Service distributions

Nature of intermediaries in
service distribution channel
• Mostly to collect payment and send it to
the co. (eg. Telecom and DTH)

• Sometimes give service also (eg.

McDonald)
 Methods of service delivery
Availability of service outlets
Nature of interaction
Single site availability Multiple site availability

Customer goes to Theatre, Beauty parlor Bus, fast food chain

organization

Service org. goes to House painting Courier, taxi

customers

Service org. and Education through Video TV Channel, mobile

customers transact at conferencing phone
arm’s length
Decisions about place and time
• Where to deliver the service
– Locational constraints
– Mini stores
– Locating in multipurpose facility
• When to deliver the service
– Type of service
• Service intermediaries
• Direct or co. owned channels
 Key intermediaries for service
delivery
• Franchising
• Agents and brokers
• Electronic channels
 Franchising
• Franchiser’s perspective
– Benefits
• Greater expansion
• Consistency
• Knowledge of local markets
• Shared risk and W. Cap
– Limitations
• Difficulty in maintaining
• Quality inconsistency
• CRM controlled by franchisee
 Franchisee’s perspective
• Advantages
– Established process
– Reduced risk due to established brand
– Promotional support
• Limitations
– Shared revenue
– No own brand
– Strict adherence
– Encroachment
 Agents and brokers
• Benefits
– Reduced selling and distribution costs
– Special skills
– Wide spread
– Knowledge of local markets
• Challenges
– Loss of control
– Multiple services
 Electronic channels
• Benefits
– Standardization
– Low costs
– Customer convenience
– Wide distribution
– Quick feedback
 Challenges
• Lack of control on electronic environment
• Price competition
• Inability to customize
• Requires changes in customer behavior
• Security concerns
• Competition from wide geographies
 Electronic channels in action
• Interactive TV
• ATMs
• Online banking
 Factors influencing channel
design
• Co. resources/ objectives
• Type of service
• Geographical spread
• Legal and political restrictions
• Level of technical expertise needed
• Customer preferences
 Common issues involving
intermediaries
• Channel conflict over objectives and
performance
• Channel conflict over costs and rewards
• 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
• Partnering strategies
• Control strategies
– Review
• Empowerment strategies
– Help intermediary develop customer oriented service
– Provide needed support
– Train/Develop intermediary to deliver service
• Partnering strategies
– Goal alignment
– Consultation and cooperation
Thank you.