The Role of e-Commerce in Multi-Channel Marketing Strategy

This chapter describes the key aspects of managing multiple marketing channel systems and explains how e-commerce plays a key role in their successful operation. We adopt a customer-centric perspective by beginning with a discussion of channel service outputs—those benefits that customers hope to obtain from the marketing channel. Successful firms recognize that customers are not homogeneous in their desire for channel service outputs and, hence, can be grouped into market segments that are best served by different marketing channels. We enumerate the advantages of multiple channel systems and describe some of their limitations, in particular, potential conflict among the various channels and one channel’s cannibalization of another’s demand. The effective integration of the firm’s diverse marketing channels can overcome these problems and, simultaneously, generate superior multi-channel performance. Finally, we recommended that channel decision-makers be cognizant of and accommodate the demand environment that confronts the firm’s multiple marketing channels. Specifically, the complexities and the differential effects of the buying and selling stages and the channel life cycle stages cannot be ignored in designing a successful multi-channel system.