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What Is Channel Marketing ?

Posted by Anonymous on 50 Points
Hi, Can someone please tell me their definition for "Channel Marketing ?"

I have read a number of different "theoretical" articles, but would like to know what Channel Marketing is relative to people with real life experience

Thanks
D

  • Posted on Accepted
    Hi D

    Channels exist to link and serve customers/consumers. It's purpose is similar to brands to build superior customer value very efficiently for above average profits.

    Channels vary in complexity and efficiency. e.g. The channel for electricity is simple and almost ideal - producer has mass distribution and the consumer has instant availability-flick of the switch, literally.

    Channels reach backwards to raw materials and forwards to consumers. Companies have a choice to hand each stage themselves or outsource it. Channels are necessary because mostly the producer of a product is usually a long distance from a consumer and because skills differ through channel type.

    E.g. Sports shoe brand maybe produced in the Far East but deliver to wholesales and retailers for sales to consumers in the West.

    Channels can also help brands differentiate e.g. Dell online, mass market brands like Coca Cola need maximum availability compared to restricted or selective channles for luxury brands like Chanel/Armani.

    The super power of Retailers (and their own brands) has also increased competition for brands and influences consumers because of mainly availability, pricing, selection, location and service.

    Consequently, strong brands (Nike, Micorsoft, Apple etc) tend to have above industry margins compared to weaker ones even though they have to market through strong and ever increasing channels.

    This topic is huge but I hope this helps.

    Zahid Adil

    BTW: Here is an excellent book on the subject:

    Channel Advantage: Using Multiple Sal




  • Posted by bobhogg on Accepted
    derekt...

    Zahid has given you a good introduction to the subject...

    ...but let me expand on his first example of electricity.

    He's right in saying that the channel for physical distribution of electricity is simple. However, here in the UK at least, there is now a free market for utilities such as electricity and I can choose to buy my electricity from a number of competing suppliers. So while I can turn on my electricity at the flick of a switch, to "buy" it I need to sign a contract with my chosen supplier. The utility companies therfore need to find channels through which they can offer those contracts. This has resulted in the UK in the establishment of websites such as www.uswitch.com which offers comparisons between different utility suppliers and the ability to "sign-up" for services online. Such sites are therefore a "channel" for the utility companies just as important as the physical "channel" of the cables that distribute the electricity.

    Hope this helps.

    Good luck,
    Bob
  • Posted on Member
    Someone please respond to this as I also am in desperate search of what Channel Marketing is. Please help!
  • Posted on Member
    To answer the final two questions, Channel Marketing is marketing to your channels. This will involve a number of activities including
    1) Creating channel propositions
    Why should new channel partners work with you
    2) Marketing those propositions
    Finding and signing up new partners
    3) Engaging, educating, motivating your channels
    Getting your channels up to speed to be most effective. Keeping them motivated and engaged. Listening to feedback from them - what they need and what their customers need. Keeping out your competitors or positioning you best if you have competitors who already sell via same or similar channel partners.

    As you can tell - Part 3 is the biggest part of the role.
  • Posted on Member
    So, Channel Marketing is marketing to your channels. I'm not sure that this answers the question!

    Does anyone have a good definition of what channel marketing is or is it really just an ethereal concept as derekt suggested in his original question?

    Are we not just talking about developing the route to market? Is this an old concept being spun (marketed!) as something new?

    I'm confused!!
  • Posted by Bruce.Olsen on Member
    As a channel marketer you aren't "marketing to your channels". You are understanding which channels are appropriate for your product, locating one or more partners for each of these channels, and preparing the channel partner's staff members to sell your product on your behalf (after selling the channel partner onthe idea, of course).

    In B2B software, channel marketing often attempts to engage systems integrators or other software companies so as to help sell software. As a channel marketer, you might work with an SI to develop a "solution" consisting of your product and the SI's services (say, to install and use the product at a customer site). Another software company might have a product complementary to yours, enabling you to develop a bundle with special pricing for the two when sold as a package. Exactly which channels are appropriate depends on the product, of course; Best Buy doesn't sell commercial-grade database software.

    So to continue the B2B example, you would need to know how to locate a prospective channel partner (an SI, or another company), figure out how they would benefit from working with you, and sell them on the concept. You will probably need to create special sales training for the partner's staff members, as well as special collateral, ad campaigns, microsites, etc. You may also have to worry about how to register a deal (i.e., who found this customer--you or me?) and handle many other logistical issues raised by the working relationship between the two organizations. That's the essence of "channel" marketing (often called "solution marketing" in B2B software).

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