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Definition
It is “path” along which services and marketing
related inputs move from service provider to the
customer and vice-versa .
It may consists of different layers of intermediaries
such as Agents/ Brokers/ Aggregators etc.
The choice of the intermediaries is customer /
product specific
It could be a very important part of overall marketing
strategy – extent of use depends on push vs. pull ,
Intensive vs. Exclusive , corporate vs. retail etc.
Functions
Functional - Business procurement , business processing ,
transportation , service delivery , flow of revenue etc.
payment etc.
Marketing – Market information , competitors analysis ,
market research , sales promotion , grievance handling etc.
It is a part of overall marketing strategy – relates directly to
two Ps Place & Promotion and indirectly to other two
Product & Pricing
Specialization – Extending supportive / specialized
services.
In short it helps in increasing efficiency , reducing
complexities & extending specialized support.
Source of Competitive Advantage
LIC – Riding on individual agents / Corporate sales
Max Life : Quality agents
HDFC Life / ICICI Pru / SBI Life – Bancassurance
ICICI Group / Aegon Religare – Online Insurance
policy distribution
Bajaj Allianz General – Virtual office
Aviva Life – Vodafone. Similar tie-ups wit PayTm /
Airtel Bank
Sriram General – IRCTC tie-up
Formats of distribution
Owned Vs. Third Party
Level of distribution channels – zero , one/two level
Single or Multiple / Hybrid model
Horizontal system – Bancassurance / ATMs in LIC
branches
Channel Resources
Manpower
Distribution
Training
Accounting
Advertising
Data Processing
Insurance / Risk Transfer
Support base for augmented services
Value Proposition
For the company For the customer
Cost saving – Specialization Location /Delivery
Reduce Exchange time Time Management
Bulk - breaking / Sorting Extra Servicing Support
Creating market Add on / Accessories
Sale Support Help in purchase decision
Feedback support
Choice of the channel
Type of product – Goods / Services
Company objective – STP
Brand Perception – Exclusivity vs Mass
Intensive (concentration ) vs Extensive (wide
coverage)
Existing and potential market trend
Push vs Pull Strategy
Cost associated with different layers
Pl read last two years IRDAI report.
Basic Chapter of book