Delivering Service through Intermediaries. Service Provider Participants Service principal...
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- Slide 1
- Delivering Service through Intermediaries
- Slide 2
- 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)
- Slide 3
- Services Intermediaries Franchisees service outlets licensed by
a principal to deliver a unique service concept it has created
e.g., KFC Agents and Brokers representatives who distribute and
sell the services of one or more service suppliers e.g., insurance
agents Electronic Channels all forms of service provision through
electronic means e.g., distance learning
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- Franchising Most common type of distribution of services Works
well with services that can be standardized and duplicated through
the delivery process, service policies, warranties, guarantees,
promotion and branding It is a relationship or partnership in which
the service provider develops and optimizes a service format that
it licenses for delivery by other parties the franchisees
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- Benefits and Challenges for Franchisers of Service 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
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- Benefits and Challenges for Franchisees of Service 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
- Slide 10
- Agents and Brokers An agent w acts on behalf of a service
principal or a customer and is authorized to make agreements
between the principal and the customer A broker is an intermediary
who brings buyers and sellers together while assisting in
negotiation Agents and brokers have legal authority to market
services as well as to perform other marketing functions on behalf
of producers
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- Benefits and Challenges in Distributing Services through Agents
and Brokers Benefits: Reduced selling and distribution costs
Intermediarys 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
- Slide 12
- Electronic Channels These channels do not require human
interaction Various services are made possible through such
vehicles which include movies on demand, remote health services
etc. Use of electronic channels helps in overcoming some of the
problems associated with service inseparability
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- Benefits and Challenges in Electronic Distribution of Services
Benefits: Consistent delivery for standardized services Low cost
Customer convenience Wide distribution Customer choice and ability
to customize Quick customer feedback Challenges: Price competition
Inability to customize with highly standardized services Lack of
consistency due to customer involvement Changes in consumer
behavior Security concerns Competition from widening
geographies
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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
- Slide 15
- Strategies for Effective Service Delivery Through
Intermediaries Control Strategies: Measurement Review Partnering
Strategies: Alignment of goals Consultation and cooperation
Empowerment Strategies: Help the intermediary develop
customer-oriented service processes Provide needed support systems
Develop intermediaries to deliver service quality Change to a
cooperative management structure