Delivering service through intermediaries and electronic channels

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Delivering service through intermediaries and electronic channels

  1. 1. Chapter 13 Delivering Service Through Intermediaries and Electronic Channels <ul><li>Service Intermediaries </li></ul><ul><li>Direct or Company-owned Channels </li></ul><ul><li>Common Issues Involving Intermediaries </li></ul><ul><li>Key Intermediaries for Service Delivery </li></ul><ul><li>Strategies for Effective Service Delivery Through Intermediaries </li></ul>
  2. 2. Objectives for Chapter 13: Delivering Service through Intermediaries and Electronic Channels <ul><li>Identify the primary channels through which services are delivered to end customers. </li></ul><ul><li>Provide examples of each of the key service intermediaries. </li></ul><ul><li>View delivery of service from two perspectives--the service provider and the service deliverer. </li></ul><ul><li>Identify the benefits and challenges of each method of service delivery. </li></ul><ul><li>Outline the strategies that are used to manage service delivery through intermediaries. </li></ul>
  3. 3. Service Provider Participants <ul><li>service principal (originator) </li></ul><ul><ul><li>creates the service concept </li></ul></ul><ul><ul><ul><li>(like a manufacturer) </li></ul></ul></ul><ul><li>service deliverer (intermediary) </li></ul><ul><ul><li>entity that interacts with the customer in the execution of the service </li></ul></ul><ul><ul><ul><li>(like a distributor/wholesaler) </li></ul></ul></ul>
  4. 4. Key Issues Involving Intermediaries <ul><li>conflict over objectives and performance </li></ul><ul><li>conflict over costs and rewards </li></ul><ul><li>control of service quality </li></ul><ul><li>empowerment versus control </li></ul><ul><li>channel ambiguity </li></ul>
  5. 5. Services Intermediaries <ul><li>franchisees </li></ul><ul><ul><li>e.g., Jiffy Lube, H&R Block, McDonald’s </li></ul></ul><ul><li>agents and brokers </li></ul><ul><ul><li>e.g., travel agents, independent insurance agents </li></ul></ul><ul><li>electronic channels </li></ul><ul><ul><li>e.g., ATMs, university video courses, TaxCut software </li></ul></ul>
  6. 6. Table 13.1 Benefits and Challenges for Franchisers of Service <ul><li>Leveraged business format for greater expansion and revenues </li></ul><ul><li>Consistency in outlets </li></ul><ul><li>Knowledge of local markets </li></ul><ul><li>Shared financial risk and more working capital </li></ul><ul><li>Difficulty in maintaining and motivating franchisees </li></ul><ul><li>Highly publicized disputes and conflict </li></ul><ul><li>Inconsistent quality </li></ul><ul><li>Control of customer relationship by intermediary </li></ul>Benefits Challenges
  7. 7. Table 13.1 ( Continued ) Benefits and Challenges for Franchisees of Service <ul><li>An established business format </li></ul><ul><li>National or regional brand marketing </li></ul><ul><li>Minimized risk of starting a business </li></ul><ul><li>Encroachment </li></ul><ul><li>Disappointing profits and revenues </li></ul><ul><li>Lack of perceived control over operations </li></ul><ul><li>High fees </li></ul>Benefits Challenges
  8. 8. Table 13.2 Benefits and Challenges in Distributing Services through Agents and Brokers <ul><li>Reduced selling and distribution costs </li></ul><ul><li>Intermediary’s possession of special skills and knowledge </li></ul><ul><li>Wide representation </li></ul><ul><li>Knowledge of local markets </li></ul><ul><li>Customer choice </li></ul><ul><li>Loss of control over pricing and other aspects of marketing </li></ul><ul><li>Representation of multiple service principals </li></ul>Benefits Challenges
  9. 9. Table 13.3 Benefits and Challenges in Electronic Distribution of Services <ul><li>Consistent delivery for standardized services </li></ul><ul><li>Low cost </li></ul><ul><li>Customer convenience </li></ul><ul><li>Wide distribution </li></ul><ul><li>Customer choice and ability to customize </li></ul><ul><li>Quick customer feedback </li></ul><ul><li>Customers are active, not passive </li></ul><ul><li>Lack of control of electronic environment </li></ul><ul><li>Price competition </li></ul><ul><li>Inability to customize with highly standardized services </li></ul><ul><li>Lack of consistency with customer involvement </li></ul><ul><li>Requires changes in consumer behavior </li></ul><ul><li>Security concerns </li></ul><ul><li>Competition from widening geographies </li></ul>Benefits Challenges
  10. 10. Strategies for Effective Service Delivery through Intermediaries <ul><li>Measurement </li></ul><ul><li>Review </li></ul>Control Strategies <ul><li>Alignment of goals </li></ul><ul><li>Consultation and cooperation </li></ul><ul><li>Help the intermediary develop customer-oriented service processes </li></ul><ul><li>Provide needed support systems </li></ul><ul><li>Develop intermediaries to deliver service quality </li></ul><ul><li>Change to a cooperative management structure </li></ul>Empowerment Strategies Partnering Strategies

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