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�ݺ�ߣ © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 5 – Page 1
Chapter 5:
Distributing Services
Through Physical
And Electronic Channels
Services Marketing 7e, Global Edition

Overview Of Chapter 5
 Distribution in a Services Context
 Options for Service Delivery
 Place and Time Decisions
 Delivering Services in Cyberspace
 The Role of Intermediaries

Distribution in a Services
Context

Applying the Flow Model of
Distribution to Services
The three interrelated elements of distribution are:
 Information and promotion flow
 To get customer interested in buying the service (information &
consultation petals)
 Negotiation flow
 To sell the right to use a service (order taking, billing and payment
petals)
 Product flow
 To develop a network of physical facilities (or online sites) (the
core product and the remaining petals)

Distinguishing between Distribution
of Supplementary and Core Services
 Most core services require
physical locations (theater
for a show, hotel)
 Many supplementary
services are informational;
can be distributed widely
and cost-effectively via
other means
 Telephone
 Internet

Information and Physical Processes
of Augmented Service Products

Options for Service Delivery

Distribution Options for Serving
Customers
 Customers visit service site
 Convenience of service factory locations and operational
schedules important when customer has to be physically present
(resturant, hotel, theater, bus service)
 Service providers go to customers
 Unavoidable when object of service is immovable
 More expensive and time-consuming for service provider ( house
paintaing, mobil car wash)
 Service transaction is conducted remotely
 Achieved with help of technological logistics and
telecommunications (otlob.com, booking.com)

Channel Preferences Vary Among
Customers
 For complex and high-perceived risk services, people tend
to rely on personal channels (loans vs. credit cards)
 Individuals with greater confidence and knowledge about a
service/channel tend to use impersonal and self-service
channels
 Customers with social motives tend to use personal
channels
 Convenience and time is a key driver of channel choice
(saving time and effort)

Place and Time Decisions

Place Decisions of Service Delivery
 Location constraints
 Operational requirement (e.g., airports)
 Geographic factor (e.g. ski resorts, diving centers)

Place Decisions of Service Delivery
 Ministores
 Creating many small service factories to maximize geographic
coverage
 Separating front and back stages of operation
 Purchasing space from another provider in complementary field
 (ATM IN MIU,PNB IN CAREFOUR ,CInnabon MIU)
 Locating in Multipurpose Facilities
 Proximity to where customers live or work
- Malls or airports

Time of Service Delivery
 Traditionally, schedules
were restricted
 Service availability limited to
daytime, 40-50 hours a week
 Today
 For flexible, responsive
service operations: 24/7
service, 24 hours a day, 7
days a week, all around the
world

Delivering Services in
Cyberspace

Service Delivery Innovations
Facilitated by Technology
 Technological Innovations
 Development of “smart” mobile telephones and presence of Wi-Fi
 Websites
 Smart cards
- Store detailed information about customer
- Act as electronic purse containing digital money
- (el shayea card)
 Electronic channels can be offered together with physical
channels, or replace physical channels

E-Commerce: Move to Cyberspace
 What are the factors that encourage you to use virtual
stores?
 Convenience
 Ease of search
 Broader selection
 Potential for better prices (to increase online traffic)
 24-hour service with prompt delivery

Role of Intermediaries

Splitting Responsibilities
for Service Delivery
Challenges for original supplier
● Act as guardian of overall process
● Ensure that each element offered by intermediaries fits overall service concept

Splitting Responsibilities
for Service Delivery
 Billing and payment
 Order taking

Franchising
 Franchisor provides training, equipment, and support
marketing activities.
 Franchisees invest time and finance, and follow copy and
media guidelines of franchisor.
 Advantages:
 Expand delivery of effective service concept without a high level of
monetary investment
 Franchisees are motivated to ensure good customer service and
high-quality service operations

Franchising
 Disadvantages of franchising
 Loss of control over delivery system and how customers
experience actual service
 Effective quality control is difficult
 Conflict between franchisees may arise especially as they gain
experience

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