Role of Supplementary Services and Challenges of Using Intermediaries in Service Setting

This article discusses the role of supplementary services in differentiating core services and the challenges of using intermediaries in service setting. It also provides insights into the management and marketing challenges faced by service organizations while using intermediaries.

Running Head: SERVICE MARKETING 1
Service Management

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Answer 1: Role of Supplementary Services to differentiate service:
There are two types of services which are offered by a service organization i.e. core services and
supplementary services. Core service provides the outcomes which are expected by the
customers justifying the related nominal charges. Apart from this, supplementary services are the
additional services which facilitate the use of organization’s core service. Supplementary
services play an important role in the organization to differentiate its core services from its
competitors in the service industry. For this discussion, Ramada Resort, Accra is taken into
consideration. Ramada Resort Accra is a beachside resort that is situated at Teshie-Nungua in a
major city of Ghana-Accra. It is the perfect location that offers different types of hospitality
services like holding meetings and conferences, social and business functions (Ramada Resort,
Accra, 2018). After its establishment in the year 1999, the service organization has expanded its
services and infrastructure to have 180 rooms and chalets, two restaurants, three conference
rooms, a bar, a spa, a gym, swimming pool and salon. It has employed 91 employees who
contribute to the peaceful aura of relaxation for its guests and visitors.
Currently, Ramada Resort, Accra is operating its business as a 3-star hotel and offering both core
and supplementary services to its guests and clients. It is promoting its services by using a slogan
“stay close to nature” that indicates its mission to provides the guests with a peaceful
environment for relaxation and offer western services with the best of Ghanaian hospitality.
Primarily, this service company seeks for attracting the incentives, meetings, events, conferences
and targets the business travellers to stay at their rooms (Etzel, 2015). The core service at
Ramada Resort is accommodation or stay in hotel rooms and space for business meetings and
conferences. Under its core service, it offers different categories of rooms like single chalet,
double chalet, executive chalet, single standard room, double standard room, twin room and
family villas.
Apart from this, supplementary services of the resort include the below-given services:
 Bar and restaurants
 Salon, gym and spa
 Laundry services
 Free breakfast
 Free Parking
 Outdoor swimming pool
 Airport shuttle
 Children’s playground
 Fitness centre
 Business centre

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 Hot Tub
 In-room services like satellite
television, Air-conditioning,
International Direct Dialling
telephones
 Working area in room
 Private balcony
 Travel Guide
 Pick-up and Drop-in facilities
At Ramada Hotel, supplementary services play an important role in differentiating the core
services from its competitors. Inclusion of supplementary services facilitates and enhances the
core services of this hotel. Thus, the service company has two types of supplementary services
i.e. facilitating supplementary services and enhancing supplementary services (Ladhari and
Michaud, 2015). Facilitating supplementary services are the services which are required for
delivering the service to guests and they assist in using the core service. Enhancing
supplementary services add additional value to the customers. At Ramada Resort, facilitating
services are information, payment, billing and order taking whereas enhancing services include
hospitality, consultation and safekeeping. By offering supplementary services, Ramada Resort is
able to add more value to its core accommodation services (Xu, and Gursoy, 205).
Being a part of full service at Ramada, supplementary services play a beneficial role in
developing interest and awareness among guests about its hospitality services. Through these
services, the resort is able to attract more guests by offering different benefits and comforts. For
instance, under information service people can get the service details, room category and prices
of rooms, location and packages from its website http://www.ramadaresortaccra.com/rooms. The
payment facilities are very easy and convenient at this resort as they offer various options to
facilitate the customer bill payment like credit card, debit card, net banking and on-the counter
(Cvelbar, Grün and Dolnicar, 2017). It attracts the customers towards its services as they feel
very convenient and comfortable.
In addition to this, one of the primary supplementary services at Ramada is quality of its
hospitality services that can enhance or decrease the guest satisfaction. The resort ensures that
effective training is provided to its employees so that they can treat with their guests nicely. It
provides quality food and room services to each and every guest. It assists the organization in
affecting the guest perception positively and increasing their repeat intention to visit Ramada

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Hotels. These services enable the visitors and guests to use the core services more effectively. If
there will be any deficiency in supplementary services then it may negatively affect the
perception of guests towards service quality of Ramada Resorts. It enhances the accommodation
services of Ramada Hotel. As mentioned above, this resort offers various additional amenities to
its guests like TV, Wi-Fi, private balcony, working area. It enhances the guest experience during
their stay at Ramada (Jang, et al, 2018). Guest satisfaction is one of the major objectives for any
hotel. Supplementary services add more value to the core services at hotel and provide increased
guest satisfaction. Eventually, it increases the guest base of the hotels. Through this, it is able to
generate more revenues and profits in Ghana hospitality industry. To implement supplementary
services, the managers at hotel need to make some difficult decisions as these additional services
are offered to guests free of cost. It may increase the cost of services for organization but in turn
it increases their profits. By differentiating its services, the service company is able to gain more
competitive advantage over its competitors such as Next Door Beach Resort, Diplomat Beach
Resort, African Royal Beach Hotel and Savannah Beach Guesthouse (Byrd et al, 2016).
Thus, it can be stated that supplementary services play an important role in the service delivery
process at a hospitality organization. By developing its core and supplementary services, Ramada
Hotel is able to enhance its brand image in African hospitality industry. Supplementary services
at organizations assist in enhancing and facilitating its core services so that it can retain its
existing guests and create new customers (Sichtmann, and Wilken, 2015). It can be noted that
services organizations develop the necessary expertise in their services so that they can execute it
to be the core and primary service. They can increase their profits and revenues by rendering
their services to their targeted audiences. In this way, supplementary services add value to core
services and provide differentiation and competitive edge to the chosen hotel.
Answer 2: Challenging of Using Intermediaries in service setting:
Intermediaries are the people who place the buyers and sellers together without taking ownership
of any product or service. They are the most important part of distribution channel of an
organization. Company pays them a specific percentage of total transaction amounts. Unless the
customers are purchasing the products and services directly from the organization that offers it,
sales are facilitated by using one or more marketing intermediaries. These intermediaries are
known as middlemen for that particular product or service. These intermediaries do many things

