Explain which factors marketers should focus on when deciding distribution strategies for their service organizations.

Question

What will be an ideal response?

Answer 1

Answers will vary. Distribution strategies for service organizations must focus on such issues as convenience, number of outlets, direct versus indirect distribution, location, and scheduling. A key factor influencing the selection of a service provider is convenience. An example of this is Mac & Mia, a premium "trunk club" for children's clothing. This service targets parents of small children who have little or no time to shop. After a parent completes a style profile for his or her child at Mac & Mia's website, a company representative fills a box with a selection of hand-picked clothing and accessories and ships it. Parents keep what they want and return what they don't want within five days, using an included prepaid envelope. The company provides busy parents with an easy, fun, and convenient way to buy needed items for their children.An important distribution objective for many service firms is the number of outlets to use or the number of outlets to open during a certain time. Generally, the intensity of distribution should meet, but not exceed, the target market's needs and preferences. Having too few outlets may inconvenience customers; having too many outlets may boost costs unnecessarily. Intensity of distribution may also depend on the image desired. Having only a few outlets may make the service seem more exclusive or selective.The next service distribution decision is whether to distribute services to end users directly or indirectly through other firms. Because of the intangible nature of services, many service firms have to use direct distribution or franchising. Examples include legal, medical, accounting, and personal-care services. The most-used form of direct distribution is the Internet. Most major airlines are now using online services to sell tickets directly to consumers, resulting in lower distribution costs for the airlines. Other firms with standardized service packages have developed indirect channels using independent intermediaries. For example, Banfield Pet Hospital formed a strategic partnership with PetSmart to offer veterinary services at PetSmart locations.The location of a service most clearly reveals the relationship between its target market strategy and distribution strategy. For time-dependent service providers such as airlines, physicians, and dentists, scheduling is often a more important factor.