traditional channel of distribution

1. FINANCIAL
SERVICES
MARKETING
TRADITIONAL CHANNELS
OF
DISTRIBUTION

2. INTRODUCTION
 Financial institutions need to make their
products available to customers
 Distribution involved a wide variety of
activities:
 Time – access when it is convenient to buy
 Place – available in any locations – accessible
and convenience
 Possession – access to the product for
consumption or future use

3. INTRODUCTION
 Distribution also provides a means of
effectively communicating with customers
and vice versa
 Distribution of financial services has been
changed due to legislation, competitive
pressures and customer demands
 The traditional distribution has been via
branch network

4. DISTRIBUTION
CHANNELS
 Distribution channel or marketing channel
 The groups of individuals or companies which are
involved in directing the flow and sale of products
and services from the provider to the final
consumer
 Distribution channels can be classified into:
 Direct – the movement and sale of the product
directly between the provider and the customer
 Indirect – products flow via intermediaries or
middlemen

5. DISTRIBUTION
CHANNELS
 Direct distribution channels
Financial
Services Providers
Financial
Services Providers
Financial
Services Providers
Branch or
ATM
Phone or
Internet
Company
Sales staffs
Customer
Customer
Customer

6. DISTRIBUTION
CHANNELS
 Indirect distribution
channels
Financial
Services Providers
Financial
Services Providers
Brokers
Financial
Services Providers
Customers
Customers

7. DISTRIBUTION
CHANNELS
Distribution
Channels
 Direct
Product and services delivered directly by the
producer
Relies heavily on sales staff to contact customer
and make sales
More effective, the company has full control of
the products and services offered

8. DISTRIBUTION
CHANNELS
Distribution
Channels
 Direct
 3 main types of direct
distribution:
Branch networks
Customer goes to provider
Requires the organization
to have its own outlets with
full range of services
Dominant distribution
channel for retail banks

9. DISTRIBUTION
CHANNELS
Distribution
Channels
 Direct
 3 main types of direct
distribution:
Company Sales Force
Requires the organization
to have a dedicated sales
force that take a range of
services to actual &
potential customers
Use extensively in
marketing life insurance
products

10. DISTRIBUTION
CHANNELS
Distribution
Channels
 Direct
3 main types of direct distribution:
Remote distribution
Providers and customer
are physically separate
Requires the organization to have
the system that do not require any
Face –to –face contact between
Customers & provider
Eg. Phone banking and internet banking

11. DISTRIBUTION
CHANNELS
Distribution
Channels
 Indirect
Use intermediaries to distribute
services
Intermediaries are separate
organization that responsible to
provide services to consumers
Advantage – perform function of
producers and producers could cut
coast
Disadvantage – less control over
the ways the intermediaries
marketed the services

12. BRANCH NETWORKS
 Branch network is a direct distribution channel
 Retail banks are traditionally rely on branch
network
 Advantage :
 High level of convenience to customers in strategic
locations
 Using technology will automate basic transaction –
costs can be controlled
 Small number of staff can carry out a larger volume of
business
 Customers can do their banking while physically
visiting the branch- sense of security and assurance

13. BRANCH NETWORKS
 Disadvantages
 High maintenance cost of ATMs
 Long queue during peak periods and the long
waiting period may results in frustrated
customers
 Difficult to visit branch during normal working
hours to conduct basic banking activities
 Prone to vandalism due to non-availability of
24- hour security guard on the ATM
 Can be frustrating to deal with face to face
interaction with branch staff

14. DIRECT SALES FORCE
 Financial providers ordered the company’s
staff to contact and attract customers
 Two roles of direct sales force include :




Make sale
Problem solver
Building and servicing continuing relationship
Cross-sell other product

15. DIRECT SALES FORCE
The sales process
Targeting and evaluating prospects
Preparing the ground work
Contacting the prospect
Making the sales presentation
Dealing with objections
Closing the sale

16. DIRECT SALES FORCE
 In order for the sales force to perform
better, attract more given customers and get
more sales , they need to be given
remuneration
 Among the remuneration methods are:
 Commission
 Straight salary
 Or the combination of the two

17. FINANCIAL PLANNERS
 A Financial Planner or Personal Financial Planner
is a practising professional who helps people to
deal with various personal financial issues
through proper planning
 Include but not limited to these major areas
tertiary education planning, retirement planning,
investment planning , risk management and
insurance planning, tax planning, estate planning
and business succession planning (for business
owners).

18. BANCASSURANCE
 Integrated banking and insurance business
 Where insurance- based and other related product
are distributed through a retail branch networks
 Eg. Eon Bank Group Bancassurance,
UOB,Maybank Life Assurance Berhad
 Advantage:
 Reduce distribution cost
 Increase sales –in terms of accessing the bank’s existing
customer

19. BANCASSURANCE
 Customer database – able to identify types
of customers to buy certain products or
services
 Challenges
 Culture of selling is different – to move staffs
towards a selling function may be challenging
 Customer- many distrust life insurance
 Bancassurance – complex product may
contribute towards customers resistance

20. Thank You