Decide Your Channels To Market
Channels to market are all about how you can get your value proposition to your customers.
There are generally two options that you can go with:
Do it yourself;
Outsource it to another company.
If you do it yourself (go directly), it allows you to maintain higher margins, whereas outsourcing (go indirectly) e.g through partner networks, generally decreases your margins.
When you first start with your own company, often you want to keep margins to yourself meaning you want to have your own sales team, to start talking to people yourself, and really own the whole channel that you deliver to your customers.
However, what you need to take into account, is the reach that partner networks and indirect channels can give you. Whether that's through referrals, wholesalers, distributors, or through somebody else's website. It’s really important to understand what channels your customers usually shop with and matching your channel to that.
Let's have a look at two fashion products as examples. One with an indirect channel, one with a more direct channel. Both products have different customers, different segments, and have chosen their channels based on their customer segments.
The first example is the brand, Louis Vuitton.
Louis Vuitton is a high-end fashion retailer that focuses on high-value products. Often you spend thousands of dollars on their handbags, shoes, t-shirts, jeans, and other products. In order for Louis Vuitton to charge that kind of money, they need to offer a high quality of service to their customers. To do this they have their own retail stores around, which they staff, outfit, and can control every point of contact with their customers. This allows for a high-quality service that they can control and they maintain.
On the other side, using an indirect approach, you have Nike.
It’s still a great brand, however, they often don’t manage their own channels to market. They have a segmented market and have sports shops like Stirling Sports, Rebel Sports, and other retailers on-selling their products.