Channel Strategy


N's spirit Basic MBA > Channel Strategy

Channel Strategy

Sales channel needs longer time to be built up and is not changeable once it is built up so it should be carefully considered when it is built up. In addition, sales channel has a factor related to human so it is sometimes uncontrollable and manageable by logic or theory.

On the contrary, it means strong sales channel contributes to expanding sales and market share. In fact, many companies with strong sales channel has large share in the market.


Functions of sales channel

Sales channel has functions that are trade, logistics and information exchange. When channel strategy is considered, it is needed which channel take care of which function.


Range of sales channel

There are mainly three sales channel policies by width of it.

Intensive distribution
Intensive distribution is that a company distributes its products through wide range of sales channel without limitation. Advantage of this policy is that the company can expand its market share. However, disadvantage of this is that channel often becomes uncontrollable and sales management often becomes complicated.

Selective distribution
Selective distribution is that a company selects sales channel by sales power, degree of cooperation and financial power. Advantage of this policy is that sales channel is more controllable but the speed of expansion becomes relatively slow.

Exclusive distribution
Exclusive distribution is that a company gives specific channel exclusive right to sell its product. Advantage of this policy is that sales channel is most controllable and manageable but the cost to maintain sales channel becomes high.


Typical step to establish sales channel

1. Decide length of channel
2. Decide width of channel
3. Choose sales territory
4. Choose specific dealers
5. Motivate dealers to sell strongly


Importance of sales channel for new business

As mentioned, building up sales channel is difficult and needs long time. Therefore, when a company considers new business, it should consider not only market potential but also how to build up sales channel easily. It sometimes would have to focus on channel establishment rather than pursue market potential.


Advertisement




<< >>
Marketing
Marketing Process
Segmentation
Positioning
Marketing Mix (4P)
Product Strategy
Pricing Strategy 1
Pricing Strategy 2
Pricing Strategy 3
Pricing Strategy 4
Price Strategy for Service
Innovation of Pricing Model
Channel Strategy
Promotion Strategy
Prevention of Competitor's Imitation
Brand Strategy
B2B Marketing 1
B2B Marketing 2
Estimation of Market Size
Estimation of Market Size (ATAR model)
Estimation of Market Size (Logistic curve)
Estimation of Market Size(BASS model)
Stage Gate System


Advertisement






N's spirit Basic MBA > Channel Strategy

Copyright (c) N's spirit. since 2004 All rights reserved.