Exam 13: Marketing Channels

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MINIMIZING WAIT TIMES.Minimizing the amount of time a customer waits for service is a key factor in maintaining the quality of service.People tend to overestimate the amount of time they spend waiting in line,and unexplained waiting seems longer than explained waiting.
MANAGING SERVICE CAPACITY.If service firms don't have the capacity to meet demand,they must either turn down dome prospective customers,let service slip,or expand capacity.For instance,at tax time,a tax preparation firm may have so many customers desiring its services that it has to either turn business away or add temporary offices or prepares.
IMPROVING SERVICE DELIVERY.Like manufacturers,service providers are now experimenting with different distribution channels.These new channels can increase the time that service is available (such as the Internet)or add to consumer convenience (plan a vacation cruise).
ESTABLISHING CHANNEL-WIDE NETWORK COHERENCE.Because services are to some degree intangible,service firms also find it necessary to standardize their service offering quality across different geographic regions in order to maintain brand image.Network coherence means that suppliers,service processes and customer service have quality standards that are maintained regardless of where the service is purchased or consumed.

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ARM'S-LENGTH RELATIONSHIPS.In these relationships,both parties retain their independence and pursue only their own interests while attempting to benefit from the goods and services provided by the other.
INTEGRATED RELATIONSHIPS.These relationships are at the opposite end of the relationship continuum from arm's-length relationships.In this situation,one company,or several companies acting as one,performs all channel functions.
COOPERATIVE RELATIONSHIPS.These relationships exist between arm's-length and integrated relationships.In general,cooperative relationships are administered using some sort of formal contract.They tend to be more flexible than integrated relationships.Also,they tend to be used when a company wants less ambiguity in the channel relationship than the arm's-length relationship can provide but without the long-term and/or capital investment required to achieve full integration.
The three basic types of channel relationships are organized by how close the buyer and the supplier interact with each other.Students need to understand that certain channel relationships can fall between Arm's-length and cooperative,or that a relationship can be integrated at some point and then cooperative at others.All of the factors that affect choice of channel type also can influence the relationship.A combination of relationships can exist--one that is kind of cooperative and still has a degree of Arm's-length can exist.A continuum indicates that relationships can and do fall at many points within the graphic representation.