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Unit 12: Distribution of Services
12.1.2 Role of Intermediaries Notes
Intermediaries play the following roles:
Information Flow: The intermediaries like retailers, wholesalers, dealers, stockists, agents,
buyers, etc., are important sources of information for the marketer. They are in touch with
their respective customers, other traders and competitors and this information flows to
the service marketer with careful management. The intermediaries are also one of the
early warning systems for any of the following changes:
Customer demographics and psychographics: A retailer will come to know the
changes in the customer profile in his catchments area, their spending capability,
addresses, average family size, occupation, their lifestyles and attitudes etc. So will
an agent for a life insurance company or an agent in the real estate business.
Wholesalers are a source of information about the strengths and weaknesses of the
retailers.
Media habits: The retailers, news agents and cable operators have their fingers on
the pulse of the media habits of the public, and the service firm should be astute
enough to tap this source. They are much updated on which TV channels are watched
by which segment of viewers.
Entry of a new competitor, brand or the practice of a new marketing method or
promotion: The retailers, wholesalers and agents are also the most important sources
for any changes or entry in the composition of competitors. If a new brand or service
product enters the market, the service firm could be alerted by its distribution
chains. Similarly, if a competitor tries out a new promotion scheme and if it happens
to be effective (or ineffective, as the case may be) the service firm would be better off
being warned than taken by surprise. For example, in the fast growing cellular
phone services, the effectiveness of one competitors promotion scheme is tracked
by others.
Example: Wal-Mart was in possession of a large cache of information about customers
through scanning of bar codes of goods purchased through its retail stores. This was eagerly
sought to be accessed by large FMCG companies like Unilever and Procter and Gamble.
The service marketer avoids the use of middlemen like dealers, stockists, warehouses and
wholesalers, etc., because of the intangibility factor. Service retailing would entail servicing the
consumer with information or the service itself. Thus, the authorized sales outlets of a mobile
phone service provider would keep not only the SIM cards but also handsets, while handling
bill payments, enquiries, etc.
Promotion Flow: While the service firm does external marketing to its customers using
the mass media or through direct marketing, the channel or the intermediaries are an
essential route for promotional information to travel from the former to the latter. The
service firm uses the channel to implement its push and pull promotion strategy meant
for the intermediaries and the external customers respectively. The channel is also the
source of information on the effectiveness of the promotions.
Pre-Sales Service: It is thanks to the channel members that the manufacturers or the service
firms have been able to reduce the number of contacts with the customers and concentrate
on their core offers. The channel members and other facilitators take part in other marketing
activities preceding sales like pricing, packaging, marking and assembling goods to suit
the final consumer.
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