Here are the key points to remember in this chapter

» The basic function of distribution is to provide the right products to customers at the right place and at the right time.

» A distribution channel is a set of marketing intermediaries that form links between producers and customers.

» The most dramatic change in the distribution of financial services in recent years has been the shift away from physical channels to electronic channels of distribution.

» When choosing distribution channels, marketing managers need to consider the characteristics of the market, the products offered and the intermediaries used.

» While intermediaries or 'middlemen' can be eliminated, the functions of intermediaries cannot.

» Intermediaries act as middlemen between service providers and the customer. They match customers' needs to products, provide convenience perform a communication function.

» Setting the right price is important because it directly affects an organization's profitability and will also have an effect on how customers perceive the organization.

» Price is the only component of the marketing mix that generates revenue for an organization.

» Pricing objectives and strategies need to be in line with the organization's marketing strategy and moreover meet business targets.

» Disadvantages in house brands for the manufacturer include:

1. Loss of identity

2. Competition with manufacturer's own brand

» When it comes to financial services, customers are motivated by factors such as security, peace of mind, prestige and wealth - as well as price.

» Relationship pricing in the form of special rates or additional services can be used by financial institutions to enhance customer relationships.

» Pricing objectives might be profit oriented, sales oriented or competition oriented.

» The demand for a product, the elasticity of that demand and competitor's activities are some of the factors influencing pricing decisions.

» Pricing strategies include the use of discounts, market skimming or market penetration strategies and one-price or flexible-price policies.

» Customer service is one of the most important determinants of competitive advantage and quality service leads to higher profits.

» The periods during which the customer interacts with the service provider are sometimes called service encounters or moments of truth.

» If customers' expectations do not match the perceived level of service received, a service gap is said to exist.

» For high quality service to be maintained, service representatives need to deliver service that consistently meets or exceeds customer expectations.

» Traditionally, the interaction between service providers and their customers has been close; however, personal contact is being reduced with the introduction of electronic channels of distribution.

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