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 2
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
5
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
FRANCHISING
[contd..]

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

8
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
14
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
CONTROL
STRATEGIES

• In control strategies category, the service

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

• The group of strategies with the highest

potential for effectiveness involves
partnering with intermediaries to learn
together about end customers, set
specifications, improve delivery &
communicate honestly.
–
 Alignment of goals
 Consultation & co-operation
19