Multi-channel strategy in business-to-business markets: Prospects and problems Bert Rosenbloom ⁎
LeBow College of Business, Drexel University, Philadelphia, Pennsylvania, USA Available online 28 July 2006
Abstract Multi-channel marketing strategy has become a major force in business-to-business distribution channels, especially since the option of Internet-based online channels emerged less than a decade ago. Making products and services available to business markets via a wide array of different channels can provide increased levels of customer choice and service. But the task of coordinating and integrating multiple channels that operate at high levels of efficiency has forced managers responsible for channel management to deal with a variety of challenging issues. These include the role of e-commerce in the multi-channel structure, finding an optimal channel mix, creating synergies across channels, building strategic alliances, creating sustainable competitive advantages, managing more complex supply chains, dealing with conflict, and providing the leadership necessary to attain well integrated multiple channels. © 2006 Elsevier Inc. All rights reserved. Keywords: Multi-channel strategy; Channel management; Integrated multiple channels; Multiple channels; Channel coordination
Moving past the first half decade of the twenty-first century, it has become obvious that such forces as Internet-based Ecommerce, globalization, and intense international competition have made marketing channel management much more challenging and complicated than it was just a few short years ago (Narus & Anderson, 1996). Businesses all over the world now have many more choices in the channels they can use to reach their customers (Rangaswamy & Van Bruggen, 2005). In fact, numerous companies in the business-to-business sector already use multiple channels to go to market with their products and services (Cespedes & Corey, 1990). The company's own field sales force channel, the distributor channel, the sales rep channel, the catalog/mail order channel, the online channel, the call center channel, and several other may all be needed by the same company to serve its customers effectively and efficiently (Friedman & Furey, 1999). But such a wide range of channel choice and combination potential means that businesses also face the challenge of formulating strategies to achieve an optimal channel mix while avoiding conflict among the different channels being used
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(Rosenbloom, 2004). So, the overriding question becomes: How do firms utilize multiple channels, including new hightech E-commerce channels, to foster channel confluence and synergy rather than conflict? Other important and related questions include: Will virtually all firms regardless of size and products sold face the challenge of developing well-integrated multiple channels? Or will a multi-channel strategy need to be pursued only by those firms that deal with diverse customer segments that seek maximum choice in how, when, and where they purchase products and services? The multi-channel challenge may also involve cost/benefit tradeoffs (Frazier, 1999). Does offering customers maximum convenience via a wide variety of channel choices necessarily raise the cost of distribution? Or, is it feasible to design multiple channel structures that actually reduce the overall cost of distribution by segmenting the firm's customer base in such a way that each customer segment is served by the most cost effective channel? Thus, large volume customers get called on regularly by the field sales force channel while small customers have access only to call center channels. Customers in the intermediate range are served mainly by the independent distributor...