The Great Business

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Competitive companies can no longer afford to let marketing channels become stagnant over the lifetime of their product. Just as it is important to revisit and reinvent sales and marketing strategies in general over time, channel marketing support structures and services must be rebuilt to accommodate changing conditions. For example, if a company’s product line is maturing and few new products are being introduced, or if margins are not optimal, manufacturers with higher-margin requirement models will need to make fundamental changes in order to remain competitive. These may include restructuring distributor channels, revamping reseller channels, or finding new, higher-margin products to sell.

One type of business that may not be flexible enough with channel support is the wholesaler group. These businesses typically stay in the middle between OEMs and their channel and other partners, neglecting reinvention of strategies and keeping outdated structures around too long. Successful wholesalers realize that reorganization to shed costs is necessary, and actively offer more services to downstream channel partners and increase demand creation for manufacturers. But this strategic process is also taking place in the computer industry, health care, the life sciences, and food industries.

In addition, while the current economy is characterized by threats and disconnects in the business world, staying on top by maintaining flexibility is paramount. Mergers and acquisitions have forced altering expenditures and focus across channels, and new requirements and life-cycle stages call for new marketing infrastructures. Also, conversion from fixed to variable costs and the creation of flexible organizational designs characterize those businesses able to roll with the economic punches.

But successful businesses also know that a flexible approach to channeling requires its own management process. Channel strategy changes affect the entire organization in various ways. Especially in the high-tech marketplace, volatility and global scope make efficiency hard to achieve-but efficiency in channels is just as important as effectiveness in reaching target customers. Large, globally-scoped companies must conquer the following challenges:

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