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MKT 723 (71)
Chapter 14

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MKT 723
Armand Gervais

Chapter 14 – Delivering Service Through Intermediaries and Electronic Channels Two distinct services are involved in delivering service through intermediaries:  Service principal – Originator  Service deliverer - Intermediary Service Distribution Direct Delivery of Service Services are intangible and experiential in nature. Thus, service distribution doesn’t involve moving items through a chain of firms, from manufacturer to consumer, as in goods distribution. In contrast to channels for goods, service channels are often direct. Delivery of Service Through Intermediaries Although the functions provided by intermediaries for goods manufacturers are irrelevant for service firms, intermediaries often deliver services and perform very important functions for service principals. They may coproduce services, fulfilling promises to customers. Services such as haircutting are provided by the intermediary, using a process developed by the Service principal. Intermediaries also make services locally available, providing convenience for the customer. Primary types of intermediaries include:  Franchisees – Service outlets licensed by a principal to deliver unique service concept it has created or popularized. (Fast food, hotels, etc)  Agents & brokers – Representatives who distribute and sell the services of one or more service suppliers. (Insurance, Financial, Travel, etc)  Electronic channels – All forms of service provision through television, telephone, interactive media, and computers. (Banking, bill paying, education) Goods retailers are also service organizations. They are an intermediary for good and possibly services. Manufacturing companies need retailers to provide presale services (Represent, explain, promote, and ensure products) and post-sale services (return, exchange, support and service). These roles become increasingly critical as products become more complex. Direct or Company-Owned Chan
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