 |
|
| |
|
MARKETING
Marketing Channel Issues All businesses want to raise profits – mostly
shooting for the same goals:
However, while most companies know their costs and results of sales, few know how to effectively get more out of their marketing channels. In fact, marketing channels are often overlooked in an efficiency drive because they are external. Most supplier-reseller systems are far less sophisticated than modern manufacturing and inventory control techniques. Yet, independent resellers (channel partners) have a large impact on how a supplier’s products or services are positioned and sold. There are great opportunities for firms to differentiate themselves through effective marketing channel management because their competitors often have little channel focus. Some critical marketing channel issues are detailed below: SOME COMMON ISSUES Motivating and Controlling Resellers Many companies migrate distribution from a direct sales force to distributors or dealers in order to reduce selling costs. Often suppliers find that they have little control over how their channel partners position and sell their products. Channel partners frequently sell competing products. They aren’t always loyal or developmental. Customer service can suffer as channel partners chase the best margins for short term gain. Alternatives to Direct Sales Many products require personal selling. Some
businesses can’t afford a direct sales force and are concerned about
their lack of control over independent resellers.
These companies need cost-effective distribution that maintains
company control of the sales process. Managing Multiple Channels To reach various market segments, some firms distribute products through dealers, distributors and through their own direct sales forces. Often, these channels compete AGAINST each other for the same customers. The resultant channel conflict causes a decline in customer satisfaction or loss of repeat sales. Restructuring distribution without losing a company’s best channel partners and market coverage is a major challenge. Page 2 Top
Restructuring Company-owned Outlets Maintaining company-owned, full-service brand networks is expensive. To contain costs, it is often possible to reduce branch numbers to consolidating branches while maintaining market coverage. Branch performance can also be improved by restructuring their ownership to inject a stronger profit-orientation for branch managers. SOME COMMON CONSTRAINTS No experience with Channel Partners Many organisations don’t have experience in dealing with resellers. They have always sold direct and don’t have the internal expertise to develop alternative marketing channels. Page 3 Top No Cross Industry Knowledge While many managers know a great deal about distribution in their own industries and countries, they often lack knowledge of distribution techniques in other industries and countries – knowledge with could help them. Lack of Perspective A manager’s basic function is “to get out the daily wash.” As managers often focus on today only they don’t have the time to investigate how they might improve their marketing channels. SOME SOLUTIONS A successful marketing channel strategy requires:
Today, with lower marketing costs, shorter product life cycles and decreasing product differentiation many businesses need to seek competitive advantage through non-product related business activities. Competitive advantage in the new millennium will not be the exclusive domain of product innovators and technology leaders. It will also come to those companies that develop and maintain the most successful marketing channel strategies.
|
|||||||||||||||||
