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
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