An important step in determining if channel marketing is beneficial is to assess if it better meets the desires of the target market. Channel marketing proves to be a “fit” if the process better responds to the desires of the target market than the organization could do alone. An organization must answer the question, “Will our customers or clients be better served by channel members rather than having us performs these functions?”
• Lot size
How many “units” does the end user want per transaction? A household may purchase one personal computer per transaction. The customer service department of Eddie Bauer may purchase 20 personal computers at a time. Channel members may have systems designed to address the needs of both.
• Waiting time
The speed of providing faster service may be magnified through the systems that channel members offer.
• Location
Getting the product in the right place and time is important. Arranging for “authorized dealerships” throughout a wide geographic area allows products to be conveniently and affordably accessible to customers.
• Product variety
The ability to purchase other products from a retail store may enhance the sales and/or margins of all products offered by attracting customers who appreciate the variety of products.
• Service support
Channel members may be better equipped to offer add-on services. This may include advertising, credit, delivery, installation, and repair to enhance the overall value provided to the customer.
The other step is to select intermediaries that complement the product or service. These channel members should have the goal of offering attractive attributes to the end user. Channel members also need to be motivated to continue to provide value. Motivation typically exists in the form of profitability through stimulating sales. The overall goal is to build long-term and supportive relationships among channel members that are successful for all involved.
An organization that markets directly to their end users to sell their products or services is benefiting from direct marketing. Based on the characteristics and resources of the organization and their target markets, direct marketing may be an attractive approach to generate revenue. Direct marketing occurs when the “producer” connects with the end user. The end user may be a consumer or a business. Direct marketing applies to product and service-oriented businesses, and to nonprofit organizations. In all situations, there is no intermediary involved. Direct marketing describes this interactive communication with the end user. Direct marketing is not synonymous with mass marketing. The most effective direct marketing takes place when there is a clear connection to reach the target market.