Selecting Distribution Channels

It was only about 25 years ago that most banks typically only used one distribution channel
(their branches). However, since that time they have dramatically expanded the number of
channels that they use.
Below is a list of common distribution channels for a bank. Your task is to identify the most
appropriate mix of channels for two different banks.

About the Banks and Their Possible Channel Choices

The first bank is a major bank that has an extensive number of branches throughout the
country. One of the key aspects of their positioning is that they offer great personal service.
Select the five most suitable channels for them.
The second bank is new to the country. They have no branches and have very little brand
awareness in the market. Their plan is to specialize in offering great value home loans only.
Select the five most suitable channels for them.

Direct channels Direct channels Indirect channels

Mobile managers (who visit Enable transactions through

Branches the customer) third-party retail stores

Personal Banker (staff who

directly look after Utilize mortgage/loan
Phone (a call center)
customers) brokers

Phone (an automated Utilize investment

system) Direct mail advisers/financial planners

Get referrals from real estate

Internet banking Email agents and accountants

Generate sales/referrals via

ATM’s Mobile phone messages independent internet sites

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Student Discussion Questions
1. What are the most suitable distribution channels for each bank?

The most suitable distribution channels for first bank

1- ATM Channel: You may now withdraw cash from an ATM in the area at
any time of day or night without having to visit the bank. Financial services
are now available to customers outside of regular business hours. An ATM is
a device that takes cash inputs and outputs them continuously, seven days a
week. In its early phases, it could simply distribute cash and do no other
tasks.
2- Internet banking is the most fundamental level of service, where clients may
access information on a range of products and services via the bank's
websites. Email may be used to both receive and answer to client inquiries,
Websites with a few simple transactions that let users apply for services,
place orders, and check their account balance.
3- Like ATMs, mobile banking is another kind of electronic commerce that
enables customers to transact business whenever they choose, day or night,
seven days a week. You'll get an SMS message on your phone after you
deposit money or checks letting you know the money has been deposited to
your account.
4- Customers can visit a branch location to access a variety of financial services
and goods at one location. Customers can seek advice from bank personnel in
the case of a problem, have any questions concerning banking operations
addressed, and have any concerns dispelled.
5- Utilize investment advisers/financial planners.
the most suitable distribution channels for second bank
1- Personal bankers are professionals who, for the most part, focus on helping
clients manage their bank accounts and other financial affairs. To meet each
account’s financial demands more effectively, the banker's job is to establish
long-lasting relationships with clients.
2- Internet banking is the most fundamental level of service, where clients may
access information on a range of products and services via the bank's
websites. Email may be used to both receive and answer to client inquiries.
Websites with a few simple transactions that let users apply for services,
place orders, and check their account balance.
3- Customers can visit a branch location to access a variety of financial services
and goods at one location. Customers can seek advice from bank personnel in
the case of a problem, have any questions concerning banking operations
addressed, and have any concerns dispelled.
4- Use mortgage/loan brokers: A mortgage broker assists borrowers in
establishing contact with lenders and looks for the loan that best suits their
needs for an interest rate and current financial position. Additionally, the
mortgage broker collects documentation from the borrower and provides it
to a mortgage lender for underwriting and approval.
5- Get referrals from real estate agents and accountants.

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 2. Is your selection of channels relatively similar or different between the two banks?
There is a slight difference for the channels between the two banks.
3. Therefore, what role does 'place' (distribution channels) play in a firm's overall
strategy and marketing mix?
explains how and where a business will position its goods and services to increase
market share and clientele.

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