Page 225 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes 12.1.4 Types of Intermediaries

There are two types of channels at the disposal of the marketer:
1. Direct distribution: This is a channel that has no middlemen and consists of only the
producer and the end user. The firm reaches directly to the consumer and the service
industry mostly uses this method of distribution. Only those goods marketers who have
strong finances and can afford to lock up a lot of their capital in inventory or whose
products have high technology (hi-fi speaker and other audio equipment manufacturer
Bose Corporation) adopt direct distribution. Thus a service firm can choose to go direct if
it has well trained personnel, as in the case of hospitals, hotels and education services.
2. Indirect distribution: This distribution consists of the producer, end consumer and at least
one middleman or intermediary. For consumer and industrial goods distribution, there is
more than one intermediary while services have one middleman, the agent. Airlines use
the indirect method, which includes travel agents.

Figure 12.1

Task Enlist 5 companies that follow direct distribution and 5 companies that follow
only indirect distribution. Also draw the distribution process for any one of them.

Multiple Channels

Sometimes service marketers resort to more than one channel of distribution for the following
reasons:
Targeting a wider market: To get a wider penetration a virtual swamping coverage is

done by using multiple channels.
Avoiding over-dependence on a single channel: A service marketer could become vulnerable

to unreasonable demands in the later stages if it is distributing through only one channel.
To spread the risk of dependence, many service marketers like credit card marketers have
more than one channel.

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