14-1

Delivering Service Through Intermediaries

and electronic channels

Benefits & Challenges in Distribution of services

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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 retailer)

Service can be provided directly by company or through

intermediaries
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Services Intermediaries
 Franchisees
 service outlets licensed by a principal to deliver a unique
service concept it has created
 e.g. McDonald’s, Dominos

 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
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Benefits and Challenges for

Franchisers of Service
 14-5

Benefits and Challenges for

Franchisees of Service
 14-6

Benefits and Challenges in Distributing

Services through Agents and Brokers
 14-7

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
 1) Control Strategies:  2) Empowerment
 Measurement Strategies:
 Review  Help the intermediary
develop customer-
oriented service
processes
 3) Partnering  Provide needed support
Strategies: systems
 Develop intermediaries to
 Alignment of goals
deliver service quality
 Consultation and
 Change to a cooperative
cooperation
management structure