Channel Selection Strategies Flashcards
Type of Customer
B2C Customers or B2B Customers
B2C Customer (Likely to use INDIRECT channels)
- Willing to visit retail stores for daily-use products (e.g., toilet paper)
- May prefer online channels for convenience or specialized goods
- Buys small quantities
- Small financial investment
- Requires less direct contact
B2B Customer (Likely to use DIRECT channels)
- Buys in bulk
- Customized delivery and payment terms
- Large financial investment
- Requires direct engagement with sales representatives for high-value or specialized products
Type of Product
Based on Perishability, Value and Fragility, Customization
Perishable Goods - require shorter channels for fast delivery (direct to consumer or retailer)
Non-Perishable Goods - can afford longer, more complex channels
Value and Fragility - high-value or delicate products often use direct channels to reduce handling and maintain control
Customization - products that are typically sold directly to maintain alignment with customer specifications
What channel do products that are durable, unbreakable, or not valuable use?
Most likely to use INDIRECT channels
What channel do products that are perishable, breakable, or highly valuable use?
Most likely to use DIRECT channels
Channel Partner Capabilities
Direct Delivery, Use of Intermediaries, Control
Direct Delivery
Businesses with robust infrastructure or a digital product often sell directly to customers
Use of Intermediaries
Intermediaries (agents, distributors) can help in retail expansion by negotiating with corporate buyers
Control
Opening exclusive retail outlets to better manage customer experiences and brand identity
Business Environment and Technology
Economic Factors and Technological Advances
Economic Factors
Exchange rate fluctuations can influence sourcing and channel partner choices
- preferring national channels when the local currency is low (national channels)
- preferring international channels when the local currency is high (international channels)
Technological Advances
- The Internet provides businesses greater control over pricing, promotion, and customer interactions
- Digital footprints from online sales enable better targeting and personalized recommendations
- ex. companies track consumer behaviour on their websites to inform marketing strategies
Competing Products’ Marketing Channels
Imitating Competitors, Innovative Channels
Imitating Competitors
companies may follow competitors’ channel strategies to meet consumer expectations
