Chapter 17: Marketing Channels for Services

Intangibility of Services
– Much less tangible than physical products
– Difficult to differentiate brands
Inseparability of Services
– Tied to provider of service
– Services produced do not exist as entities in and of themselves
Difficulty of Standardization
Variability associated with human element is more likely to creep into production of services
Customer Involvement in Services
Consumers are more involved in the production of services
Perishability of Services
Services cannot be produced in anticipation of customer needs & then stored in inventory until purchased
Intangibility & Channel Management
Marketing channels provide the most direct and potent basis for making a service more tangible
Inseparability & Channel Management
Service provider does not have the “safety net” that is available to the precept manufacturer, whereby the product itself can make up for poor distribution
Difficulty of Standardization & Channel Management
In the case of franchises, it is difficult for channel manage to get the franchisees to deliver a consistent level of service
Customer Involvement & Channel Management
Channel design should facilitate customer involvement
Perishability of Services & Channel Management
Channel must be designed to connect as efficiently as possible to those providing service with those desiring to obtain it
Additional Perspectives
1. Shorter Channels
2. Franchised Channels
3. Customization of Services
4. Channel Flows
Shorter Channels
– length, intensity, types of intermediaries
– section of intermediaries
– need to motivate intermediaries
Franchised Channels
Business format benefits:
– scale of economies of large organization
– drive & motivation
– degree of control to standardize services
Customization of Services
Small-scale channel consisting of local independent service providers can help high degree customization services
Channel Flows
– Flows that “carry” service through the channel are those of information, negotiation, and promotion
– Many can be handled electronically

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