services retailing AND LOGISTIICS.ppt

7/29/2019 services retailing AND LOGISTIICS.ppt

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Goods - things you can touch - tangible

Services - things you cant touch - but youcan see their effect intangible services are not physical, they are

intangible


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A Service is a type of a product.

a deed performed by one party foranother

Discussions about the marketing of goods

apply to services as well.Services have special characteristics thatmake them different than products.

Service


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A product without physical characteristics;

a bundle of performance and symbolicattributes designed to produce consumerwant satisfaction.

Service


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Tangible

touch

see

taste

smell

Intangible

cant see

cant touch

cant smell

cant taste

Tangible / Intangible Attributes


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Goods and Services: Scale ofElemental Dominance


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1. Intangibility - u cant touch this

2. Production (or performing the service)and Consumption (using the service) -

happens at the same time

3. Heterogeneity - services are notalways delivered the same way

4. Perishability - cannot be put ininventory or stored for later use

ie. You cant buy 2 haircuts

4 Characteristics of Services


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Services cannot be stored

Services cannot be protected throughpatents

- therefore a really great travel package and

service can be copied

a really great physical object can be

patented, and NOT allowed to be copied

Characteristics of Services


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Hard to explain and display Services if you

cant see them

Prices are difficult to set - depends on

customers expectations



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Marketing Strategies

stress tangible cues, eg. Smiling face use personal information, sources, references

use word-of-mouth

contact customers after they buy to stimulate

continued enthusiasm and hope they talk it up



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2. Inseparability of Production (orperforming the service) and Consumption(using the service) - happens at the same

time


Many people involved in delivering a service

mass production of services is hard to do


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2. Inseparability of Production (orperforming the service) and Consumption(using the service) - happens at the same

time


Marketing Strategies

Emphasize how much you train your people - so

their ability to give you good service will be high

Have many locations so customers can get to you

ie. Insurance sales come to your home


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3. Heterogeneity - services are not alwaysdelivered the same way

It is very difficult to standardize services

eg. A machine can make ice cream cones a

standard size 100% of the time

A person filling an ice cream cone with a

scoop cannot do it the same amount each

time, unless you use a machine to dispense

the ice cream



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3. Heterogeneity - services are not alwaysdelivered the same way

It is very difficult to standardize services

eg. A Taxi driver cannot drive you to the office

in exactly the same time each day because

the traffic patterns change

eg. A travel agent can sell you a vacation

package - but cannot guarantee you will like

the trip exactly the same way another tourist

did.



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4. Perishability - cannot be put ininventory or stored for later use

ie. You cannot go to the doctor once for all

your life

Demand fluctuates and changes, sometimes

depending on the season, or weather

eg. Taxi in the rain, vacation in summer



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Service Providers

service providers have product lines andproduct mixes as well

examples

Mastercard

insurance

telephone services

cable services

ISPs - internet service providers

airlines, first class, economy class

banks


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=- Kinds of

Service RetailingRented goods services

Owned goods services


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Four Characteristics of

Services RetailingIntangibility

Inseparability

Perishability

Variability


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Figure 2.8a: Characteristics of

Service RetailingIntangibility

No patent protection possible

Difficult to display/communicate service benefits

Service prices difficult to set

Quality judgment is subjective

Some services involve performances/experiences


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Figure 2.8b: Characteristics of

Service RetailingInseparability

Consumer may be involved in service production

Centralized mass production difficult

Consumer loyalty may rest with employees


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Figure 2.8c: Characteristics of

Service RetailingPerishability

Services cannot be inventoried

Effects of seasonality can be severe

Planning employee schedules can be complex


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Figure 2.8d: Characteristics of

