Distribution channels in marketing are one of the classic “4 Ps” (product, promotion, price, placement a.k.a. “distribution”). They’re a key element in your entire marketing strategy — they help you expand your reach and grow revenue. Show
B2B and B2C companies can sell through a single distribution channel or through multiple channels that may include:
[Note: You can download step-by-step plans for creating and managing marketing channels of distribution here.] Here are three examples of distribution channels in marketing:
To create a good distribution program, focus on the needs of your end-users.
Wholesalers, resellers, retailers, consultants and agents already have resources and relationships to quickly bring your product to market. If you sell through these groups instead of (or in addition to) selling direct, treat the entire channel as a group of customers – and they are, since they’re buying your product and reselling it. Understand their needs and deliver strong marketing programs; you’ll maximize everyone’s revenue in the process.
Not Sure Where to Start with Your Distribution Channels?Access detailed step-by-step plans in our new marketing website. Distribution Channels Concepts & StepsBefore you beginYou can evaluate a new distribution channel or improve your channel marketing / management at any time. It’s especially important to think about distribution when you’re going after a new customer segment, releasing a new product, or looking for ways to aggressively grow your business. Evaluate how your end-users need to buyYour distribution strategy should deliver the information and service your prospects need. For each customer segment, consider:
Match end-user needs to a distribution strategy
Identify natural partnersIf you want to grow beyond the direct model, look for companies that have relationships with your end-users. If consultants, wholesalers or retailers already reach your customer base, they’re natural partners. Build your distribution channelIf you’re setting up a distribution channel with one or more partners, treat it as a sales process:
Minimize pricing conflictsIf 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. Drive revenue through the channelService your channel partners as you’d service your best customers and work with them to drive revenue. For example, provide them with marketing funds or materials to promote your products; run campaigns to generate leads and forward them to your partners. After Designing Your Distribution ChannelsAs you’re creating a new channel you’ll need a pricing strategy and a sales process. When your channel is up and running, you can start launching marketing campaigns to channel partners and end-users. How does an effective channel strategy contribute to the firms growth?Increase sales: An effective channel strategy can help companies scale faster, acquire new customers and increase sales by giving them access to a larger target audience of potential consumers.
How does the environment of marketing channels help in developing marketing strategies?Marketing channels operate in a continually changing environment. 1 Therefore, the channel manager needs to be sensitive to the environment and the changes occurring in order to plan effective marketing channel strategies for meeting these changes successfully.
How do you develop a channel strategy?Six Keys to an Effective Channel Strategy. 1 - Have a plan. ... . 2 - Recruit the right partners - and impress them. ... . 3 - Simplify the on-boarding process. ... . 4 - Provide the right sales and marketing material. ... . 5 - Start priming your sales lead pipeline. ... . 6 - Measure and report progress. ... . Early Standardization Makes For Smooth Growth.. Why are marketing channels important to the firm?Marketing channels are important because they: Identify the best channels to distribute to a target audience. Ensure products reach their intended audience. Save time and money by having a channel do the work.
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