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Service Location and Channels

Professor Musadiq A. sahaf

The Business School

University of Kashmir

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Intended outcome

To identify and examine the issues involvedin the decision concern with location andchannels for services

To study the factors influencing channelstructure; and

To examine the management of channel

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Location and Channel

Decisions

How to deliver the service to the

customer; and

Where the delivery should take place

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Location

The decision a firm makes about

where its operations and staff are

situated. Customer goes to organization:

Restaurant, Bank, Hospital

Organization comes to Customer:

Washing machine repair, Cleaning services Both transact at arm's length:

ATM machines

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Key Considerations in Service

Location

Need and expectation of the customers;

Customs and trends in the industry;

Type of service: technology-based or people

based;

Legal and ethical obligations;

System, procedures, processes and

technology to be used in delivery of service;and

Complementary services

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Channels

Decision that is concerned with who

participates in the service delivery in

terms of both organizations and people.

Participants:

The service provider Intermediaries

Customer

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Marketing channel structures

Direct channel Indirect channel

Service

Provider

Consumers

Service

Provider

Agents

Consumers

Service

Provider

Consumers

Franchisee

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Issues in Channel Structure

The number of intermediaries.

The type of intermediary.

The allocation of value added functions among

channel participants.

The material and technological support that

participants use.

The service itself

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Marketing Channel Strategy

Decisions

Factors affecting

channel choice

Level of

distributionintensity

Market factors

Product factors

Providers factors

Intermediaries factors

Users factors

Environmental factors

Intensive distribution

Selective distribution

Exclusive distribution

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Management of Channel

Channel Captain: an institution in the distribution system ofa product that acts as leader in the channel by dominating and

controlling the working of the channel.

Channel Conflict: Horizontal Conflict and Vertical Conflict Perception;

Communication:

Objectives and Goals;

Decisions;

Roles;

Price discrimination.

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Resolution of Channel Conflict

Bargaining Strategy

Boundary Strategy

Inter-Penetration Strategy

Supra-Organizational Strategy

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Management of Channel

Horizontal Marketing System (HMS)

Vertical Marketing System (VMS)

Corporate VMS

Contractual VMS

Administered VMS

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Franchising

Agreement

Objectives

Image Support

Financial arrangements

Reduction of risk

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Potential channel conflict

Horizontal conflict develop among channelmembers at the same level

Vertical conflict occur between channel

members at different levels

Franchisee FranchiseeE.g.

Service Provider

Franchisee

E.g.

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