MM106 Report Outline

Chapter 17: Marketing Channels for Services

Chapter Introduction:
Our topic for today’s discussion is all about the marketing channels for service or businesses
that offers services. The array of services used by consumers is phenomenally diverse. In
between these extremes are services provided by hotels, auto repair shops, barbers, house
painters, bankers, entertainers, insurance agencies and thousands of others. Services differ
from products in several significant ways, the approach and emphasis used in the marketing of
services are often different. The difference can apply to all four of the basic strategic
components of the marketing mix: product strategy, price strategy, promotional strategy and
distribution strategy. Our discussion in this chapter will focus specifically on the role of
distribution in the marketing of services. After discussing the key characteristics of services that
distinguish them from products, we will examine how marketing channel strategy, design and
management relate to each of these special characteristics of services and will then discuss
some additional perspectives on the relationship between services and marketing channels.

Implications of service characteristics for channel management

- These service characteristics na nadiscuss nila can have a significant impact on how
channels are managed and how services are delivered to customers. In this part, we will
discuss the key implications of service characteristics for channel management, how it
affects the marketing channel management.

Inseparability and channel management

- Kung sa product pwede pa madistinguish yung quality sa other factors, sa service hinde.
For example na lang, pwede nating masabi na ang ganda ng quality ng bag dito sa store
na to, walang makakapantay sa quality, pero ang poor ng customer service nila ganon or
yung after sales service. However, if service ang pinaguusapan, hindi natin sya
madidiferentiate sa service provider kasi yung pinaka product ng service is yung
outcome ng pagdeliver ng service. Example, if a customer goes to an automobile service
station to get an oil change, or to the bank to make a deposit, or to the dry cleaner to
have shirts laundered, the channels with which they interact are the manifestations of
the service provided. Because services do not exist apart from the provider of the
service, the service and the channel providing it are virtually inseparable. All aspects of
the marketing channel with which the consumer comes in contact are thus a reflection of
the quality of the service. Factors may include physical facilities (katulad nung mga na-
 access nila, like parking, external signs, appearance of the building, exterior, interior
decor, lighting, climate control fixtures, cleanliness), also yung people/staffs na
nakasalamuha nila like (how they dress, use of proper language, if they’re helpful,
knowledgeable), all of it is representation na or reflection ng quality ng service na
pinrovide ng isang business sa customer, hindi yon inseparable. If one of those channels
does not do its job well, the service will not be received well by the customer. It is crucial
to establish strong relationships and communication channels to ensure seamless
delivery and customer satisfaction.

Difficulty of standardization and channel management

- Services can vary in quality due to their reliance on human interaction and
customization. Services provided today may not be the same as the services provided
yesterday. This is because there is the involvement of human beings in the process.
Every client receives different services relying upon the time on which service is
provided during the day, the mood of the service provider, and other factors. Although
attaining absolute perfection in the standardization of services is a theoretical ideal not
achievable in the real world, organizations can still attempt to achieve the maximum
possible consistency or at least close to that ideal.
- Standardization is difficult in providing service as there are so many factors that prevents
it from doing so. However, this implies that channel management just needs to ensure
consistency and standardization across different channels and service providers, this
can be done through training programs, quality control measures, and performance
monitoring can help maintain a consistent service experience for customers.
(wag na basahin, in case lang: safety net means hindi secured yung owner or service provider
sa any uncertainties when they were providing their service to the customers.)

Chapter 18: International Channel Perspectives

In this chapter we are to talked about the international channel perspectives, mainly the key
considerations that the channel manager should address if the firm’s marketing channels extend
into international markets.

Behavioral Processes in International Channels

(already discussed in chapter 4, the important part that behavioral dimensions play in marketing
channel systems.)
When we talked about behaviors in marketing, a good communication and different behavioral
aspects will always be present. The behavioral side can be even more important in foreign
channels than in domestic channels because cultural patterns in a number of countries often
place more emphasis on person-to-person relationships.

One of a great example here is the Bose company’s attempt to break into Japanese market.
Bose is from United States, meaning different and culture nito from other countries especially
Asian Countries, we Asians have really different cultures in our country, kahit saang aspect pa
yan, even into business. Throughout the years hindi nagging effective lahat ng efforts nila and
nag end ito sa pag pull out nila sa bansa. The founder of Bose has identified the reason why
they ended up in such situation, it is because his people didn’t establish close personal ties with
their Japanese distributor. But why do they need those ties? It is because Japan is an intensely
relationship-oriented society. Personal connections are the very essence of doing business, and
these connections can be developed through long hours of social contact or anything
professional that will make you gain personal connections to them. And as per Bose’s export
sales staff, hindi sila nakapag allow ng time (face-to-face) na maconvince yung kanilang
Japanese distributors about sa mga advantages ng kanilang product pagdating sa uniqueness
such as its direct/reflecting audio technology that bounces sound waves off walls rather than
sending them directly toward the listener. Not only Bose but many other firms also failed in
Japan for the same reason. This only means na when a firm attempts to design and manage
channels in other countries in the world, they must consider the behavioral dimensions of
channel relationships na commonly accepted sa country na yon.

