Service Location and Channels

Professor Musadiq A. sahaf The Business School University of Kashmir

Intended outcome

To identify and examine the issues involved in the decision concern with location and channels for services To study the factors influencing channel structure; and To examine the management of channel

Location and Channel Decisions

How to deliver the service to the customer; and Where the delivery should take place

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

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

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

Marketing channel structures

Direct channel
Indirect channel

Franchisee

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

Marketing Channel Strategy Decisions

Factors affecting channel choice

Market factors Product factors Providers factors Intermediaries factors Users factors Environmental factors

Level of distribution intensity

Intensive distribution Selective distribution Exclusive distribution

Management of Channel

Channel Captain:
Channel Conflict:

an institution in the distribution system of a product that acts as leader in the channel by dominating and controlling the working of the channel. Horizontal Conflict and Vertical Conflict Perception; Communication: Objectives and Goals; Decisions; Roles; Price discrimination.

Resolution of Channel Conflict

Bargaining Strategy Boundary Strategy Inter-Penetration Strategy Supra-Organizational Strategy

Management of Channel

Horizontal Marketing System (HMS) Vertical Marketing System (VMS)

Corporate

VMS Contractual VMS Administered VMS

Franchising

Agreement Objectives Image Support Financial arrangements Reduction of risk

Potential channel conflict

Horizontal conflict develop among channel members at the same level

E.g.

Franchisee

Franchisee

Vertical conflict occur between channel members at different levels

Service Provider

E.g. Franchisee

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