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than simply take an amount with each transaction. For different organizations, there may be
different types of intermediaries but there are four traditional intermediaries that include
wholesalers, agents, retailers, distributors and brokers. Nowadays, service sector organizations
are also using intermediaries in order to provide its services to final customers. In today’s
competitive business environment, there are various service sector organizations which are using
intermediaries so that it can approach a large group of customers. They can assist the
organization in delivering services effectively and increase their customer base. In this process,
the customers do not need to contact the service organization directly. They can avail the
services through these intermediaries (Nolden, Sorrell and Polzin, 2016). The example of a
hospitality organization can be taken into consideration to understand the marketing and
management challenges of using intermediaries. In its service setting, the hospitality
organizations can use different intermediaries like tour operators, travel agencies, business and
corporate travel agents, meeting planner, internet sources, search engines and tourist boards.
Travel agents and meeting planners can become more important distribution channel and
intermediary for the hotels. It offers various benefits to the organizations. They not only give the
customers easy access to the services but also streamline the service delivery process of a hotel.
Apart from these benefits, the service setting may face various management and marketing
challenges by using the intermediaries (Young, 2015). It can have an adverse impact on the
marketing and management of an organization. Each and every organization needs to consider
and focus on these challenges. These challenges of intermediaries to service setting are stated
below:
 Inconsistent pricing: It is one of the major challenges that are posed by the use of
intermediaries in service setting. On the website of intermediaries, customers can
compare the prices of services with the competitor’s service prices. Sometimes, the prices
of intermediaries can be lower than those given on company’s website (Schramm-Klein,
Morschett and Swoboda, 2015). It creates confusion in the mind of customers and
company may bear the loss of revenues because most of the customers will select to avail
the services at lower and commissioned prices through intermediary.
 Lack of trust between managers and distributors: There may be lack of trust between
managers and distributors due to differences in the culture (Rust and Huang, 2014). It can

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lead to the non-disclosure stock information and inappropriate service offering practices.
 Loss of revenues: The service organization like Ramada Resorts offers its services to the
final customers through different intermediaries like tour operators, travel agencies. So,
organization has to pay a significant commission to them. This commission is paid
according to the hospitality services and guest stay at hotel. It can affect and decrease the
revenues of hotel (Schramm-Klein, Morschett and Swoboda, 2015).
 Loss of margin: Due to use of intermediaries, the distribution can be the most expensive
component for the service organization under its marketing mix. The companies need to
pay an amount to the intermediaries in the form of commission. For example, there are
various smaller and independent organizations which pay higher commission and credit
card charges to intermediaries (Mishra, 2016). Larger companies can take better deals
from these intermediaries because of more booking transactions.
 Ownership of customers: This is also a significant challenge that is posed by
intermediaries on the service organization. They can take the ownership of customers as
they have access to all the information of customers.
 In a service setting, the management needs to develop different managerial skills and
abilities which are sufficient to manage and balance the intermediary.
 Marketing and promotion of competitors’ services: a service provider company
becomes helpless when its intermediaries avoid its services and promote the services of
competitors in order to earn better incentives and returns. Ineffective delivery of services
can have adverse impact on the service importance and it can decrease the sales figures of
organization (Dombrowski, et al, 2014).
 Loss of control: When a service company uses marketing intermediaries, it might be one
of the organizations which they work for. So, there may be chances that intermediaries do
not pay attention to communicate of one company’s message. In addition to this, some
dominating intermediaries can dictate the pricing decisions to their owned service
settings in some other destinations. It can affect the marketing and promotion process of
that service organization.
 Service Wholesalers: In the distribution process, service wholesalers purchase the rights
of a large volume of the service transactions (Pinto, Saur-Amaral and Brito, 2015). After
that it is divided into smaller parts that are handled by other intermediaries like retailers.

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For instance, travel agencies book a large block of hospitality organizations at lower
prices. Then they divide this block into small units and sell to the retailers. In this
situation, the service wholesaler can return back the unsold services to the related hotels.
In this way, sometimes the use of intermediaries can be very challenging for a service
organization. When there are various distributors of core services, the marketers think that
distribution is intense. So the marketers and management should think strategically about this
intensity which is appropriate for its services. In the success of any service sector business, there
is a significant role of knowledge, cooperation and attention of its intermediaries. If they lose
interest in particular services, that service is doomed. To overcome these challenges, the
management of an organization should implement some strategies to manage its all the
intermediaries (Lovelock and Patterson 2015). It should use more than one intermediary so it can
avoid the situation of service ignorance from intermediaries. The service companies can rely on
the internet sources more than physical intermediaries as they are not as expensive as other
intermediaries.

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