Think of a distribution channel as one slice of the overall marketing pie. It is how a company gets its products or services to the consumers. When conducting a marketing analysis, it is important to take a look at this segment to ensure that you are using the right channels to get your product to your buyers.
Here are three examples of distribution channels in marketing: You have a second product line for small businesses. Instead of using your sales team, you sell this line directly to end-users through your website and marketing campaigns.
You have two markets and two distribution channels.
You sell a product through a geographical network of dealers who sell to end-users in their areas. The dealers may service the product as well. Your dealers are essentially your customers, and you have a strong program to train and support them with marketing campaigns and materials.
You sell a product to a company who bundles it with services or other products and resells it. A VAR may work with an end-user to determine the right products and configurations, and then implement a system that includes your product.
To create a good distribution program, focus on the needs of your end-users.
If users need personalized service, you can utilize a local dealer network or reseller program to provide that service. If your users prefer to buy online, you can create an e-commerce website and fulfillment system and sell direct; you can also sell to another online retailer or distributor that can offer your product on their own sites.
You can build your own specialized sales team to prospect and close deals directly with customers. Wholesalers, resellers, retailers, consultants and agents already have resources and relationships to quickly bring your product to market. Your end-users get the information and service they need before and after the sale.
Your current system may also be difficult to manage. Access detailed step-by-step plans in our new marketing website. Evaluate how your end-users need to buy Your distribution strategy should deliver the information and service your prospects need.
For each customer segment, consider: How and where they prefer to buy Whether they need personalized education and training Whether they need additional products or services to be used along with yours Whether your product needs to be customized or installed Whether your product needs to be serviced Match end-user needs to a distribution strategy If your end-users need a great deal of information and service, your company can deliver it directly through a sales force.
You can also build a channel of qualified resellers or consultants. The size of the market and your price will probably dictate which scenario is best. You may also use an inbound telemarketing group or a field sales team.
Identify natural partners If you want to grow beyond the direct model, look for companies that have relationships with your end-users. Establish goals, service requirements and reporting requirements.
Run promotions and programs to support the partner and help them increase sales. Minimize pricing conflicts If you use multiple channels, carefully map out the price for each step in your channel and include a fair profit for each type of partner. Then compare the price that the end-user will pay; if a customer can buy from one channel at a lower price than from another, your partners will rightfully have concerns.
Pricing conflict is common, and it can jeopardize your entire strategy, so do your best to map out the price at each step and develop the best solution possible. For example, provide them with marketing funds or materials to promote your products; run campaigns to generate leads and forward them to your partners.
When your channel is up and running, you can start launching marketing campaigns to channel partners and end-users.Jun 26, · A channel acts as an important part of your small business's overall marketing strategy and is one of the “Four Ps” of marketing -- product, promotion, price and placement, or distribution.
When the channel members are ready to provide several services to customers, like home delivery, free repairing, credit facility, installment payment schemes, and other post-sales services, the manufacturers like to involve them in distribution to avail such services to their customers.
Start studying Chapter 12 Global Placement and Distribution Channels. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Distribution and Placement: How Do You Get the Product to the Customer?
by Ciaran John. The Major Functions of a Distribution Channel. The Key Things to . Distribution channels play an essential role in a company's supply chain. A distribution channel strategy is one way a company can bring its products to market.
Placement and Distribution Channels A well-executed project doesn't end when the report has been printed or the Web site is launched. Unfortunately, you cannot rely on consumers to come to you for the information.