1. Delivering Service Through Intermediaries and Electronic Channels
Chapter 13
Delivering Service Through Intermediaries and Electronic Channels

2. 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.

3. 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

4. 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)

5. Key Issues Involving Intermediaries
conflict over objectives and performance
conflict over costs and rewards
control of service quality
empowerment versus control
channel ambiguity

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. END