ROLE OF INTERMEDIARIES IN SERVICE DELIVERY

By Namitha Kaushik Sahana

SERVICE DISTRIBUTION
• service distribution can be direct or through intermediaries


• Two distinct services marketers are involved in delivering service through intermediaries: -The service principal is the entity that creates the service concept.  -The service deliverer - is the entity that interacts with the customer in the actual execution of the service

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TYPES OF INTERMEDIARIES  • Franchising • • Agents and Brokers  • Electronic channels 3 .

DIRECT OR COMPANY OWNED CHANNELS Benefits: • Complete control over outlets • Allows the company to expand or contract sites without being bound by contractual agreements • Company owns the customer relationship   Disadvantages: • Financial risk • Not aware of all the markets  4 .

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FRANCHISING For Franchisers Benefits: • Leveraged business format for greater expansion and revenues • Consistency in outlets • Knowledge of local markets • Shared financial risk and more working capital   Challenges: • Difficulty in maintaining and motivating franchisees • Highly publicized disputes and conflict • Inconsistent quality • Control of customer relationship by intermediary   6 .

] For Franchisees Benefits: • An established business format • National or regional brand marketing • Minimized risk of starting a business   Challenges: • Encroachment • Disappointing profits and revenues • Lack of perceived control over operations • High fees   7 .FRANCHISING [contd..

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AGENTS AND BROKERS Benefits: • Reduced selling and distribution costs • Intermediary's possession of special skills and knowledge • Wide representation • Knowledge of local markets • Customer choice   Challenges: • Loss of control over pricing • Representation of multiple service principals   9 .

ELECTRONIC CHANNELS 10 .

ELECTRONIC CHANNELS Benefits: • Consistent delivery for standardized services • Low cost • Customer convenience • Wide distribution • Customer choice and ability to customize • Quick customer feedback   11 .

.ELECTRONIC CHANNELS [contd.] Challenges: Price competition Inability to customize with highly standardized services Lack of consistency due to customer involvement Changes in consumer behavior Security concerns Completion from widening geographies 12 .

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COMMON ISSUES INVOLVING INTERMEDIARIES • Channel conflict over objectives & performance • • Difficulty controlling quality & consistency across outlets • • Tension between empowerment & control • • Channel ambiguity 15 .

STRATEGIES FOR EFFECTIVE SERVICE DELIVERY THROUGH INTERMEDIARIES • • • Control strategies • • Empowerment strategies • • Partnering strategies 16 .

–  Measurement  Review 17 . measures results & compensates or rewards on the basis of performance level. the service principal believes that intermediaries will perform best when it creates standards both for revenues & service performance.CONTROL STRATEGIES • In control strategies category.

  Help the intermediary develop customer-oriented service processes  Provided needed support systems  Develop intermediaries to deliver service quality  Change to a co-operative management structure • 18 .EMPOWERMENT STRATEGIES • In which the service principle allows greater flexibility to intermediaries based on the belief that their talents are best revealed in participation rather than acquiescence.

set specifications. –  Alignment of goals  Consultation & co-operation 19 . improve delivery & communicate honestly.PARTNERING STRATEGIES • The group of strategies with the highest potential for effectiveness involves partnering with intermediaries to learn together about end customers.

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