Many companies are seeking alternatives to the traditional selling Systems because of the rapidly increasing competition. It has become difficult for companies to endure the profit margins and meet out the changing consumers’ preferences. In the past scenario, companies use to rely on direct selling or the distributors. But, now various methods of selling have been developed like direct mail, retailing, internet selling, telemarketing, etc. When companies use large number of marketing channels simultaneously. then it is known as hybrid channel Systems or multichannel marketing Systems. The first and foremost company to use multichannel marketing systems was IBM. This company employed almost 18 channels to sell its wide range of computers like catalogue selling, telemarketing, value-added resellers, etc. These marketing channels have been envolved to aid big companies in increasing their market coverage, sales volume and distribution costs. This acts as a major part of company’s total expenses constitute sales and distribution cost. The process of designing hybrid channel systems involves identification of channel characteristics, determining the channel mix properties and selecting the total number of channels required for attaining the desired results. To successfully manage the hybrid channel Systems, the manager must be competent enough to identify the source of conflict in the channel, evaluate its intensity, observe the reactions of customers’ and channel members and examine the time duration involved to resolve the conflict. To avoid any kind of overlapping of activities and wastage of resources, companies use modern information systems.
Advantages of Multichannel Marketing
The advantages of Multichannel Marketing are:
- Increase in Market Coverage: The companies can enter the untouched market segments.
- Lower Channel Cost: In certain conditions, it helps to improve the cost of channel.
- More Customised Selling: The companies can revise their distribution pattern as per requirements of the customers.
Disadvantages of Multichannel Marketing
Some of the disadvantages related to Multichannel Marketing are as follows:
- More Channel Conflict: Different channels serving the same customer segment can create dissatisfaction and uncertainty among them.
- Problem in Controlling Various Channels: Managing multiple channels becomes a complex task for the controlling company.
- Degree of Freedom: Companies may face several difficulties in case if the channel members misuse the freedom given to them.
- Non-cooperation among the Different Channels: The channel members may not cooperate with each other and also cause conflict among them, in order to achieve their own individual goals.