Service RetailingVariability

Standardization and quality control hard to achieve

Services may be delivered in locations

beyond control of management

Customers may perceive variability

even when it does not actually occur


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Figure 2-9: Consumer Perceptions

of Service Retailing


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Figure 2-10: Innovative Marketing

at McDonalds


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Figure A2-1: Lessons in

Service Retailing


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Retail Bank Components

Liabilities

WealthManagement Assets

Fee Based

Personal LoanCredit Cards

MortgageAuto

Checking Accounts

Savings AccountsTime Deposit


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Pillars of Retail

(New) ParadigmDistributionsRisks/Analytics

Operations/Collections

Customer Service

Product Offering

Banking


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Distribution Strategy

BuildingDistribution


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Logistics

Process of

managing the

flow of

merchandise

from vendor to

distribution

center to storeto customer


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Distribution Centers

Very sophisticated

Big

Few employees very automated

Ideally, not used to store goods; -- take off

delivery truck and load truck destined for aparticular store


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Who uses distribution centers

Retailers who have widely fluctuating demand for

specific items at the store level more accurate

sales forecast is demand is aggregated across

stores

Retailers who require frequent replenishment

Retailers who carry large # of items

Retailers with large number of outlets within 150200

miles


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What is logistics?

Procurement

Movement

Storage

Materials

Parts

Finished goods

Logistics is the total process of planning, implementing, and

coordinating the physical movement of merchandise from

manufacturer (wholesaler) to retailer to customer in the most

timely, effective, and cost-efficient manner possible


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Goals of Logistics

Economy in movement of goods (external

internal movement)

Accuracy in order management

Time management of shipments and deliveries

Shelf-life and replenishment of perishable goods

Coordination with suppliers and third-party

service providers

Backup plans and return shipments


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Logistics spans across thefunctions of

Supply Chain Management

Order Processing & Fulfillment

QR (Quick Response) ECR (Effecient Customer Response)

Transportation & Warehousing

Customer Transactions & Customer Satisfaction

Inventory Management Logistics


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Performance Goals

Relate costs incurred to specific logisticsactivities

Place and receive orders as easily, accurately,

and satisfactorily as possible Minimize the time between ordering and

receiving merchandise

Coordinate shipments from various suppliers

Have enough merchandise on hand to satisfycustomer demand, without having so muchinventory that heavy markdowns will benecessary


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Performance Goals_2

Place merchandise on the sales floorefficiently

Process customer orders efficiently and in amanner satisfactory to customers

Work collaboratively and communicateregularly with other supply chain members

Handle returns effectively and minimizedamaged products

Monitor logistics performance

Have backup plans in case of breakdowns inthe system


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The supply chain is the logistics aspect of

a value delivery chain

Parties involved

Manufacturers

Wholesalers

Third-party specialists

Retailer


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Facilitating system for movement of goods

or services from supplier to customer

Coordinates suppliers, intermediaries,

third-party service providers and

customers

CPFR


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CPFR(Collaborative Planning, Forecasting and

Replenishment)

Inventory replenishment

Information sharing

Satisfying customer demands Economy in inventory, logistics and

transportation expenditure


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3PL

Procurement (Sourcing)

Order Management

Production

Distribution

After Sales Service

Reverse Logistics

Warehousing Transport


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Order Processing &Fulfillment

Starts with product enquiry

Ends with delivery or return

T t ti &


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Transportation &Warehousing

No. of shipments

Minimum / Economic Order Quantity

Shipment Ownership Infrastructure quality

Non-store retailing


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Customer Transactions & CustomerService

Outbound logistics

Retail stores

Non-store retailers Webtailers

Direct Sellers

Customer Service vis--vis logistical

efficiency


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Warehousing

Centralized Warehousing

Direct Store Distribution


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Inventory Management

Cost effectiveness

Vendor managed inventory

Loss in inventory Employee theft

Customer shoplifting

Vendor fraud and errors

Electronic surveillance

Reverse Logistics


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Problems Balancing Inventory Levels

The retailer wants to be appealing and never

lose a sale by being out of stock; it does not

want to be stuck with excess merchandise

What fad merchandise and how much should becarried?

Customer demand is never completely

predictable

Shelf space allocation should be linked tocurrent revenues

Documents

services retailing AND LOGISTIICS.ppt