Channels of Distribution

Channels of Distribution 
Because services are intangible, the notion of physical distribution channels does not apply. However, the general principle of channels offering customers access to the product does. Because services are characterized by the inseparability of production and consumption, service organizations must be physically present when the service is delivered or engage others to be present.Any time the product leaves the producing company's hands and is put under the control of others, there is the potential for the independent channel member to do a less effective job of marketing the product than the producer would. This is an even greater problem with services because they are often delivered by people. Nonstandardization of services increases when the service is being delivered by people who do not work for your company.
As a result, we can draw a distinction between the service principal (the company or person originating the service) and the service deliverer (the person or company that actually delivers the service to customers). As with physical goods, service deliverers or intermediaries can provide a number of benefits to the principal. Service deliverers can co-produce the service with the principal. For example, franchisees delivering auto­mobile lubrication services (e.g., Jiffy Lube) execute the principal's concepts by operating
the service centers and lubricating the cars (often other services are available as well). Service intermediaries also provide the customer with locations that make it easy to purchase services. Multiple Jiffy Lube outlets in a metro­politan area make it convenient for customers to purchase the lubricating services. These local retail outlets also promote the Jiffy Lube brand name and provide local presence for the service principal.
Because services are intangible, perishable, and gener­ally not storable, services must be brought to the customer. That is, the service principal must design a channel struc­ture that brings the customer and the provider together.
The three major approaches to service distribution are franchising, agents and brokers, and electronic channels.

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