Part 5 Ch13 Delivering service through electronic channels and intermediaries

Question 1

Multi-channel Strategy

Answer 1

delivering a service through various channels, providing customers with multiple options for interaction
- Channels: Online, telephone, agent, branch, etc.
- Objective: Offer customers diverse ways to engage with the service.

Question 2

Omni-channel Strategy

Answer 2

Enables an organization to address customer needs seamlessly through a single interface, even if interactions occur across different channels.
- Single Interface: The organization uses one platform to interact with customers.
- Coordination: Interacts with other parties, ensuring a cohesive customer experience.

Question 3

Benefits of Electronic Service Distribution

Answer 3

1. Consistent Delivery for Standardized Services:
   Ensures uniform service quality for standardized offerings.
2. Low Cost:
   Facilitates cost-effectiveness in service delivery.
3. Customer Convenience:
   Enhances convenience for customers by providing multiple access points.
4. Wide Distribution:
   Enables broad availability of services across various locations.
5. Customer Choice and Ability to
   Customize:
   Offers customers the flexibility to choose and customize services according to their preferences.
6. Quick Customer Feedback:
   Allows for rapid feedback from customers, aiding in continuous improvement.

Question 4

Challenges in Electronic Service Distribution

Answer 4

1) Price Competition:
- Intensified competition based on pricing strategies.

2) Inability to Customize with Highly Standardized Services:
- Difficulty in providing customized options for highly standardized services.

3) Lack of Consistency due to Customer Involvement:
- Inconsistencies may arise when customers actively participate in the service.

4) Changes in Consumer Behavior:
- Adaptation challenges when consumer preferences and behaviors shift.

5) Security Concerns:
- Risks related to the security of distributed services and customer data.

6) Competition from Widening Geographies:
- Facing competition from service providers expanding into new geographical areas.

Question 5

Importance of Mobile Apps

Answer 5

Growth in Smartphones and Tablets:

• leverage the widespread adoption of smartphones and tablets.
• delivering a variety of services.

Question 6

Mobile Apps: Location-Based Services

Answer 6

• Smartphone’s GPS Technology:
  Utilizes GPS technology to provide location-based services.
• Enhanced Personalization:
  Enables service providers to tailor offerings based on the user’s location.

Question 7

Challenges of Mobile Service Delivery

Answer 7

• Consumer Mobility:
  Services can be challenging to deliver as consumers are often “on the move” for work or leisure.
• Regulatory Restrictions:
  Regulations and laws may impose restrictions on the provision of certain mobile-based services (e.g., banking services).

Question 8

SOME ISSUES IN DELIVERING
SERVICES THROUGH “OTHERS”

Answer 8

1. Inseparability and Service Quality
2. Lack of Titles and Rights for Services
3. Intangibility and Perishability of Services

Question 9

Inseparability and Service Quality

Answer 9

Services are produced and consumed simultaneously, making it challenging when involving others.

Question:
Would service quality be the same as if delivered by the “original” service provider?

Question 10

Lack of Titles and Rights for Services

Answer 10

Services cannot be owned, leading to difficulties in establishing titles or rights for most services.

Question 11

Intangibility and Perishability:

Answer 11

Services are intangible, and perishability means inventories cannot exist.

How to store a process, given that many channels used by goods producers are not feasible for service firms?

Question 12

Service principal (originator):

Answer 12

Creates the service concept.
(like a manufacturer

Question 13

Service deliverer (intermediary):

Answer 13

Entity that interacts with the customer in the execution of the service.
(like a distributor/wholesaler)

Question 14

FRANCHISING

Answer 14

Suitability for Franchising: Standardization and Duplication:
Franchising works well with services that can be standardized and duplicated

Service provider (franchisor) develops and optimizes a service format that is licensed for delivery by other parties (franchisees).

Question 15

Benefits for Franchisers

Answer 15

1) Leveraged Business Format:
- Enables leveraged business format for greater expansion and increased revenues.

2) Consistency in Outlets:
- Ensures consistency in service delivery across different franchise outlets.

