Selecting Distribution Channels Exercise
In the beginning, most banks typically only used one distribution channel (their branches). About 20 years ago things
started to change and banks 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.
Bank #1 is a major bank with an extensive number of branches throughout the USA. One of the key aspects of their
positioning is that they offer great personal service.
Bank #2 is new in the USA. 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.
Consider the most suitable channels for each of them to meet their objectives from the options below.
Direct channels Direct channels Indirect channels
Branches Mobile managers (who visit the
Enable transactions through
third‐party retail stores
Phone (a call center) Personal Banker (staff who
directly look after customers) Utilize mortgage/loan brokers
Phone (an automated system) Direct mail Utilize investment
Internet banking Email Get referrals from real estate
agents and accountants
ATM’s Mobile phone messages
Generate sales/referrals via
independent internet sites
1. What are the 3 most suitable distribution channels for each bank? Why?
2. Is your selection of channel options relatively similar or different between the two banks? Why?
3. What role does ‘place’ (i.e., distribution channels) play in a firm’s overall strategy and marketing mix?