Service Delivery Process

Dr. Poonam Madan

Provider Gap 3
Key Factors Leading to Provider Gap 3
The Service Process: Meaning
Customers of service organization obtain benefits and
satisfactions from the services themselves and from how
those services are delivered. The way in which service
systems operate is crucial. Service systems which operate
efficiently and effectively can give marketing
management considerable marketing leverage and
promotional advantage. It is clear that a smooth running
service operation offers competitive advantages,
particularly where differentiation between service
products may be minimal.
Service delivery
The delivery of a service typically involves five
factors:
The service providers (e.g. the people)
 Equipment used to provide the service (e.g. vehicles,
cash registers)
 The physical facilities (e.g. buildings, parking, waiting
rooms)
 The client
 Other customers at the service delivery location
Delivering Service Through
Intermediaries & Electronic Channels
Service Distribution
Direct or Company-Owned Channels
Franchising
Agents and Brokers
Electronic Channels
Common Issues Involving Intermediaries
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)
Services Intermediaries
Franchisees
service outlets licensed by a principal to deliver a unique
service concept it has created
 e.g., Jiffy Lube, Blockbuster, Holiday Inns, 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, Tax Prep software
 Benefits and Challenges for Franchisors of
Service
Benefits Challenges
Leveraged business format Difficult to maintain &
for greater expansion & motivate franchisees
revenues Highly publicized disputes
Consistency in outlets & conflicts
Knowledge of local Intermediaries control
markets customer relationship
Shared financial risk &
more working capital
 Benefits and Challenges for
Franchisees of Service
Benefits
 An established business
format
 International, national, or
regional brand marketing
 Minimized risk of starting a
business
 Poorly capitalized or
managed franchisor
Challenges
 Encroachment of other outlets
into franchised territories
 Disappointing profits &
revenues
 Lack of perceived control
over operations
 High fees
 Benefits and Challenges in Distributing
Services through Agents and Brokers
Benefits Challenges
 Reduced selling & Loss of control over
distribution costs pricing
 Intermediary’s possession of Representation of multiple
skills & knowledge service principals
 Wide representation
 Knowledge of local markets
 Customer choice
 Benefits and Challenges in Electronic
Distribution of Services
Benefits
 Consistent delivery of
standardized services
 Customer convenience
 Wide distribution
 Customer choice & ability to
customize
 Quick customer feedback
Challenges
 Price competition
 Inability to customize
 Lack of consistence due to
customer involvement
 Changes in customer
behavior
 Security concerns
 Competition from widening
geographics
Common Issues Involving Intermediaries
conflict over objectives and performance
difficulty controlling quality and consistency across
outlets
tension between empowerment and control
channel ambiguity
Strategies for Effective Service Delivery Through
Intermediaries
Control Strategies: Empowerment Strategies:
Measurement Help the intermediary
Review develop customer-oriented
service processes
Provide needed support
Partnering Strategies: systems
Alignment of goals Develop intermediaries to
Consultation and deliver service quality
Change to a cooperative
cooperation
management structure