When to use it

• To evaluate different routes to market, and to decide how to combine them as effectively as possible.
• To help reinforce your chosen segmentation strategy.
• To avoid ‘channel conflict’, where two or more channels are offering the same product at different prices.

Origins

The notion that firms sell their products through different channels has been around for more than a hundred years. For example, the US bricks-and-mortar retailer, Sears, launched its first catalogue for direct selling to homes in 1894. As business supply chains became more professionally managed, the issue of how to manage multiple channels to market became increasingly important. For consumer products, the big challenge was how to sell directly to customers (for example, by phone or catalogue) without upsetting retailers or brokers. For industrial products, a range of different middlemen was often used (such as brokers, importers, licensees and aggregators) and there was often a risk of conflict between them.

The rise of the internet in the 1990s made channel management more complex than before, and led to the concept of multichannel marketing as a way of making the most of all the different channels to market, especially for consumer products.

What it is

Multichannel marketing is the means by which a company interacts with customers through different channels – websites, retail stores, mail-order catalogues, direct mail, email, mobile, etc. Implicit in this definition is the notion that these are two-way channels, with customers both receiving and providing information through them.

Channels are the various routes through which a product reaches the end-consumer. If the product is a physical one, it can be sold directly (such as Dell selling you a computer) or indirectly (such as HP selling you a computer via a retailer). If the product is a digital one, the number of channels is much larger – think, for example, about how many devices you can access the BBC News channel on.

Historically, different segments of consumers tended to use different channels, so most firms would worry particularly about how to sell their products through two or more channels without upsetting one or the other. For example, HP would have liked to sell its personal computers ‘direct’ to consumers using the Dell model in the 1990s, but they did not do so for fear of alienating their retailers.

Increasingly (and especially for digital products), consumers are using multiple channels and this is where multichannel marketing comes in. The challenge firms face is how to give consumers a choice about which channels to use and when. For example, if you buy a movie from the iStore, you want to be able to watch that movie on any number of different devices, not just the one you bought it on.

How to use it

There are some important guidelines to bear in mind when developing a multichannel marketing strategy:

• Consistency of message across channels: Customers increasingly interact with firms through a variety of channels prior to and after purchasing a product or service. When developing a marketing campaign, you have to consider all the different ways that customers can come into contact with your firm, and ensure your messages are consistent across these channels. Many firms have developed internal processes and technologies to support this approach.
• Consistency of experience across channels: You do not want a great sales experience to be destroyed by poor after-sales care. So, having established the type of customer experience you are seeking to provide, you need to ensure this is rolled out across the different channels. This includes small things such as how you address customers (for example, first name versus surname with title), as well as bigger things such as how much discretion your service representatives have to resolve problems.
• Pool customer knowledge in one place: Maintaining a single view of customer behaviour allows you to respond to customers in the most appropriate way. This might be done using a shared database of customer contact information and updating it in real time. Alternatively, it can be done through close collaboration across departments, or with key account managers.

Further reading

Bowersox, D.J. and Bixby Cooper, M. (1992) Strategic Marketing Channel Management. New York: McGraw-Hill.

Rangaswamy, A. and Van Bruggen, G.H. (2005) ‘Opportunities and challenges in multichannel marketing: Introduction to the special issue’, Journal of Interactive Marketing, 19(2): 5–11.

Stern, L.W. and El-Ansary, A. (1992) Marketing Channels, 4th edition. Englewood Cliffs, NJ: Prentice-Hall.