Introduction
The use of different pathways to deliver products to customers is a tactic prevalent in marketing and business, which makes accessing a more varied client base possible. This has become a normalized practice not only due to companies producing a wider array of products but also because of changing buyer trends, with Internet use being simply one of the most apparent changes. The rise in the adoption of hybrid distribution strategies and, thus, an increase in channel conflicts, makes acute the reevaluation of the benefits and challenges such tactics present.
What is Hybrid Distribution Strategy?
To adequately appraise the advantages and setbacks of hybrid distribution, one must first understand the process and meaning behind it. The article by Webb and Hogan defines the process as “a multi-channel arrangement in which distribution tasks are performed by a combination of distinct channels” (339). The essence behind the system is thus presented as an effort to revamp the way the target customer gains access to the product or knowledge of it. Therefore, one can define the hybrid distribution strategy as a method that allows the allocation of company resources with the goal of achieving diversified access of product to the buyer through different mediums in place.
Hybrid Distribution as Used by Modern Firms
Contemporary firms are more often faced with the undeniable need to provide multi-channel access to their goods and services, primarily due to the widespread use of the Internet. A mélange of online and offline methods of marketing helps not only to enlarge the already existing customer base but also access a wider range of clients of different ages and social backgrounds (Webb and Hogan 2002). Billboards and in-print advertisements, as opposed to the online contextual commercials, which base themselves on recent searches, help contact different groups of customers with different needs.
Apart from the Internet, companies also benefit from specializing in the marketing of different types of products. An example of this would be the use of telemarketing, which is a channel that is less suited to selling products that the customer would prefer to buy in person, as opposed to substitutable services. Customizing the presentation of each type of commodity helps demonstrate not only an attentive customer service approach but also a more profound knowledge of the merchandise.
Thus, businesses are brought before a plethora of channels of distribution that differ only in the number of steps it takes for the product to travel along the chain from the company to the consumer. The three types of channels are thus ones where the product goes through either the wholesaler, the retailer, both of them or neither, on its way to the consumer. Hence, hybrid distribution permits companies to customize not only their product advertisement and discern the target audience but also to anticipate the most beneficial stage of selling.
Benefits and Challenges
The most obvious advantage of effectively delivering commodities through different channels is the increase in company revenue through a more profound knowledge of the target audience, due to a closer study of market goals. Additionally, the multi-channel system allows promoting commodities through one carrier and purchasing by way of another, for example, advertising through a billboard (offline) but permitting the customer to order over the Internet.
Accessibility of the firm thus becomes an excellent advantage, granting customers the right to choose a method of purchase more convenient to them individually and thus demonstrating the company in a competitively advantageous light.
The biggest obstacle in implementing hybrid distribution is the handling and reallocation of company resources, which is, in general, one of the most prevalent issues in economics. Possible conflict between different channels rises from limited or inappropriate resource allotment, which in turn could prove confusing to clients and thus detrimental to customer satisfaction and company profits.
The creation of a struggle between different channels inside the same company relies on two factors: domain coincidence and goal discordance (Webb and Hogan 2002). If the former concept implies competition for resources internally or externally, the latter is installed when the set objectives of one channel can only be achieved at the expense of another. The establishment of such a situation of internal conflict and the longevity of its buildup makes it harder to eliminate the adverse effects of that, which is effectively a managerial blunder.
However, the overcoming of the challenges posed above through resource allocation and effective management demonstrates the readiness of a firm to participate and compete in the modern market. Through questions, attempting to clarify the target audience of a channel, their sales goals, and their tasks, issues within the company can be overcome. The correct application of managerial skills to surmount the two main topics: goal incompatibility and the similarity of areas of expertise of multi-channel systems, creates active channels of communication with the customer (Webb and Hogan 2002). Clear lines of communication with clients develop prerequisites for a successful business, as it establishes the company not only as a competent producer but also as one that is open to consumer interaction and input.
Conclusion
The application of strategies of hybrid distribution allows a company to expand and achieve higher revenue through a more extensive and more varied clientele. While the use of multi-channel methods may be hard to install, the benefits of their capable implementation outweigh the consequences. A fact that supports this, additionally, is that an inability to adjust to new methods of marketing creates significant drawbacks to firms, displaying them as outdated and affecting their ability to compete with others.
Work Cited
Webb, Kevin L., and John E. Hogan. “Hybrid Channel Conflict: Causes and Effects on Channel Performance.” Journal of Business & Industrial Marketing, vol. 17, no. 5, 2002, pp. 338-356. Web.