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Services Marketing
Notes channels, like going for direct distribution. There is already a groundswell of resistance against
the entry of mega retailer Wal-Mart in India by several sections of the industry: traders, other
retailers, suppliers, politicians, opinion leaders, etc.
Service Firms Considerations
A major factor that influences the choice of the channel is the service firms own considerations,
priorities and situation.
Desire for Greater Control of the Channel: Service firms who lay great store by the right service
experience, where an encounter leads to a positive experience by the customer and finally
customer retention, would like to take control of the service delivery process and therefore
service distribution. This happens when the service is critical to the offer, and a stronger control
on service quality is required.
Management ability of the Service Producer: Some service firms may not have distribution
ability commensurate with or demanded by their service offer design and delivery. Intermediaries
are then involved in the distribution of the service offer.
Financial Resources of the Service Firm: A service firm strong in its finances or financial access
will be able to distribute its offers itself; a weaker firm might farm out the distribution to
middlemen. Distribution of the service through such channels like franchising and intermediaries
like franchisees helps a service firm to increase its capital and get its service brand spread in a
cost-effective way.
Example: Computer education pioneer NIIT charges a hefty twenty-five lac rupees for
each of its franchises.
Services Provided or Shared by the Firm: The choice of a channel is decided by the service
producer depending on the types of services demanded by the intermediaries. The middlemen
like retailers of mobile phone products selling SIM cards, handsets, etc., insist that the glow
signs, tradeshows and exhibition costs are shared by the service firms. Many retailers insist that
the service firm spend on national advertising, which should precede distribution. If the demands
are felt to be unreasonable, then the service firm must seek alternative channels of distribution.
Case Study Indian Coffee House
he Indian Coffee House (ICH) is now a part of the youth and cultural milieu of
India. It has over 250 branches of its unique restaurants all over India delivering a
Tconsistent fare of good food in warm ambience and grace, with a flavour of colonial
India and leisure. Born as a South Indian idea, it is now well spread in nine states over
Central India (Madhya Pradesh and Vidarbha region of Maharashtra), and thinly in the
South, East (Kolkata), and North (New Delhi). It has, over the years, metamorphosed from
a humble coffee house into a chain of restaurants. It was started by the Indian Coffee
Plantation Workers Cooperatives in the fifties and is registered and headquartered at
Jabalpur, a colonial town in Madhya Pradesh. It has multiple outlets in Jabalpur, Indore,
Bhopal, Raipur, Gwalior, Nagpur, Kolkata, New Delhi, etc. Its original mission was mostly
social and two-fold:
1. To popularize the usage of coffee in the predominantly tea-drinking North. The
strategy was market penetration as well as market development increasing coffee
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