Distributing Services

by smartamarketing

Dr. Brian Monger
Service Product Distribution

Some would have it that services are intangible.  That is technically right, but logically if a Service Product was completely intangible, how would we be able to transfer it?

All organisations – whether producing tangibles or intangibles – are concerned with place decisions.  That is how to make their offerings available and accessible to users.  Even where a service or other intangible is marketed there are physical problems.  All are associated, somewhere or other, with tangible elements requiring physical handling, storage and transportation

The subject of place decisions for services is confused as people grapple with the concept of a ‘distribution channel’ for items which are intangible, often inseparable from the person performing the service and perishable, in the sense that inventory cannot be carried.  The subject is further confused because the generalisations made about services (e.g. no inventory carried) do not always apply in specific situations.

Methods of distributing services

A distribution channel for services is the sequence of firms involved in moving a service from producer to consumer.  The usual generalisation made about service distribution is that direct sale is the most common method and that channels are short.

Direct sale certainly is common in some services markets (e.g. professional services); but many service channels contain one or more intermediaries.  It would be incorrect to suggest that direct sale is the only method of distribution in services markets.

Intermediaries are quite common.  Some of these intermediaries assume ownership risks; some perform roles that change ownership (e.g. purchasing); some perform roles that enable physical movement (e.g. transporting).

Like this short article on services and distribution (Place)?  Please comment.  And have a look at another article on Distribution in our sister blog http://smartamarketing.wordpress and checkout the smartamarketing posts on SlideShare.