Upon completion of the course, students will be able to:
- Examine how the choice of marketing strategy affects channel choice
- Explain channel marketing strategies used to appeal to consumers
- Identify major channel options for companies
Module Reading and Resources
Presentation: Marketing Concept Glossary IV
Module-related marketing concepts and terms are presented. Visit the glossary for a quick review of the key terms from this week. You can also look up words in the glossary found along the left-hand navigation bar.
Video: Pet Supply Shop Channels
This video is a supplement to the module overview and illustrates market channel concepts using the pet supply store. Transcript available here.
Companies have many different channels, or distribution options, to sell and promote their products and services. One of the key decisions a company needs to make is where its goods will be available for sale. This decision will inform channel marketing and distribution strategies. There are three overarching elements that a company uses to make the decision as to where to sell its products. The first is determined by the product price. Companies set prices based on the costs to make and distribute the product or goods and the percentage of profit the company chooses to make on that good. For example, an article on profit margins reports that iPhones have close to a 50% profit, Nike’s products yield about 43% profit, and 40% of every McDonald’s cheeseburger is profit (Sherman, 2013). The second element of consideration is the amount of sales support the product will need. For example, if the product is something like salad dressing purchased from the supermarket, it is considered to be self-service, whereas if the product is something more complex or the consumer needs additional information to use it, such as a car or a Mary Kay cosmetic product, then the product requires a sales force. Finally, a company needs to review who the consumers are in the target market(s) for its product and make decisions about where and how consumers in this target market prefer to shop. The company then aligns its marketing choices with those consumer preferences.
Companies can choose to sell their products through a variety of channels including retail, wholesale, e-commerce (online sales via the internet), and m-commerce, that is, commerce using hand-held wireless devices such as smartphones and tablets. Retail sales include in-store locations and direct marketing. Direct marketing includes door-to-door sales, direct mail, and catalog marketing.
Once a company has identified the channel(s) through which a product will be sold, it needs to make decisions about the market channel to promote the product. For example, for an item that will be sold in a retail store, the company needs to consider packaging and in-store signage. It also needs to understand the characteristics of the retailers selling their goods to identify opportunities for preferred product placement and possible situations for sales promotions or coupon or discount use.
The video Pet Supply Shop Channels will cover the marketing channel strategies that the pet supply store is considering as it rolls out the new product. It will provide additional details about how companies make these decisions.
Complete the assignment as follows:
Using the product you chose for your discussion, analyze in detail how the product is sold through different channels. Although all products may not sell through all channels, ensure that you consider in-store, direct mail, email, social media, word of mouth, and online marketing channels for the product.
Using the Marketing Channel Analysis PowerPoint Template provided for this assignment, create a short presentation that demonstrates the use of these channels for this product by the company. Your first slide should describe the company’s marketing strategy. You should have one slide for each marketing channel discussed. A minimum of three channels should be discussed.
To complete this assignment, review the Marketing Channels Analysis Template and the Marketing Channel Analysis Presentation Guidelines and Rubric document.