Page 226 - DMGT510_SERVICES_MARKETING

Unit 12: Distribution of Services

Targeting different segments: To make different segments feel that they are being offered Notes

exclusive service products for their segments, distribution is made through different
channels. Rural areas are sparsely populated and can be covered through agents while in
urban clusters it is feasible to go direct with own sales personnel. Some areas may not
have the services of specific channel members or intermediaries. Then the service marketer
can go direct in some areas and through intermediaries in other areas.
Targeting different markets: like industrial/institutional markets and consumer markets.

Many travel and insurance service firms have direct sales operations for large firms while
they use the agent route for individual consumers.
Selling different and unrelated service offers: like banking and insurance of life and general

insurance or mutual funds and travel services, etc.


General Sales Agents Fracas: The Rumble
Caselet

he travel agents are becoming reluctant to share the intermediary commission
with the GSAs. Their opinion was that as they were the first line of contact with the
Tcustomers and the most visible aspect of the service firm, they were anyway doing
most of the marketing for the airline, handling enquiries and performing such other
services as forwarding complaints and carrying on promotions for the airline.
With the adoption of CRS the world over, there was more direct contact between the
airlines and the travel agents. With the airline deregulations, there was heightened
competition and pressure on margins felt across the board by all parties - airlines, travel
agents, hotels etc. A case was being developed to remove one layer of intermediary to
improve the bottom line. The GSAs were being phased out in most countries, especially in
Europe and the USA.

There was a further boost to this movement by certain technological developments and
their adoptions (CRS and the Internet) by the consumers, intermediaries and the airlines.
India was one of the last markets where the GSAs were still functioning. The airlines were
not too keen to completely do away with the GSAs. They were useful by their presence in
smaller markets where it would not have been cost-effective for the airlines to have a
permanent office. Often the smaller markets had no flights of the airlines taking off but
had a lot of passengers who took the flights from major centres, and therefore needed to
be serviced. There was a major confrontation with the travel agents and the airlines came
to a compromise: The GSAs would not be present in the metros but could operate in
smaller towns.
Thus, British Airways decided to retain the services of DKI Travel Services only in Pune,
Nagpur (Maharashtra), Goa, Indore (Madhya Pradesh), Jamshedpur (Bihar) and
Bhubaneshwar (Orissa), etc. It had a lot of passengers from these places, which caught their
flights from Mumbai. DKI serviced them, and enabled the travel agents to do the ticketing
by constantly updating them on tariffs, and other product details. Travel agents like Jose
Travels or Frequent Travels in Indore, could book a British Airways flight for a passenger
through a CRS like Galileo installed in their office.
DKI Travel Services seemed to have got a breather and a reprieve. But there were looming
storm-clouds that still threatened its existence: Billing Settlement Plans. BSP is a radical
change driven by globalisation, an attempt at an industry-wide standardisation. Airlines
Contd...

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