Objectives :
Identify the primary channels through which services are delivered to end customers Provide examples of each of the key service intermediaries View delivery of service from two perspectives-the service provider and the service deliverer Identify the benefits and challenges of each method of service delivery Outline the strategies that are used to manage service delivery through intermediaries
Services Intermediaries
franchisees e.g., Jiffy Lube, H&R Block, McDonalds
agents and brokers e.g., travel agents, independent insurance agents
SM
Franchisees
McGraw-Hill
SM
Electronic channels
McGraw-Hill
Challenges
Difficulty in maintaining and motivating franchisees Highly publicized disputes and conflict Possibility of inconsistent quality that can undermine the company name Control of customer relationship by intermediary
Challenges
Disappointing profits and revenues Encroachment and franchise saturation High failure rates and unfair terminations Lack of perceived control High fees and rigid contracts Unrealistic expectations
Summary of 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 and other aspects of marketing Representation of multiple service principals
Benefits
Challenges
Customers are active, not passive Lack of control of electronic environment Price competition Inability to customize with standardized services Lack of consistency with customer involvement Security concerns Competition from widening geographies
Empowerment Strategies
Help the intermediary develop customer-based service processes Provide needed support Develop the intermediary to deliver service quality Change to a cooperative management structure
Partnering Strategies
Alignment of goals Consultation and cooperation
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