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Guangzhou Lan’ao Information (Lan’ao Group): Implementation of channel management strategies

2020-07-30 View Original

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The strategic implementation of channel management is complex and involves many considerations, but once the relevant methods are understood, it becomes possible to carry out effective management following a clear approach. The factors influencing the choice of distribution channels are highly complex, including market factors, competitive factors, intermediary factors, corporate factors, and environmental factors. When selecting these channels, it is necessary to analyze all factors in order to identify the best one. Generally, the strategies for selecting distribution channels include the following: ; 1. Direct and indirect channel strategies: The direct channel is easy to understand – there are no intermediaries, and the products are supplied directly to consumers or users. An indirect channel involves using intermediaries to sell the products. There is a significant difference between the two, and most companies adopt a combination of both, having both direct and indirect channels. 2. Long-channel and short-channel strategies: In indirect channels, when there are two or more distributors or agents in the intermediary stage, it is referred to as a long channel, such as manufacturer → distributor → agent → retailer → consumer. A short-channel approach means selling to consumers very quickly, with just one intermediary involved. 3. Broad-channel and narrow-channel strategies: A broad-channel strategy refers to a manufacturing company having multiple intermediaries at the same level to sell its products ; A narrow channel refers to a situation where a manufacturer, within a certain period of time and in a specific area, chooses only one intermediary distributor to sell its products. 4. Multi-channel distribution strategy: For companies that supply production materials, since orders are placed in large quantities, with long intervals between purchases and large order sizes, it is more appropriate to establish direct and short channels ; For companies that supply daily necessities, due to factors such as a large number of buyers, short intervals between purchases, and a dispersed customer base, it is appropriate to adopt an indirect channel strategy that is relatively longer and broader in scope. Of course, as marketing theory evolves and new technologies are developed, various conventional patterns are disrupted, and companies should strive to choose their channel strategies based on their actual circumstances and the changes in the market. The ultimate goal of channel transformation is to \"reduce costs and improve efficiency\", which can be achieved by reducing the number of distribution steps, carrying out centralized purchasing and distribution, consolidating product shipments, and accelerating the turnover of inventory and capital.

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