Page 223 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes  Price Stability: Often, the intermediaries absorb price hikes to give an image of stability
to the customer. The continuity of price is an attempt at overcoming intra-intermediaries
competition.
Post-Sales Service: Intermediaries give post-sales services like home delivery, installation

and maintenance and repairs. They also channel the money received as payment, in the
reverse direction.

Title to the Goods: Although this does not really work in services due to the intangibility

factor, it is very relevant in retailing. Intermediaries like retailers take title to the goods
and services and do transactions in their own name. The middlemen share the risks with
the vendors of the merchandise and physical possession of the goods enables them to
service the customer’s demands in time.

Notes Activities of a Retailer

SALES SPECIALIST FOR PURCHASING AGENT FOR
PRODUCERS BUYERS
---------------------------- -------------------------

 Provides Market  Anticipates wants
Information M  Subdivides large
 Interprets Consumers I quantities of products
wants D  Stores products
 Promotes producers’
products D  Transports products

 Creates assortments L  Creates assortments
 Stores products E
 Provides financing
 Negotiates with
customers  Makes products

 Provides financing M readily available
E  Guarantees products
 Owns products
N  Shares risks
 Shares risks
12.1.3 Designing Effective Distribution Channel

It is not necessary that firms in similar services should have the same distribution systems. Nor
is it necessary for service firms to choose only one distribution system. Insurance firms can
choose to distribute its policies through its advisors or agents; through its own employees in
branches; or through intermediaries and direct sales agents.

Example: ICICI Prudential and OM Kotak are two private insurance companies who sell
their products through advisors, the Internet auctioneer Bazee.com, etc.

A service firm should choose a distribution channel in line with its strengths, which would
satisfy its customers and beat the competition. The following decisions should be taken
sequentially:
1. Specifying the role of distribution: The service firm should be clear about the role it
envisages of distribution in the context of the other elements of its marketing mix. The
distribution should synchronize with the other marketing orientation and objectives. A
courier and package delivery firm can use distribution in order to be as good as the

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