Marketing Channels
CASE: Electrical Bicycle
You are the marketing manager at Batavus Bicycle factory.
Batavus BV is a Dutch bicycle manufacturer. Batavus Intercycle Corporation was the leading manufacturer of bicycles and mopeds in the Netherlands during the 1970s. During its most productive years, the company’s 350,000 sq ft (33,000 m2). Heerenveen plant employed 700 to produce 70,000 Batavus mopeds and 250,000 bicycles a year. During this time, Batavus was exporting 55 percent of its production with the remainder going to the Netherlands.
Innovations
The company won the Good Industrial Design award for its Safety Handlebar, Quick Service chain guard, Safety Stander and Ergo System innovations.
The Batavus engineers developed two new e-bikes and top management asks you to take care of the communication, distribution and service strategy of them.
Competitors introduced similar bikes last year and are selling them successfully at the same price.
Removable battery
User can take the battery out of the bike and recharge at home.
Competition sells this bike-type at €1499 and your bike will have the same price.
Targetgroup: city dwellers who do not have a bicycle shed.
Fixed battery
To reduce price and to improve a more reliable connection the battery is fixed build-in. A wall socket must be nearby for charging.
Competition sells this bike-type at €799 and your bike will have the same price.
Targetgroup: villagers who have a bicycle shed.
- Is it advisable to sell both bikes through the same distribution outlets, like: bicycle stores, hardware stores, online webshops?
- Does the customer expect the service to be exactly the same for both models?
- Do you recommend promoting both models in the same magazines and websites side by side?
Which choices do you make and which arguments support your choices?
To reach a target market, the marketer uses three kinds of marketing channels.
- Communication Channels
- Distribution Channels
- Service Channels
Let’s have a look on each of them:
Communication Channels
Communication channels deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, smart phone, billboards, posters, and the Internet. Firms also communicate through the look of their retail stores and Web sites and other media, adding dialogue channels such as e-mail, blogs, text messages, and URLs to familiar monologue channels such as ads.
To get the most out of your communication investments, always make sure to use those communication channels where the target audience expects to find it.
Distribution Channels
Distribution channels help display, sell, or deliver the physical product or service(s) to the buyer or user. These channels may be direct via the Internet, mail, or mobile phone or telephone or indirect with distributors, wholesalers, retailers, and agents as intermediaries.
Each link in the distribution chain has a function. What happens if you remove a link from the chain? Which tasks are then no longer fulfilled?
- What is the added value of a wholesale?
- What is the added value of a retailer?
Service Channels
To carry out transactions with potential buyers, the marketer also uses service channels that include warehouses, transportation companies, banks, and insurance companies. Marketers clearly face a design challenge in choosing the best mix of communication, distribution, and service channels.
Resume: Marketing Channels
With the criteria found in the STP=stage (Segmentation, Targeting and Position) your next task is to select matching and value added channels for the Communication, Distribution and Service channels.
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