Marketing Exchange --Creating Value

By participating in the service delivery process, customers create value for themselves

Importance of Other Customers in Service Delivery

Other customers can detract from satisfaction

disruptive behaviors excessive crowding incompatible needs

Other customers can enhance satisfaction

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mere presence

How Customers Widen Gap 3

Lack of understanding of their roles Not being willing or able to perform their roles No rewards for good performance Interfering with other customers Incompatible market segments

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Customer Roles in Service Delivery

Productive Resources Contributors to Quality and Satisfaction

Competitor s
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Customers as Productive Resources

partial employees

contributing effort, time, or other resources to the production process

customer inputs can affect organizations productivity key issue:

should customers roles be expanded? reduced?

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Customers as Contributors to Service Quality and Satisfaction

Customers can contribute to

their own satisfaction with the service

by performing their role effectively by working with the service provider

the quality of the service they receive

by asking questions by taking responsibility for their own

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Strategies for Enhancing Customer Participation

Effective Customer Participation

Define Customer Jobs

Recruit, Educate, and Reward Customers

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Manage the Customer Mix

Strategies for Enhancing Customer Participation

1. Define customers jobs - helping himself - helping others - promoting the company 2. Individual differences: not everyone wants to participate

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Strategies for Recruiting, Educating and Rewarding Customers

1. Recruit the right customers 2. Educate and train customers to perform effectively
On site --- place and function orientation

3. Reward customers for their contribution 4. Avoid negative outcomes of inappropriate Manage the customer participation Customer Mix
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Service Provider Participants

service principal (originator)

creates the service concept

(like a manufacturer)

service deliverer (intermediary)

entity that interacts with the customer in the execution of the service
(like a distributor/wholesaler)

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Services Intermediaries

Franchisees

service outlets licensed by a principal to deliver a unique service concept it has created

e.g., Jiffy Lube, Blockbuster, McDonalds

Agents and Brokers

representatives who distribute and sell the services of one or more service suppliers

e.g., travel agents, independent insurance agents

Electronic Channels
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all forms of service provision through electronic means

Service Provider Participants

service principal (originator)

creates the service concept

(like a manufacturer)

service deliverer (intermediary)

entity that interacts with the customer in the execution of the service
(like a distributor/wholesaler)

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Services Intermediaries

Franchisees

service outlets licensed by a principal to deliver a unique service concept it has created

e.g., Jiffy Lube, Blockbuster, McDonalds

Agents and Brokers

representatives who distribute and sell the services of one or more service suppliers

e.g., travel agents, independent insurance agents

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Electronic Channels

Benefits and Challenges for Franchisers of Service

Benefits:

Challenges:

Leveraged business format for greater expansion and revenues Consistency in outlets Knowledge of local markets

Difficulty in maintaining and motivating franchisees Highly publicized disputes and conflict Inconsistent quality

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Benefits and Challenges for Franchisees of Service

Benefits:

Challenges:

An established business format National or regional brand marketing Minimized risk of starting a business

Encroachment Disappointing profits and revenues Lack of perceived control over operations High fees

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Benefits:

Benefits and Challenges in Distributing Services through Agents and Brokers

Challenges:

Reduced selling and distribution costs Intermediarys possession of special skills and knowledge Wide representation

Loss of control over pricing Representation of multiple service principals

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Benefits:

Benefits and Challenges in Electronic Distribution of Services

Challenges:

Consistent delivery for standardized services Low cost Customer convenience Wide distribution choice

Price competition Inability to customize with highly standardized services Lack of consistency due to customer involvement

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Common Issues Involving Intermediaries

conflict over objectives and performance difficulty controlling quality and consistency across outlets tension between empowerment and control
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