Marketing Channel Strategy

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audit systems, they need training programs to educate employees about the role 
that each channel plays in generating customer leads or sales, contributing to cus-
tomer satisfaction and loyalty, and helping other channels. When e-commerce 
was still brand new, store managers often complained about the risk of possible 
cannibalization of their store sales, creating a new form of channel conflict. The 
companies that dealt best with this new concern made sure to train managers 
about the potential benefits of a collaborative e-commerce channel, but they also 
protected those managers’ interests, often by crediting stores for online sales that 
took place within their trade area. Once managers got more familiar, they could 
more easily recognize the synergies across channels, such as when click-and-collect 
services help get more consumers into the store, to pick up their already ordered 
items, but also potentially to purchase additional items that the store promotes to 
them. Thus, for example, a grocery retailer might have a preordered dinner ready 
for customers to pick up on their way home and could send them a coupon for a 
special bakery item to encourage them to grab something for dessert too. In Sidebar 
11.2, we take a closer look at some of the possibilities and challenges associated 
with managing multiple channels in the automobile industry.
SIDEBAR 11.2
Omni-Channels and Car Buying
Automobiles are a high-involvement purchase for most consumers. In the United States, most 
manufacturers sell vehicles through franchised dealerships, and prior to the Internet age, buyers 
would go from dealership to dealership to learn about car models in their consideration set, 
inspect and test drive the vehicles, and receive offers from the seller. Both the manufacturers 
and the dealerships relied heavily on television and newspaper advertising to inform consumers 
about brands and promotional offers. Even though a sticker on each car listed the manufactur-
er’s suggested retail price, buyers and car salespeople usually engaged in intense haggling to 
arrive at the terms of the deal—a process that many consumers found stressful and unpleasant. 
To arm themselves and overcome some of their information disadvantages, buyers might consult 
industry sources, such as the Kelley Blue Book or Consumer Reports, to gather expert evaluations 
and reasonable prices to pay for additional features.
As it has in so many industries, the arrival of the Internet age changed the entire market. For 
example, a new partner entered the channel, in the form of infomediaries or information aggre-
gators. Consumers could visit sites such as Edmunds.com to get even more detailed information, 
often specific to their geographic locations, about vehicle specifications such as pricing, fuel econ-
omy, mileage, and various available features. Many sites also incorporated comparison tools to 
help shoppers review different models head-to-head. In response, car dealership and manufacturer 
websites added more detailed information, videos, and photographs of their vehicles. Dealerships 
also have hired Internet sales agents to conduct the purchase interaction completely online, engag-
ing in email exchanges and chat features to answer questions and complete the sale.
As a result, the car-buying consumer journey has changed. Whereas once dealerships’ territories 
were clearly demarcated, today consumers who have settled on a make and model might contact 

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multiple dealerships to find the best deal. Distance to a particular dealership is less of a hindrance. 
In addition, according to a Bain and Co. study, today consumers start researching their car purchase 
about nine weeks before they complete it, and 60 percent of buyers already have decided on the 
price, make, and model before they ever visit a dealership. Then the average number of dealerships 
they visit is smaller, down to just 2.4.
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Yet auto manufacturers and dealerships generally have been slow to keep up with these 
trends. Showrooming (rather than vast lots with thousands of cars) and virtual reality test drives 
are likely to become the norm. Some consumers still might want to visit a dealership to iron out 
the final details for the vehicle configurations and financing, but an increasing number of them 
are happy to get these negotiations done online. Therefore, to deliver a seamless omni-channel 
experience, the manufacturers and dealerships will have to figure out ways to share data and 
gather much more complete information about each potential buyer, so that they can interact 
and engage with customers in the research stage, before they have made up their minds.
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 It 
is up to marketers to develop means to capture customer contacts made through touchpoints 
across all channels. Traditional dealer lots are very expensive to maintain, so virtual showrooms 
represent a key opportunity,
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 such that a dealership could encourage consumers to visit their 
virtual showrooms to select a car of interest, then perhaps offer test drives by bringing the car to 
the consumer’s home or office, as an advanced service offering.
Turning upstream, another element of managing omni-channel relationships 
involves channel partners such as franchisors, which need to provide their franchisees 
with the tools and “expert power” to cater effectively to customers. The franchisors 
likely need to establish an overall IT infrastructure and real-time data, so the fran-
chisees can achieve operational efficiencies and sufficient customer knowledge. At 
the same time, such systems enable franchisors to monitor franchisee performance 
and provide feedback. Some franchisees may resent such close monitoring, though, 
which could become a source of conflict as franchisees who signed up to run their 
“own” businesses may resent what they perceive as excessive and suffocating over-
sight. Franchisors could reduce such conflict by demonstrating the clear benefits to 
franchisees in terms of additional profits and sales.
The key to a successful omni-channel strategy is that the digital experiences 
have to be integrated with the in-store experiences. Essentially, there should be no 
breakdown when consumers “travel” between the online and offline worlds. Such 
breakdowns would happen, say, if a consumer ordered merchandise only and then 
called the store to ask some questions and the store had no idea or was unable to 
pull up the customer’s order. We have raised the issue of consumers ordering food 
via an app and then “cutting in line” to go pick it up in the restaurant, while those 
not using the app find the lines are even longer than they had anticipated because 
the “invisible” online orders were being prepared.
It should be clear by now that the nature of the omni-channel strategy varies 
by industry as some products are easier to consume digitally (e.g., movies, music, 
computer software, and e-books) and the online purchase rate varies significantly 
by product category (e.g., airline tickets versus groceries versus automobiles).

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Assessing Channel Performance
In Chapter 2 we provided an overview of various omni-channel metrics. In Figure 
11.2, we provide a snapshot of omni-channel performance assessments as the fourth 
pillar holding up the overall omni-channel canopy. We propose three main catego-
ries of assessment. The first centers on the touchpoints that customers use, whether 
the store, the website, telephone, a mobile app, or social media. Sellers need an 
effective mechanism to assess the relative 

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