ion of services

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PLACEPLACE

Presented By-

Pratik Kumar

Preeti Raj

Priya Raj

Priyamvada ChouhseyPromit Roy

Purti Pradhan

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y What is Service?

y Place

y Factors of service responsible for decision of place

y Service location

y Access strategies for location

y Classification by locationy Important questions for a service firm

y Inputs for location decision

y Distribution of services

y Distributors for service delivery

y Flowchart of service distribution

y Franchisingy Agents/Brokers

y Electronic channels

y Innovations in methods of distributing services

y Working a distribution system

y Strategies for channel management

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y Service is a type of economic activity that isintangible, inseparable is not stored and doesnot result in ownership.

y A service is consumed at the point of sale.y Examples of services include the transfer of

goods, such as the postal service delivering mail,and the use of expertise or experience, such as a

person visiting a doctor.

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The location where the services will beprovided or consumed.

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DUE TO intangibility and inseparability ofservices a firm has to take decision regarding

place of service The decision regarding place of service can be

divided into :

Location

Distribution of service

FACTORS OF SERVICES RESPONSIBLE

FOR DECISION OF PLACE :

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The point at which the service is availableto the customer is service location.

Location has different features ²y Proximity-location of service outlet should

be close to the target market.y Image-image of the company should match

to the corporative image of servicecompany.

y Parking facility- service outlet withoutparking facility is less attractive.

y

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Convenience-it is measured in terms of public

transport, safety & security.

Accessibility to other services- electricity,telecommunication, water, sanitation etc.

Competitive advantage- location that providecompetitive advantage should be preferred.

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Strategies can be developed which meets theneed of each segments.

y AGE-people with different age group preferreddifferent locations for services. E.g.. Cinemas &video rental shops.

y ECONOMIC STATUS-it is based on economic

conditions of the people. E.g. home delivery.y Psychographic segmentation-it deals with life

style of people.E.g. some prefer to travel largedistance to a restaurant because it suits to them.

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CULTURAL BACKGROUND -some individualpredispose them to seek particular kind ofaccessibility.

HIGH FREQUENCY -users may place greaterpremium on easy accessibility than casual ones.

LEVEL OF ACCESS -level of access to service

can directly affect customer·s operating cost.

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ConsumerService

Provider

Service

ProviderConsumer

ConsumerService

Provider

Place of Service

Delivery

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There is a whole range of inputs into thelocation decision . These are sourced within

the organization from the externalenvironment and from professional agencies.The relative importance of the informationand its impact on the decision will clearly

vary from situation to situation.Examples: hotel convenience for the citycentre,for the location of a theme parkweather will be a factor.

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Human resources

Availability of 

labour  Local IR Practices

Operations

 Nature of delivery

system

Staff requirements

Equipmentsrequirements

External environment

Planning legislationCentral/ Local

Government support

Professional

agenciesMarket research

Property services

Finance

Sources of funds

Location related

costs

Marketing Size of potential

market

Location of 

customers

Customers

requirements

LOCATION

DECISION

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Service firms need to select such serviceproviders who are capable of managing serviceoutlets efficiently and provide quality services

to the consumers. Service firms can opt for both direct

distribution or private channels or they can optfor both to reach the target market.

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y In case of distribution through a middleman ,there are two marketers:

1. Service Principal: Service Principal is the service

originator.

2. Service Deliverer: ServiceDeliverer is theprovider of the services.

y There are 4 choices available in the flow ofdistribution of services which can be

understood from this flowchart:

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Mc.Donald

Dominos

NIIT DHL

Taj Heritage

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Business Expansion and revenue gains:Service companiescan reach more markets with the help of franchisees.

Consistency in outlets:Service companies can ensureconsistency with the help of agreements and contracts withthe franchisees.

Knowledge of local markets:Adequate information relatedto the local markets is provided through the franchisees.

Sharing financial risk and less investmentburden:Franchisees invest money and other resources forperforming services as per the requirements of

franchiser.T

hus burden is reduced.

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Problems in maintaining and motivatingfranchisees:In case of outside independentoperators,it is more difficult to motivate them.

y Quality inconsistency may affect companyimage:Many a time the services being providedby the franchisees are not as per thespecifications.

y

Control of customer relationship by thefranchisee:Franchisees are involved in managingservice encounters they have a chance to buildrelationships with the customers.

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Service provider agent (IRCTC) 

Selling Agent

Brokers ( Share Broker)

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Low selling and distribution costs:Agents andBrokers work on commission basis.

Specialised skills and knowledge of Agents andBrokers:Persons who choose to be agents and

brokers will generally possess specialised skills inpersuading people.

Wider representation in the market:Agents andBrokers have a wider representation in the market.

Knowledge of the local market:Agents and Brokershave knowledge on various issues regarding localmarket.

Customer choice:Customers may choose knownintermediaries for providing services.

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Quality control: Service firms can reach customerswithout any variation in the service packagethrough electronic channels.

Low cost:T

he cost incurred in reaching customerthrough electronic channel is low.

Customer convenience:Whereever and whenervercustomer want the service they can access it.

Wide distribution:Extensive market coverage ispossible.

Customer choice: Wide variety of services may beprovided as a choice to the customers.

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There have been considerable innovations,inrecent years,in methods of distributingservices.This contrasts with views expressed

some years ago that service marketer had laggedin using innovative marketing practices.Here areincluded some examples of innovations:

y The growth of rental services

y The growth of franchising.

y The growth of service integration.

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While designing a distribution system for services,itis necessary to take care of its executioneffectiveness.A design of the system with poorexecution will certainly yield poor or sometimes

negative results.If the distribution system isdesigned properly,it can be used as a truly effectivecompetitive weapon.Points that help in making aneffective distribution systam are:

y Allign the system properly.

y Remember each part of the sales cycle.y Keep intermediaries loyal.y Pay the price to do multi-marketing correctly.y Control the pace of change.

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Channel management is critical in servicecompanies as the quality perception ofcustomers depends upon the performance of

distribution.U

nless companies follow effectivestrategies for channel management,it is notpossible to achieve the desired marketingobjectives.The following strategies are vital inthis respect:

y Control Strategies.

y Empowerment Strategies.

y Partnering Strategies.

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