Page 235 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes The intermediaries might require systems support to enable them to deliver their service
properly. The service principal then shares systems with the intermediaries. Airlines and also
many hotels give support to travel agencies for ticketing through Computerized Reservation
Systems (CRS).
Partnering Strategies: This approach is used when the service principal and the intermediary
both are on an equal footing in the power equation. It seeks to synergize their skills and
strengths, stressing the importance of trust and relationships. This strategy has the highest
potential for being effective, and the stress is to learn as much as possible about the customers,
improve service delivery, communicate effectively and build standards of excellence.
Partnering becomes most effective when there is successful goal alignment between the service
principal and the intermediary. The service principal should take a proactive role in co-opting
the intermediaries in a goal-stressing exercise and aligning them to one common goal. Partnering
strategy also includes involving the intermediaries in the decision-making processes — ranging
from compensation, service quality and service environment to service delivery.
Apart from directly entry, the service firm can expand its distribution network in both, domestic
and the international market by:
Mergers and Acquisitions: it refers to the aspect of corporate strategy, corporate finance

and management dealing with the buying, selling and combining of different companies
that can aid, finance, or help a growing company in a given industry grow rapidly without
having to create another business entity.

Example: Kingfisher Airlines and Air Deccan merged to expand their distribution
network. Kingfisher caters to the classes and Air Deccan to the masses, so the alliance with get
the customers from both the sections.

Joint Venture: They are entities formed by two or more individual entities for growth of

global market share.

Example: Wal-Mart has teamed up with Bharti to start up its operations in India.
Strategic Alliances: is a formal relationship between two or more parties to pursue a set of

agreed upon goals or to meet a critical business need while remaining independent
organisations.

Example: Alliance between One World and Star is only a strategic Alliance

Task Name some service firms that have entered the Indian market taking the JV or
strategic alliance route.

Self Assessment

Fill in the blanks:

11. The Future Generali insurance group is a of Future Group and Generali of
Italy.
12. intermediary management strategy is mostly used when the service
principal is new, and the intermediary is a known player.

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