Place: Go-to-Market Channels

Our go-to-market channels, or simply channels in business model canvas language, are the place elements of our go-to-market plans. Channels include an integrated set of physical places, virtual spaces, and relationships with others. We design and manage this set of go-to-market channels as part of our business model and go-to-market planning to reach, connect, transact, and interact with our customers.

Go-to-market channels nearly always involve a set of external partners, each doing channel tasks that benefit customers and ourselves. So, in addition to creating value for our end customers, our channel designs and channel management must also create value for our partners. Channel partners must be compensated fairly for their efforts and investments to do these tasks on our behalf, or they may choose not to work with us.

Channels provide convenience benefits to the customer experience.

Recall that together, the product and place elements define the customer experience we aim to offer our customers as they search for, shop for, and use our products and services to solve a problem or achieve a goal.   The design of our go-to-market channels can add convenience benefits to that experience by reducing transaction costs– friction and perceived risks– for customers in their buying process.   For example, communicating through media channel partners can make it easier for customers to find and share information about our products and services in places where they already consume content.   Working with distribution partners like retail stores or platforms can make it easier for customers to shop for and take delivery of products and services as part of their existing shopping habits and routines. Working with financing partners like credit card providers can make it easier for customers to transact with us. And working with support partners with expertise on particular jobs-to-be-done can make it easier for customers to learn how to use our products and services,  incorporate them into their habits, routines, and processes, and address any issues that come up along the way.

Channel partners support critical channel tasks.

Channels support four critical tasks associated with going to market with our products and services.

1. Demand Generation: activities associated with promotion: interacting with current and potential customers to raise awareness and interest in our offers and converting that interest into decisions to exchange with our organization.
2. Demand Fulfillment: activities associated with making products and services available, completing exchanges, and delivering the value proposed in our offers.
3. User Support: activities to support customers in using our products and services after they have completed an active buying process.
4. Market Feedback: activities to learn from customers to improve and refine future offers.

The external organizations that we contract with to help accomplish these tasks are called our channel partners. Historically, marketers have distinguished between two broad sets of go-to-market channels through which we interact in customer markets:

• Distribution channels are the set of owned physical places, owned virtual spaces, and partners through which we make our products and services available for sale, complete exchanges with customers, and deliver our products and services to them. This set is often primarily focused on demand fulfillment tasks.
• Media channels are the set of communications methods, platforms, and partners through which we aim to reach, interact with, and influence customers. They are used to share information that helps customers progress through their buying processes and make successful use of our products and services. These channels tend to be focused on the other three critical channel tasks.

While we have historically considered these two channels separately– and there are often different parts of an organization that focus on the complexities of each one — these two channels are often tightly integrated, particularly in digital markets.   For example, Amazon is both a distribution and media channel partner for many organizations.

Go-to-market channel strategy involves both effective channel design and effective channel management.

Channel Design

Channel design decisions determine how the four sets of channel tasks above are distributed among the organization and its external channel partners. Organizations routinely use multiple partners to accomplish the four sets of tasks above. Selecting the best partners, coordinating among them and reducing avoidable channel conflict are vital goals in channel design.

Read this additional content on common channel design structures from an online undergraduate marketing textbook.

Channel Management

Channel management is the ongoing work of maintaining relationships with all of the parties involved in accomplishing our channel tasks, adjusting designs as markets evolve, managing the predictable and unpredictable conflicts that arise as a result, and ensuring that we, our customers, and all parties in between receive a fair return for the value created through effectively completing channel tasks.

Go-to-Market Channels vs Supply Chains

• Read this additional content on the commonalities and distinctive elements of go-to-market channels vs Supply Chains
  

  Guiding Questions

  • What are the four tasks
  • Can you define the channel partners in four typical marketing channel structures?
  • The text lists Etsy as an example of a “direct” channel. Etsy charges a variety of fees to sellers who use its plaform. What channel tasks (from the HBS reading) is Etsy doing for the seller that support these charges?
  • What’s the relationship between marketing channels and supply chains? What is different about them?