Distribution in services can be broadly classified into two categories- direct
sales and sales via intermediaries. The following table provides examples of
both of these categories.
Direct Sales Sales via Intermediaries
?? Electronic channels e.g., ?? Agents & Brokers e.g., travel /
ATMs, Online courses insurance agents
?? Franchisees e.g., McDonald's
?? Quasi Retailing
1) Direct Sales
Direct sales has specific marketing advantages as they help in maintaining
better control over how the service is provided or performed and also in
obtaining direct feedback from customers. There are obvious problems also in
direct sales, like; problems of expanding the business and coping with high
workloads where the services of a particular individual may be in demand or
direct sale means limited geographic market coverage.
a) Direct Sales Through Electronic Channel
To overcome such problems companies are exploring possibilities of direct sales
through electronic channels. The typical benefits the companies see in
electronic distribution of services are:
?? Consistent delivery for standardized services
?? Low cost
?? Customer convenience
?? Wide distribution
?? Customer choice and ability to customize
?? Quick customer feedback
b) Franchising
The other recent trend in distribution of services is that of franchising.
Franchising is the granting of rights to another person or institution to exploit a
trade name, trade mark or product in return for a lump-sum payment or a
royalty. Franchise is characteristed by the following features:
a) Ownership by one person of a name, an idea, a secret process or
specialised piece of equipment and the goodwill associated with it.
b) The grant of a l ...