

11
Managing perishability
  • need to manage supply and demand
  • How???
  • Stimulate off-peak
  • price discounts
  • Promotions
  • Manage peak
  • Self-service
  • Part-time staff
  • Reservations and queuing

12
Role of service intermediaries in service delivery
  • Refer to reading 11.1
  • Matching buyers and sellers
  • negotiating prices and terms
  • facilitating communication between the service
    provider and the customer
  • providing information
  • offerings, prices, expectations

13
Strategies for effective delivery through service
intermediaries
  • Control strategies
  • Empowerment strategies
  • Partnership strategies

14
Control strategies
  • set standards for performance
  • Sales, service
  • measure performance
  • reward on the basis of performance

15
Empowerment strategies
  • allow greater flexibility and autonomy
  • Help the intermediary to develop
    customer-oriented service processes and standards
  • provide needed support systems
  • Develop (train) intermediaries to deliver service
    quality
  • change to a cooperative management structure

16
Partnering strategies
  • capitalise on the skills and strengths of both
    parties
  • relationship marketing
  • goal alignment
  • consultation and cooperation

17
Channels for international marketing
  • Complex channel environment
  • cultural, legal, political, technological,
    demographic, competitive, economic, etc.
  • lack of necessary infrastructure
  • may need to adapt product, promotion etc
  • Channel member availability
  • may be locked up
  • may be able to piggyback

18
Economic environment
  • Level of economic development
  • Income per capita
  • Distribution of income
  • Exchange rates
  • Currency values
  • Economic cycles

19
Competitive environment
  • Aggressive global competitors
  • Not protected by ACCC
  • Different types of competitors than those faced
    in the domestic market
  • WWW
  • Not a fair playing field
  • Bribes etc.

20
Socio-cultural environment
  • Different cultures
  • High v low context
  • Different ways of doing business
  • Relationships v transactions
  • Different buying processes
  • Roles, sources of information
  • Processes and habits
  • Different needs and wants
  • Different products
  • Attitudes to service

21
Technological environment
  • EDI
  • WWW
  • telecommunications
  • Levels of technological advancement differ across
    international markets

22
Legal/political environment
  • Different legal systems
  • Degree of regulation
  • Degree of government intervention
  • Political stability
  • Need to obtain legal advice
  • Austrade etc. can assist

23
Modes of entry
  • Indirect exporting
  • casual exporting
  • trading companies
  • export management company
  • cooperative or piggybacking
  • Direct exporting
  • in-house
  • foreign distributors or agents

24
  • Joint venture
  • local partner, licensing, franchising, OEM
  • Direct foreign ownership
  • set up manufacturing in local country

25
Motivating international channel members
  • Find out channel members needs and problems
  • Different because of environmental factors
  • More difficult to gather feedback and information

26
  • Supporting channel members
  • Time
  • Cost
  • Tailor to different needs
  • Communication is very important

27
  • Leading foreign marketing channels
  • Complexity due to differences
  • Based on customs and traditions

28
Summary
  • Channels for services
  • four special characteristics of services
  • implications for channel management
  • role of service intermediaries
  • managing service intermediaries
  • Channels for international marketing
  • Marketing channel environment
  • Designing international channels
  • modes of entry into foreign markets
  • Motivating international channel members

29
Exam Preparation
  • 2 hours
  • worth 40 overall mark
  • 12 short answers
  • 1/2 - 2/3 page
  • one reading will be examined
  • all modules are examinable
  • based on review questions provided at the end of
    each module

30
  • for each question
  • define
  • is there a key term that needs defining?
  • identify - is there a list of factors?
  • explain or discuss
  • demonstrate your knowledge of the underlying
    theory
  • discuss implications for channel management
  • apply
  • give examples where requested and if possible

31
  • revise examples
  • manage your time
  • use perusal time wisely - brain dump on the blue
    examination paper
  • 10 minutes per question
  • spend 1 minute planning (content, layout)
  • answer the easy questions first, but keep
    questions in order in the book
  • write something logical on each question
  • start each question on new page

32
  • use a black pen
  • consider writing on every other line
  • Dont leave your revision to the last minute
  • deep and shallow learning
  • final tip - study hard and pray
  • Good Luck!
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