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Channels to market 13 September, 2006

Posted by varoom in Marketing Plans.
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An important part of any business is the channel through which your product is delivered to market. This “sales channel” has to add some value for you, if not, why have them work for you? Every channel has its costs, in commissions, in investment from you in training, in promotional terms (you have to promote them as your channel) and in effort you have to take in order to work with them.

Your sales channel must identify and service your customers, taking orders, providing basic support, interfacing with the customers and generally delivering sales of your product. As far as your business is concerned it’s easier to deal with a single company than directly to the end market. This means that you can handle many more sales channels who in turn service a larger number of end customers than you could or would want to support.

When customers of your sales channels become very large and the costs of bringing them through your sales channel becomes significant then you can take them direct and accept the increased cost in your company of servicing them as you save channel costs.

Quite often the sales channels expect you to create the end market demand that they service. What this means to you is any promotion you do, advertising, mailshots, internet promotions, press activities all must specify your preferred sales channels or contact a central service which allocates the leads to the most appropriate channel.

Some sales channels have a customer base and a market image which cam be of use to your business, your product benefiting from placement with a leading distributor.

When developing your business plan you need to take account of the market channels and assess if the normal routes to this market suit your product and if you want to fall in line with the norm or take a new route.

The costs of sales need to be accounted for in your business model, do your margins allow for commission, what will the cost of handling each customer sale be and how can you service the customers?

Varoom

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