Delivering Service Through Intermediaries and Electronic Channels Chapter 13 Delivering Service Through Intermediaries and Electronic Channels
Objectives Identifying the primary channels through which services are delivered to end customers. Providing examples of each of the key service intermediaries. Viewing delivery of service from two perspectives--the service provider and the service deliverer. Identifying the benefits and challenges of each method of service delivery. Outlining the strategies that are used to manage service delivery through intermediaries.
Delivering Service Service Intermediaries Direct or Company-owned Channels Common Issues Involving Intermediaries Key Intermediaries for Service Delivery Strategies for Effective Service Delivery Through Intermediaries
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)
Key Issues Involving Intermediaries conflict over objectives and performance conflict over costs and rewards control of service quality empowerment versus control channel ambiguity
Services Intermediaries franchisees e.g., Jiffy Lube, H&R Block, McDonald’s agents and brokers e.g., travel agents, independent insurance agents electronic channels e.g., ATMs, university video courses, Tax Cut software
Benefits and Challenges for Franchisers of Service Leveraged business format for greater expansion and revenues Consistency in outlets Knowledge of local markets Shared financial risk and more working capital Difficulty in maintaining and motivating franchisees Highly publicized disputes and conflict Inconsistent quality Control of customer relationship by intermediary
Benefits and Challenges for Franchisees of Service (cont.) 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
Benefits and Challenges in Distributing Services through Agents and Brokers Reduced selling and distribution costs Intermediary’s possession of special skills and knowledge Wide representation Knowledge of local markets Customer choice Loss of control over pricing and other aspects of marketing Representation of multiple service principals
Benefits and Challenges in Electronic Distribution of Services Consistent delivery for standardized services Low cost Customer convenience Wide distribution Customer choice and ability to customize Quick customer feedback Customers are active, not passive Lack of control of electronic environment Price competition Inability to customize with highly standardized services Lack of consistency with customer involvement Requires changes in consumer behavior Security concerns Competition from widening geographies
Strategies for Effective Service Delivery through Intermediaries Control Strategies Empowerment Strategies Measurement Review Help the intermediary develop customer-oriented service processes Provide needed support systems Develop intermediaries to deliver service quality Change to a cooperative management structure Partnering Strategies Alignment of goals Consultation and cooperation
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