Channel Marketing involves the paths that brands use to provide their communications, products, and/or services to consumers. Therefore, it entails everything from packaging, advertising, handling of inventory, and logistics. These paths involve organizations that can be producers, middle-man, or users.
This post will discuss the four types of processes in marketing channels, the value of channel marketing, and finally, questions and criteria to select the right channel.
Channel marketing process types
The types of processes to drive products to consumers are direct selling, intermediaries, dual distribution, and reverse channels.
Firstly, direct selling occurs when the manufacturer sells directly to the final consumer. For instance, we can think of companies like Tesla, Dollar Shave Club, and Warby Parker.
Secondly, intermediaries are companies that deal with both producers and end consumers. Certainly, this was the original business model for Nike, to learn more I recommend reading Shoe Dog by Phil Knight.
Thirdly, dual distribution is when a brand uses multiple channels to deliver products to consumers. For example, many clothing brands sell direct to consumers on their stores but also use large retail stores to market their products.
Finally, reverse marketing involves when consumers return a product. In this case, we can think of companies that do upcycling. Also, we can think of product recalls.
What is the value for brands
You might think the ideal would be to market directly to consumers to enjoy the best possible margins, nonetheless, depending on your industry there is different value in a channel marketing approach.
Firstly, the relationship between producers and buyers. For small companies with limited resources and experience using an intermediary is key. However, you must be careful when negotiating the terms of your deal!
Being that said, the more you need to add intermediaries the more you will need to work your margins. Therefore, evaluate different channels and alternatives for the best value.
Lastly, evaluate the impact of different channel strategies and the impact on your brand equity. Therefore does associating with different distributors affect your brand image?
Channel marketing criteria
To conclude let’s summarize what criteria should you evaluate when selecting your marketing channels.
- Consumer preferences: What is more convenient for your consumer habits and preferences?
- Cost: How does the market affect your pricing strategy and your financial results? Volume vs. margins.
- Brand: How does your brand image is impacted; how will it be associated, and will you need to adapt your brand elements or packaging?
- Localization: Does your channel choice help you enter desirable new markets, and are the veterans on the new audience?
In summary, your marketing channels will impact your 4ps in marketing; before signing any contract, evaluate all these questions along with the financial, logistic, and legal implications.
If you liked this content please check out my last post on forecasting sales using a customer journey.