Join Drew Boyd for an in-depth discussion in this video Understanding distribution channels, part of Marketing Foundations.
Building distribution channels may be the most difficult of the four Ps, depending on your business. It's typically the most people-intensive aspect of your marketing effort, because you have to enlist lots of partners to move your products physically into the marketplace. A channel is a pathway that carries things, and it may involve many steps along the way. Three things move through it. First is your product. Typically your product flows from you, the manufacturer or reseller, through to the hands of the customer.
Occasionally, that product might move back the other way, in case the customer wants to return it. And you have to be set up for that. The other thing that moves through the channel is money. And it's not just money and credit cards, but also money-related parts of the transaction, which may include financing, negotiations, and perhaps contracting. You are your channel partners need to be skilled and available to do these things, again depending on your business.
There's one more thing that flows through the pathway. And in some respects, it may be the most important thing. That is, information. And it flows in both directions, from you to the customer, and vice versa. The information you send through the channel could be information about your product, your prices. Availability, or promotional messages about a new product. The channel, and all the partners in it play a vital role in communicating your value proposition.
In the other direction flows information about your customer. It might include demographic information, about who they are. Geographic information, about where they live. Perhaps feedback about your product, positive or negative. Earlier in the course, I spoke about segmentation. You could learn a lot of information about what's important to customers, and how they perceive your product versus the competition. Through this channel, you can learn vital information that would help you analyze your market to create your marketing strategy.
That's assuming that your partners along the way in the channel let you. Sometimes, they like to keep that information for themselves. They might see that customer as belonging to them, not you. If you want access to that wealth of data about your customers, you'll have to select your partners carefully, and strike the deal with them around collecting and sharing that information. And that's where managing channels get difficult. Conflict often arises in the channel, because the various partners have competing goals.
Your distributors, for example, may not like your pricing approach. So they might set the prices where they want them, and that price level might not be consistent with your value proposition. They may also be selling competitors' products. And you have to do a lot of convincing and nurturing to make sure your products get the right amount of attention. It takes a lot of work and energy to train and motivate your channel partners to do what's needed to put your strategy into motion. But if you do it right, you'll have a well oiled machine to put more great products into the marketplace, and earn new customers.
You'll also learn to address tactical challenges and present the plan to get buy-in throughout an organization, from the C-suite to the sales team, as well as use the marketing plan to guide outside agencies and vendors. Finally, you'll learn how to launch the campaign and measure its performance.
- Marketing in an organization
- Assembling the team
- Creating the marketing plan
- Analyzing your products, customers, and market
- Segmenting customers
- Creating a value proposition
- Developing a strategy
- Setting goals
- Setting prices
- Using social media
- Presenting your plan to leadership
- Budgeting your plan
- Measuring success