Chapter 11 - Designing and Managing Integrated Marketing Channels

 

There are a lot of parties involved in the process of producing a product and selling it to the target customers. Starting from the suppliers and ending with different types of marketing intermediaries whose adding value to the final output. A manufacturer or a producer must take decisions on selecting the best intermediaries to bring the offering from their end to the final user and the most suitable marketing channel system to deliver the product to the target customer.

 

A Marketing Channel

It is a system which the particular set of independent organizations involved in the process of making the product or service available for use or consumption. When making decisions on what marketing channel systems to use, marketers must think either they need to go to the customers and sell their offerings or allow customers to come to the organization to get their offerings. It means, marketers have to think of selecting either “Push strategy” or “Pull strategy” to deliver their offerings to the target customers. In the Push strategy, it uses the manufacturer’s sales force, trade promotions and means to induce the intermediaries to carry, promote and sell products to the customers. In contrast, “Pull strategy” uses advertising, promotion, and other forms of communication to persuade customers to demand the product from the intermediaries. Hence, it is crucial to select the most appropriate marketing channel to deliver the offerings to the target customers.

Process of designing a marketing channel system

 

 

To start with any kind of a process, marketers need to analyze the needs of the customers to tailormade the promotion and delivery options according to them. Based on the types of needs of the customers then marketers can think of setting objectives for each customer base depending on their needs and to communicate those objectives to the channels they are going to select. i.e. what marketers or manufacturers expect from marketing channels in delivering their products to the target customers. While setting objectives for the marketing channels, marketers can search for major channel alternatives available in the market. They need to carefully analyze the alternatives with various factors including costs, control, adding value to the product etc. because all these processors incur huge costs. Those costs ultimately pass on to the customer since company needs profits. Hence, marketers must be careful when thinking about the channel alternatives. In the last step, it is required to evaluate the major channel alternatives under a few factors such as: economic, control and adaptive criteria. Because every channel is working and contribute in a different way in creating value to the product.

 

Factors to be considered when selecting channel members

When selecting channel members, it is recommended to consider certain factors which distinguish the best channel members from others. Because if one channel member does something wrong, the whole process and efforts will be ruined, and the complaint will come directly to the producer but not to channel members. Hence, it is important to carefully analyze the factors to select the most suitable channel members for the process.

• Number of years in business
• Other lines carried
• Growth and profit records
• Financial strength
• Cooperativeness
• Service reputation

 

Case study

You own a traditional brick and mortal retail store in an out-of-town location. Currently you operate a minimal e-commerce presence.

-          What is your marketing channel strategy given the changes in buying habits and channel choices of consumers?

-          How do you compete with the large retailers?

 

According to the information provided, if the retail store is located in an out-of-town area, many residential customers can be expected to visit the store. Because of the convenience and the privacy, those customers prefer coming to this retail store rather than going to a large retail store in the city. When considering the customer base, there can mainly be residential customers, online customers, and walk-in customers. Those customer segments have different buying patterns and selections of products. Since this is a retail store, grocery items and other family essentials can be sold at the store at a comparatively lower price. And the opportunity can be given to local producers to sell their products at this retail store. Consumers’ buying habits are different from person to person and the product preferences also be different according to that. Since our customer base represents all the generations in society, we cannot select one particular channel to cater for them all. Hence, we selected email marketing, social media marketing, newspaper advertisements, promotional activities, websites etc. i.e. we use pull strategy to communicate about our store to our customers.

 

There is huge competition arise from large scale retail stores in the city by providing wide verity of selections at discounted prices and so on. In order to defend the competition coming from giants in the industry, we decided to expand our online presence by introducing a new customer-friendly mobile app with special features to reach our customers very quickly than usual store visits. On the other hand, we contacted some local suppliers to provide their products to be sold in our store which are organic and healthy, targeting the elder customer segments in the market. We always try to maintain the quality of the products since our customers prefer quality products at lower prices. Apart from those activities, we thought of installing a small food court inside the store for customers to have a small snack after doing their shopping. For that also, we contacted a local food producer to establish a stall inside our store and to provide quality, delicious snacks, and food for an affordable price.

 

These activities sometimes will not make a huge impact to the giants in retail stores but it can be possible to keep our existing customers by providing a high quality products and a nice shopping experience which in turn help us to promote our store through word of mouth communication which is the most powerful promotional tool.

 

 

References

1.     1. Avgeropoulos, I. (n.d.). Marketing Planning: Designing and Managing Integrated Marketing Channels (PPT) Chapter 11 - Designing and Managing Integrated Marketing Channels.pptx (sharepoint.com)