MARKETING CHANNEL MANAGEMENT

PSDA

Channel Strategy:

There has been an old saying- “If you built it, they will come”. Channel Strategy is all about finding
the best way to expose the services, products and brand identity to possible customers.

The organization in question, Parfum Fait Maison (PFM) is into B2B business as well as the B2C
business. In the Business-To-Business (B2B), PFM has multiple corporate tie-ups which further use
these products for corporate gifting. They have been using “direct” channel strategies to ramp up
the revenue.

On the other hand, in the Business-To-Consumer domain, PFM has been using channel partners
whose details have been undisclosed as per the company’s rules and regulations. They have been
using indirect channel strategies too for the same reason.

For Parfum Fait Maison, the customers themselves have become the best source of advertisement
for the brand as their feedback matters a lot. The whole business is running on “word-of-mouth” and
has grew quite well.

Multichannel Strategy:

As the time is advancing and so the consumer tastes and preferences, PFM has adapted the ongoing
changes in the business world. It has started using direct mails to all corporates for collaboration and
corporate gifting opportunities. As the festive season has started, Parfum Fait Maison has started
sending direct mails heavily to all corporates looking for corporate gifting opportunities.

Choosing to adopt the Multichannel Strategies, was a very good step by PFM. It has helped PFM
explore the consumer-base and find customers with untapped purchasing potential. The
multichannel strategies have helped PFM increase the engagement as the number of channels
increased and so the potential customer touch-points.

Talking of the B2C business, it has been entirely dependent on the “word-of-mouth marketing”.
Parfum Fait Maison never felt the need to aggressively advertise themselves using the offline and
the online tools. Like every organization DOES REQUIRE to advertise itself, the company has
sponsored multiple events and magazines.

Marketing Channels:

The marketing channels are the independent business organizations. They are also known as the
middlemen, intermediaries. There are various forms of intermediaries and they act as an interface
between the organisation and its customers. They facilitate the producers and ensure a smooth flow
of products/services to the customers.
10 most important functions of Marketing Channel are-

1. Middlemen have a role in providing information about the market to the manufacturer.
2. Maintaining price stability in the market.
3. Major function is Physical Distributions of the products.
4. Promoting the product.
5. Middlemen finance manufacturers’ operation by providing the necessary working capital in
the form of advance payments for goods and services.
6. Intermediaries help in maintaining the Demand & Supply
7. Standardizing transactions is another function of marketing channels.
8. Help in production function and leaving the marketing problem to middlemen.
9. Most crucial activity of the marketing channel members is to match the needs of buyers and
sellers.
10. Also, providing after sale services is another function of Marketing channels.

Channel Flow:

A marketing workflow is the graphical representation of all the work steps, that has been used to
express the channel mechanism is the concept of channel flow. These flows reflect many linkages
that hold channel members and other agencies together in the distribution of products. From the
perspective of the channel manager, there are five important flows.

 Product flow
 Negotiation flow
 Ownership flow
 Information flow
 Promotion flow

The product flow refers to the movement of the physical product from the manufacturer through all
the parties who take physical possession of the product until it reaches the ultimate consumer. The
negotiation flow encompasses the institutions that are associated with the actual exchange
processes. The ownership flow shows the movement of title through the channel. Information flow
identifies the individuals who participate in the flow of information either up or down the channel.
Finally, the promotion flow refers to the flow of persuasive communication in the form of
advertising, personal selling, sales promotion, and public relations.
Distribution Channel Levels:

Distribution channel levels means to transfer products which here is a perfume, from the
manufacturer to the end user through retailer and other necessary intermediaries. An intermediary
in the channel is called an agent/middleman. Channels normally vary from two-level channels
without intermediaries to five-level channels with three intermediaries. As per Philip Kotler, the
channel level decisions are among the most important and crucial decisions that management faces
and will directly affect every other marketing decision of the organisation. These decisions are set of
interdependent organizations (intermediaries) involved in the process of making a product/ service
available for use or consumption by the consumer or business. Some functions are:
  A Zero Level Channel:

A zero-level channel, commonly known as direct marketing channel has no intermediary levels. In

this channel framework manufacturer sells merchandise directly to customers.

 A One Level Channel:

A one level channel contains one selling intermediary. In consumer markets, this is usually a retailer. 

 A Two-Level Channel:

A two-level channel encompasses two intermediary levels – a wholesaler and a retailer. A wholesaler

typically buys and stores large quantities of merchandise from various manufacturers and then

breaks into the bulk deliveries to supply retailers with smaller quantities. 

 A Three Level Channel:

A third level channel, as the name implies, encompasses three intermediary levels – a wholesaler, a

retailer and a jobber. 

Talking about Parfum Fait Maison’s Distribution channel levels-

Parfum Fait Maison, a perfume manufacturer prefers to deal directly to the end-
users ie. the corporates hence there aren’t any intermediaries or middle-men.
PFM has preferred to have a smooth flow of products to the customers ie. the
corporates. The company did it to limit its advertising budget and reduce the
effort and cost.

As Parfum Fait Maison is majorly into the B2B business, PFM has been following
the direct-to-consumer model or the 0-Level channel approach to directly deal
with the customers ie. the corporates.

The distribution channel which can be referred to B2B, using this channel, PFM
has managed to control the price for the end-users- the corporate houses.

B2C channels – B2C channels as the name suggests Business to Consumer are the
distribution channels which includes the distribution of products/services from the
manufacturing company to the end customer. In this case, the customer is an individual and not a
business entity. 

So, to deal the B2C business, PFM has again used the “Direct-To-Consumer” model. As already
shared earlier, they’ve used the “Sponsoring” approach to promote the brand. They haven’t been
heavily using the traditional advertising tools to market their products.

The reason of choosing 0- level channel is that it helps to save more money, saves time, it seems
convenient and the distribution of products is faster. It also increases effectiveness and ease the
access to cover large customers.

Channel types:

Marketing Type of structures in marketing are how businesses reach customers. There are three
types of marketing channels: communication, distribution and service channels. Communication
channels deliver marketing messages to potential customers. Distribution channels are the delivery
method for products. Service channels aid companies in carrying out business transactions.

1. Communication- Communication channels present information to pools of potential

consumers known as the product’s target markets. Communication channels may carry a
company’s advertisements, other types of persuasive messages, and business
correspondence. Examples of communication channels include television, radio, magazines,
newspapers, billboards, webpages, direct mailers and email. Marketers structure
communication channels around the media choices of the target market. Say for PFM, the
attempt is to target tech-savvy working adults, so running Internet advertising campaign is
the best strategy of communicating to the large audience.

2. Distribution- Products reach customers through distribution channels. Distribution channels

include product displays and product delivery methods. Distribution channels also include
the customer point of purchase, such as retail stores, wholesalers and websites with sales
capabilities. Similar to communication channels, distribution channels are based on the
shopping preferences of the product’s target market. In PFM, the distribution channel is very
simple, which is direct channel- from producer to directly consumer.

3. Service- Transactions are facilitated through service channels. Types of service channels
include banks, warehouses, insurers and transportation companies. Unlike communications
and distribution channels, target market preferences on the choice of service channels by
the marketers. This is because most service channel action is invisible to consumers.
Marketers may change service channel structure to improve efficiency or to reduce costing.
But, there is no such service channels which are followed by PFM.