Designing International Channels

- We already discussed this part sa chapters 6&7 I think pero ang nirerefer naman doon is
the design of distribution channel in a domestic setting, it somehow resembles the
design in an international setting. Ang international setting kasi differs in the channel
structure alternatives which are determined by the particular approaches na madidiscuss
natin when we go on.
- (in case lang to, di talaga included) Sa phase 1-3, phase 1: when there is a need for a
channel design decision, both can be viewed from domestic and international
perspectives. It’s either design an entirely new channels or modify existing ones to reach
the markets. Phase 2: setting and coordinating distribution objectives, we both need an
objective to where it will reach specifically. Phase 3: specification of distribution tasks, to
meet the objectives. Phase 4: is kinda takes a different twist. Dito na kasi papasok yung
mga channel structure alternatives na sa international setting lang nagwowork.

Indirect exporting - Indirect exporting refers to selling products to a domestic company that
resells those products in foreign markets. This approach involves working with a domestic
intermediary, such as a distributor or trading company, to reach international markets.
 - casual exporting - Casual exporting can be done through direct sales to foreign buyers or
by using intermediaries such as export agents or trading companies. This form of exporting is
often pursued by small businesses or individuals who have surplus products or unique items
that can be sold in international markets for additional income or expansion opportunities.
Casual exporters may engage in international trade opportunistically or in response to specific
customer inquiries or orders. They often handle the export process themselves or with limited
assistance from intermediaries, such as freight forwarders or customs brokers. And ayon nga,
this approach is much applicable for small businesses nga para ma-explore nila yung
international markets and ma-expand nila yung kanilang customer base without significant
investment or ongoing export operations.
- trading companies - Foreign trading companies are entities that specialize in conducting
worldwide trade on a large scale. Isa sa mga advantages ng pakikipag-partner sa mga foreign
trading company is yung rapid entry into foreign countries na kaya nilang i-provide. Yung mga
companies na ‘to ay nakapag-established na ng good relationships and huge knowledge of
global markets, allowing them to navigate the complexities of international trade more efficiently.
They facilitate the export of goods by sourcing products from manufacturers and selling them to
foreign buyers. Trading companies typically purchase goods from multiple suppliers and
consolidate them into larger shipments for export. They handle logistics, documentation, and
other export-related activities on behalf of the manufacturers. This indirect approach allows
manufacturers to focus on production while relying on trading companies to handle the
complexities of international trade. By acting as intermediaries, sila yung nagiging bridge
between manufacturers and foreign markets, enabling goods to reach customers in different
countries. They play a crucial role in facilitating global trade by connecting buyers and sellers
across borders.

Supporting Foreign Channel Members

- We already discussed this topic which is providing support for channel members pero in
domestic setting naman. Now in international setting, these eight are the factors which is
crucial in general when it comes to leading the channel members.
- First is adequacy of margins, is crucial to ensure their profitability and motivation to
promote the company's products or services. Margins refer to their profit, since total
different ang costs sa domestic kesa sa foreign, it is much better na mag- conduct ng
market research and analysis to determine the appropriate margin levels that will attract
and retain capable channel partners. Makakatulong ito for their success and
commitment to promoting the company's products or services in foreign markets.
- Next, territorial protection naman, it can provide a sense of security for foreign
distributors kasi ine-ensure nito na they have exclusive rights to a specific market or
territory, which means they don’t need to worry that much about competing with other
distributors. This can also motivate them to promote your product well.
 - Advertising support: By providing advertising support to foreign distributors and dealers,
companies can help them overcome the challenges of limited financial resources and
lack of advertising expertise. This approach will be a great help to effectively promote
one’s product in a foreign market.
- Financial assistance: Since limited nga yung financial resources ng mga foreign
distributors, nakakaapekto ito sa pag promote ng product, so giving them financial
assistance such as extended credit terms could be a big of help. This will shows that the
American firm is willing to invest in their partner's growth and development, which can
help build trust and loyalty between the two parties. This can strengthen the partnership
and lead to long-term mutually beneficial relationships.
- Sales and service training, business advice, and market research: Sales and service
training can be particularly useful in markets where cultural differences and language
barriers may pose challenges. Business advice can provide foreign distributors with
guidance on various aspects of their operations, such as inventory management, pricing
strategies, and market positioning. Makakatulong ito to help them make informed
decisions. Market research can provide valuable insights into the local market, including
consumer preferences, competition, and market trends. These forms of support can
enhance the capabilities and competitiveness of foreign distributors, enabling them to
better serve their customers and drive mutual success in the market.
- Missionary selling: Missionary selling can be an effective approach to penetrate new
markets and establish a presence. By providing education and information about their
products or services, American firms can help foreign distributors build credibility and
trust with potential customers.

By providing comprehensive support to foreign channel members, companies can enhance their
performance, strengthen the partnership, and achieve their international business objectives.