Role of Distribution Channels in Service Business

Distribution channel can be defined as the path through which goods or services travel from the vendor to the customer. It can also be defined as the path through which payments reach vendor from the customers. The distribution channel can be as short as a direct transaction from the vendor to the customer or a transaction including interconnected intermediaries such as wholesalers, distributors, agents and retailers etc. A product does not reach the customer with ought going through a channel involving manufacturer, exporter, importer, distributor and the retailer, which is called as channel of distribution. Distribution channels play important role in service business to acquire maximum market share in short time.

The demand for a product or service can be improved or managed using a combination of distribution channels. Business promotion agencies choose different distribution channels to reach various market segments and develop different pricing strategies based on the income of the market segment. Using different distribution channels to promote a product or service leads to acquire new markets through a low-cost channel. Main distribution channels can be listed as direct sales, agents, partner and open distribution or opaque distribution of the product etc.

channel distribution strategy

Saroj Ads first searches for effective channels to promote a product or service to implement its distribution strategy. The channel distribution strategy adopted by Saroj Ads has resulted long lasting business and customers to its clients. Saroj Ads team of experts develops a best channel distribution strategy within the budget of the client. Saroj Ads searches for the best channels of distribution strategy to acquire maximum market share for a product or service in the specified time.

Role of Direct Sales in Service Business  

It is one of the distribution channels that lead to acquire control on marketing the services or products etc. This channel allows the service provider to contact customers without any intermediaries through visits, mail order or online and have complete control over presentation of offers and pricing. Service providers can receive direct feedback, as they interact directly with the customers in the direct sales distribution channel. Service provider’s needs to use other distribution channels also to manage fluctuating demand.

Role of Agent in Service Business

Agents are the best option, if the service providers are not interested in marketing.  Agents act as individual contractors and work for agency. Agents interact with customers to improve sales with a commission. Agents offer different exclusive services among other service providers based on the type of agreement with manufacturer. Manufacturer will get good number of customers through agents, but the disadvantage is the customer cannot order the service or product directly.

Role of Partner in Service Business

It is possible to offer services or products within the frame work of the partners operations. For example, computer repair services can be offered through a local computer store. Similarly computer installation services can be offered for the home through hardware chain. A product or service can reach lot of customers via partner, but independent customer cannot be acquired for the business through partners.

Role of Opaque Distribution in Service Business

Opaque distribution can be defined as selling unsold services or products at a discounted price. It is called ‘opaque’ because the supplier remains hidden until the completion of sales.  It is possible to achieve temporary drop in demand by selling products or services at a discount price keeping higher-margin customers in the opaque distribution channel. In the opaque distribution channel customers don’t know the actual price of the services offered at discount price. In this channel the opaque re seller promotes a product or service on his name. Disposal of surplus airline seats or hotel rooms through third party discount agencies is the best example of opaque re sellers or opaque distribution channel.