Intro to the Distribution Flows

1. TYBBA SEM 5
PLACE: Service Distribution
Prof: Ajay Shukla
ROFEL BBA

2. • WHAT IS BEING DISTRIBUTED?
• If you mention distribution, many people will likely
think of moving boxes through physical channels to
distributors and retailers for sale to end-users.
• In services though, often there is nothing to move.
Experiences, performances, and solutions are not
physically shipped and stored.
• Meanwhile, informational transactions are
increasingly conducted via electronic channels. How
then does distribution work in a services context? In a
typical service sales cycle, distribution embraces
three interrelated flows, which partially address the
question of what is being distributed:

3. • Information and promotion flow —
distribution of information and promotion
materials relating to the service offer.
The objective is to get the customer
interested in buying the service.

4. • Negotiation flow — reaching an agreement
on the service features and configuration,
and the terms of the offer, so that a purchase
contract can be closed.
The objective is often to sell the right to use a
service (e.g., sell a reservation or a ticket).

5. • Product flow— many services, especially
those involving people processing or
possession processing, require physical
facilities for delivery. Here, distribution
strategy requires development of a network of
local sites. For information- processing
services, such as Internet banking and
distance learning, the product flow can be via
electronic channels, employing one or more
centralized sites.

6. HOW SHOULD A SERVICE BE DISTRIBUTED?
• Be familiar with how services can be
distributed using three main options, and
understand the importance of distinguishing
between distributing core and
supplementary services.

7. • How should services be distributed? Here, a key
question is: Does the service or the firm’s
positioning strategy require customers to be in
direct physical contact with its personnel,
equipment, and facilities? (As we saw, this is
unavoidable for people-processing services, but
may not be necessary for other categories.)
• If so, do customers have to visit the facilities of
the service organization, or will the service
organization send personnel and equipment to
customers’ own sites?
• Alternatively, can transactions between provider
and customer be completed at arm’s length
through the use of either telecommunications or
physical channels of distribution?

8. • (The three possible options will discuss in
next video shows the first column of Table For
each of these three options, should the firm
maintain just a single outlet or offer to serve
customers through multiple outlets at
different locations?

9. • Will continuee…..
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