3) Knowledge of Local Markets:
- Leverages the local knowledge of franchisees for effective market penetration.

4) Shared Financial Risk and More Working Capital:
- Involves shared financial risk with franchisees, providing more working capital for the franchiser.

Question 16

Challenges for Franchisers

Answer 16

1) Difficulty in Maintaining and Motivating Franchisees:
- Challenges in maintaining and motivating franchisees to adhere to standards and guidelines.

2) Highly Publicized Disputes and Conflict:
- Potential for highly publicized disputes and conflicts with franchisees.

3) Inconsistent Quality:
- Risk of inconsistent service quality across franchise outlets.

4) Control of Customer Relationship by Intermediary:
- Franchisers may face challenges in maintaining direct control over the customer relationship when intermediaries are involved.

Question 17

Agents in Service Intermediation

Answer 17

Agent:
An intermediary who acts on behalf of a service principal or a customer and is authorized to make agreements between the two.
Roles:

Selling agents work with the principal to sell offerings.
Purchasing agents help customers (e.g., buyers) make purchases.

Question 18

Brokers in Service Intermediation

Answer 18

An intermediary who brings buyers and sellers together while assisting in negotiations.

Characteristics:
- Paid by both parties.
- No long-term relationships.
- Rarely becomes involved in financing or risks.

Question 19

Benefits of Distributing Services through Agents and Brokers

Answer 19

1) Reduced Selling and Distribution Costs

2) Intermediary’s Possession of Special Skills and Knowledge:
- Agents and brokers often possess specialized skills and knowledge related to the service, enhancing the distribution process.

3) Wide Representation:
- Allows for a wide and diverse representation of the service in different markets through multiple intermediaries.

4) Knowledge of Local Markets:
- Leverages the local market knowledge of agents and brokers for effective service distribution.

5) Customer Choice:
- Provides customers with a broader choice of services through the diverse offerings represented by agents and brokers.

Question 20

Challenges of Distributing Services through Agents and Brokers

Answer 20

1) Loss of Control Over Pricing:
- Franchisers may face challenges in maintaining direct control over the pricing of services when intermediaries are involved.

2) Representation of Multiple Service Principals and Offerings:
- Agents and brokers often represent multiple service principals and offerings, potentially leading to conflicts and challenges in maintaining a cohesive brand image.

Question 21

Common Issues Involving
Intermediaries

Answer 21

1. Conflict over Objectives:
   - Intermediaries may have different objectives and performance metrics, leading to conflicts with the service provider.
2. Difficulty in Controlling Quality and Consistency:
   - Difficulty in controlling the quality and consistency of service across various outlets or intermediaries.
3. Tension Between Empowerment and Control
   - Tension arises between empowering intermediaries and maintaining control over the service delivery process.
4. Channel Ambiguity
   - Uncertainty regarding who determines standards for service quality in the channel.

Question 22

Strategies for Effective Service
Delivery through Intermediaries

Answer 22

1) Control
2) Empowerment
3) Partnering

Question 23

Control Strategies

Answer 23

1. Measurement:
   Utilize metrics and key performance indicators (KPIs) to measure and monitor the performance of intermediaries.
2. Review:
   Regularly assess and review the activities and outcomes of intermediaries to ensure alignment with service standards.

Question 24

Partnering Strategies

Answer 24

1. Alignment of Goals:
   Ensure that the goals of the service provider and intermediaries are aligned to achieve mutual success.
2. Consultation and Cooperation:
   Foster a collaborative relationship through ongoing consultation and cooperation to enhance service delivery.

Question 25

Empowerment Strategies

Answer 25

1. Help the Intermediary Develop Customer-Oriented Service Processes:
   - Support intermediaries in developing processes that prioritize customer satisfaction and align with service objectives.
2. Provide Needed Support Systems:
   - Offer the necessary tools, resources, and support systems to empower intermediaries in delivering high-quality services.
3. Change to a Cooperative Management Structure:
   Implement a cooperative management structure that encourages active participation and engagement from both the service provider and intermediaries.