Chapter14-1

Delivering Service Through

Intermediaries & Electronic Channels 14

 Service Distribution
 Direct or Company-Owned Channels
 Franchising
 Agents and Brokers
 Electronic Channels
 Common Issues Involving Intermediaries
 Strategies for Effective Service Delivery
Through Intermediaries
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
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Objectives for Chapter 14:

Delivering Service Through Intermediaries
 Identify the primary channels through which
services are delivered to end customers.

 Provide examples of each of the key service

intermediaries.

 Discuss the benefits and challenges of each

method of service delivery.

 Outline the strategies that are used to manage

service delivery through intermediaries.
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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)
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Services Intermediaries
 Franchisees
 service outlets licensed by a principal to deliver a unique
service concept it has created
 e.g., Jiffy Lube, Blockbuster, McDonald’s

 Agents and Brokers

 representatives who distribute and sell the services of
one or more service suppliers
 e.g., travel agents, independent insurance agents

 Electronic Channels
 all forms of service provision through electronic means
 e.g., ATMs, university video courses, TaxCut software
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Benefits and Challenges for

Franchisers of Service
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Benefits and Challenges for

Franchisees of Service
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Benefits and Challenges in Distributing

Services through Agents and Brokers
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Benefits and Challenges in Electronic

Distribution of Services
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Common Issues Involving Intermediaries

 conflict over objectives and performance

 difficulty controlling quality and consistency

across outlets

 tension between empowerment and control

 channel ambiguity
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Strategies for Effective Service Delivery

Through Intermediaries
 Control Strategies:  Empowerment
 Measurement Strategies:
 Review  Help the intermediary
develop customer-
oriented service
processes
 Partnering Strategies:  Provide needed support
 Alignment of goals systems
 Consultation and  Develop intermediaries
cooperation to deliver service quality
 Change to a cooperative
management structure
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H&R Block: Providing Multiple Service

Channel Options