Objectives After successfully completing this chapter, students should be able to: 11.1 explain the concept of a channel of distribution and how it applies to the banking business (sec 11.2), 11.2 explain some ways in which the intangibility, inseparability, ariability, and perishability of banking serices affect their distribution (sec 11.2.2) 11.! discuss seen physical channels of distribution for banking serices (sec 11.!) 11." describe the kinds of information that should be obtained in ealuating a prospectie site for a new branch (sec 11.!.1.2) 11.# proide examples of intermediaries in the distribution of banking serices (sec 11.") Key Concepts $hannels of distribution are the intermediaries that moe the products from the producer to the ultimate user. %ecause serices are intangible, their distribution cannot be handled in this way. $hannels of distribution in a serice industry are any means of increasing the aailability or conenience of the serice that also increases its use or the reenues from its use. &he deliery of banking serices can ary greatly form customer to customer and location to location. &his characteristic of serices is called ariability. 'erices are perishable (cannot be stored), so traditional intermediaries cannot be used to distribute them. (oweer, serices are made more aailable through automated tellers, telephone, computer, and debit and credit cards. &he principal channel of distribution for a bank)s serices is the bank location. 'ite location inoles research to estimate the economic iability of the area in order to support the branch or bank application that must be submitted to banking regulators. Topical Outline 11.1 *ntroduction 11.2 +arketing $hannels 11.2.1 ,istribution in a serice industry 11.2.1.1 An example from the $ommunication *ndustry 11.2.2 $hallenges to the distribution of bank serices 11.2.2.1 *ntangibility 11.2.2.2 *nseparability 11.2.2.! -ariability 11.2.2." .erishability 11.2.2.# $lient /elationships 11.! .hysical channels of distribution for bank serices 11.!.1 &he branch network 11.!.1.1 'ite location decisions 11.!.1.2 0actors in location selection 11.!.1.! +erging as an expansion strategy 11.!.1." &he decision to close a branch 11.!.2 +aking banking serices accessible to disabled 11.!.! %eyond brick and mortar 11.!.!.1 &elephones and call centers 11.!.!.2 Automated teller machines 11.!.!.! Automated loan machines 11.!.!." &he personal computer 11.!.!.# .lastic cards 11.!.!.1 -irtual branches and automated ideo banking 11." *ntermediaries in the %anking *ndustry 11.# 'ummary