University of Central Florida Selecting Distribution Channels in Banking Exercise MAR 3023 Selecting Distribution Channels Exercise In the beginning, mos

University of Central Florida Selecting Distribution Channels in Banking Exercise MAR 3023

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.

ACTIVITY/TASK

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

customer)

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

advisers/financial planners

Internet banking Email Get referrals from real estate

agents and accountants

ATM’s Mobile phone messages

Generate sales/referrals via

independent internet sites

QUESTIONS

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?