1. 1 Role of Intermediaries who should be involved - delivering benefit of service to customers? using intermediaries for some functions - co-producing the service - selling the service TOURIST RESORT TOUR OPERATOR TRAVEL AGENT CONSUMER SUNSET BEACH HOTEL, ALCUDIA SUNWORLD FAHY TRAVEL JOE BLOGGS

2. 2 Functions of intermediaries co-producing the service - make service available - time & place that suits e.g. national key cutting service available in local supermarket sales support - two way dialogue helps secure the sale offer wide choice of services - customer may prefer choice & mix of service products e.g. hotel booking, car rental etc. available from travel agent advice to customer e.g. choosing an insurance policy after sales service - e.g. making an insurance claim, local broker provides claim forms, helps with the paperwork etc.

3. 3 Types of Intermediaries Service Agents act on behalf of principal - authority to create a legal relationship between customer & service principal e.g. travel agent, insurance broker, ticket agent principals liable for actions of their agents agents usually paid by commission gain wide distribution, local market knowledge, special skills, offers customer choice etc. Franchised operator franchisee is licensed to deliver the service that the franchisor has developed franchisor monitors standards of delivery - provides know- how & training franchisee pays a royalty to the franchisor out of sales revenue many franchisees are self- employed individuals, some are large organisations used in car hire, fast food, hotels, retailing, film processing etc.

4. 4 Going Direct sometimes service companies prefer to sell/deal directly with customers e.g. recent trend towards on-line booking of hotels etc. referred to as ‘disintermediation’ - cutting out the middleman Internet & customer confusion - go back to reasons why intermediaries arose in 1st place rise of Internet intermediaries - ‘informediaries’ e.g. Expedia, Travelocity - same as traditional travel agents ‘reintermediation’ - channel design back as it was!