Indirect Distribution | Roles of service intermediaries

Delivery of services through intermediaries

Nowadays, many services are delivered by intermediaries. Two service marketers are involved in indirect distribution; the service principal and the service deliverer. The service principal is the originator and the service deliverer is the intermediary. The service principal is the entity which creates the service concept. The service deliverer is the entity which deals with the customers during the execution of the service. Thus, in the indirect channel, both the service supplier and the intermediaries play an important role.

Role of service intermediaries in Indirect distribution

Service intermediaries discharge many important functions for the service principal.

1. Service intermediaries co-produce the service and make the service available to customers at a place and time of their choice, thus fulfilling the promises made by the service firms to customers.

2. The Franchisee uses the process developed by the service principal and renders satisfying service to customers.

3. Service intermediaries also make service locally available.

4. Intermediaries act as multiple service principals. Intermediaries such as travel agents and insurance agents provide retailing function to customers.

5. In many financial or professional services, intermediaries build a relationship based on trust which is essential in a complex service offering.

6. Services are intangibles and perishables and inventories do not exist. Therefore, service distribution focuses on identifying ways to bring the customer and principal together. Service intermediaries such as franchisees agents, brokers, etc., act as a connecting link between the service firm and customers.

7. Service intermediaries deliver services according to the specifications of the principals.

8. Service intermediaries are in direct contact with the customers. So, they are in a position to determine the way customers perceive the quality of the service.

9. Service intermediaries advise the customers on the choice of the service which satisfies their needs.

10. Intermediaries provide after sales support to the customers. For example, an insurance agent guides the policy holder in making a claim and goes through the procedural formalities in connection with that claim.

11. An intermediary, as a co-producer of a service shares the risks of providing services by contributing their own capital to acquire the equipment needed for the delivery of service.

12. A service provider sells only his own services. But consumers prefer to buy service from an intermediary who offers a wide variety of services including these offered by competing service principals. The advantage of intermediaries is that they offer different services at one location.

13. Intermediaries relieve the service principal from the botheration of making huge investment on his own. As intermediaries operate at different places, a service principal can invest his funds in core services.

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