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Success Strategies in Channel Management

New and Different Channel Forms and Trends

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Changing Models and Demands of Distribution

Channels

Channel Roles and the Marketing Mix

Changes

More Movement Towards Indirect

Channels

Synthetic Channels of Distribution

Relationships and the Interaction

Process

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Changing Models and Demands of Distribution Channels

The standards for achieving customer satisfaction have clearly changed.

Examples of the importance of exchange utility are virtually endless.

Take, for example, the notion of time utility. Many consumers have come to expect one-hour service on everything from film processing to prescription eyeglasses.

Time utility applies to each link in the marketing channel. Emergent information technologies have changed the rules by which fast-service is judged. From just-in-time manufacturing to quick-response retailing, time-saving tools for managing the flows of goods and services have become expected in marketing channels.

Marketing channel environments today are marked by a nearly borderless world.

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Channel Roles and the Marketing Mix

Marketing channels will be a particularly important agent for change in the marketplace. The future introduction of new distribution channels and new channel designs will undoubtedly promote changes in business practices and alter consumer lifestyles throughout the world.

For instance, these changes are likely to transform current modes of thinking about customer satisfaction.

Customer satisfaction in the future will be measured long after the initial sale.

Environmental changes are also contributing to situations in which products and services once limited to regional distribution are now readily accessible in seemingly improbable markets.

Will the widespread availability of (traditional) products in new and unusual markets frustrate marketing channel members' efforts to forge differential advantages in future marketplaces?

Hardly, but the nature of competitive advantages themselves are likely to change..

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Three techniques are likely to dominate the means by which channel managers carve out differential advantages in the future:

Value-Added Packages. Future channel members will be able to gamer a competitive edge (and new market share) if and only if they provide unprecedented value to their customers.

Channel Specialization. As the demands of markets grow more complex, channel members will have to become more specialized. This specialization will be customer-driven, rather than product-oriented. Channel members of the future will likely focus their attention on specially identified market segments. These channel members are also likely to seek out linkages with exchange partners that offer competencies similar to their own in other, select market segments.

Channel Extramediary Roles.

Another major transitional movement in marketing channels will involve the emergence of the extramediary as a dominant channel role.

This new role underscores the growing trend toward outsourcing.

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Growth of Extramediaries

Extramediaries enjoy the capacity to enhance exchange relationships by filling value gaps.

We can expect the decline of traditional channel roles (i.e., merchants, wholesalers, and brokers). Many traditional channel roles will be replaced by highly specialized extramediaries.

Reassurance and Social Responsibility

Consumers faced with less control (globalisation/internet), will seek greater reassurance via credibility building factors (Social responsibility/triple bottom lines etc.) and this protection will be backed by global government pressure

Movements aimed at protecting the environment itself will likely be the most powerful impetus for change in channels environments.

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What other changes lie just over the environmental horizon?

More recycling of resources – eg virtually all shipping containers will be reusable,

New intermediaries will emerge for the sole purpose of facilitating convenient and cost-effective waste recovery, and

Consumers will be required, by law, to recycle packaging and certain products.

"Significant new sets of trade regulations in the global market-place. These changes will favour the biggest players in world trade and expand power gaps between developed and developing nations."

Increased deregulation in the distribution and transport of goods within and between countries.

Technological advances themselves will exercise notable effects on future channel relationships.

Increased coordination and cooperation and less conflict among channel partners.

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Changes

Similar prescriptions for building long-lasting channel relationships are almost certain to continue in the new millennium. In the future, marketing channel members are likely to pursue non-traditional conflict resolution strategies.

The development of successful internal channel environments in the future will likely pivot on the issue of whether exchange partners featuring complimentary strengths can find one another. More vicarious learning will foster international cooperation among exchange partners. -

"Quality is not a manufacturing principle—it is a process that involves each and every channel member."

Self-service, or the provision for customers to handle and select merchandise themselves in a retail channel without supervision, is a major channel innovation of the twentieth century.

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More Movement Towards Indirect Channels

One of the most fundamental structural shifts that we believe will alter the face of many markets in the future is the progressive introduction of electronic commerce.

More "category killers" which will devastate previously stable sectors.

The introduction of electronic commerce in more industries decreasing the need for large back-room processing operations, e.g. travel industry, consumer banking, other financial services such as insurance, etc.

the expansion of electronic commerce for business-to-business and business-to-consumer sales.

More call-centres.

The diversification of retailing channels.

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Synthetic Channels of Distribution

Also termed hybrid or fulfilment channel, the synthetic channel of distribution calls for the manufacturer to literally farm out different channel tasks to different companies and organizations that specialize in performing various channel business functions.

It is harder to control performance and reputation when channel tasks are divided among different companies. And managing a channel takes up a great deal of your time.

Delegate those activities that your organisation cannot easily or profitably perform.

Locate and employ sales "guns for hire"—a direct or indirect sales force that closes sales for you.

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Relationships and the Interaction Process

The future of marketing channels lies in long-term, ongoing and flexible relationships." In future channel settings interaction processes will be increasingly open and will feature a multilayered sharing of information and resources.

Several other projections pertaining to interaction processes within marketing channel settings:

Network Development. Increasing numbers of complex networks will develop between channel members. Channel members will literally connect with one another in an expanding number of ways in the next decade.

Standard Information Formats. A movement toward standardized formats will expedite goods, service, and information flows. Obstacles and bottlenecks in channels of distribution will thus be reduced.

Increased Interdependency. The continued emergence of strategic alliances and channel networks will serve as a catalyst for additional structural changes in marketing channels. In particular, channel designs should become shorter.