• Building new distribution channel marketing strategies allows brands to reach new customers. 
  • This strategy can increase sales, brand awareness and engagement if appropriately implemented. 

The “Build a New Distribution Channel” marketing strategy involves creating fresh avenues to get the products and services to the end customers. It’s about finding routes that circumvent the already existing and exhausting distribution channels. This strategy can involve anything from establishing an online store to partnering with new types of retailers.

This strategy helps expand the brand’s reach and tap into new customer segments. The upside of this strategy is that it can potentially increase sales, brand awareness, and market share by reaching a wider audience. Building a new bridge isn’t always easy and requires significant resources, time, money, and workforce. 

How did Apple successfully Incorporate the “Build a New Distribution Channel” marketing strategy? 

Apple.Inc. is an American multinational technology company headquartered in Cupertino, California, USA. The tech giant designs, develops, and sells consumer electronics, computer software, and online services. Its success with the “Build a New Distribution Channel” strategy is a masterclass in creating a unique, innovative, and impactful customer experience.

Building the Coveted Apple Store Experience

Like every other brand, Apple created its retail haven—the Apple Store—instead of relying solely on the traditional electronics store. These stores are meant to be more than selling products; they showcase them in a clean, minimalistic environment that encourages exploration and consumer interaction. 

Consumers can try every product, get personalized advice from knowledgeable staff, the Apple Geniuses, and attend workshops to learn new skills. Here, they prioritized customer service, and the “Genius Bar” offered free technical assistance, fostering trust and loyalty. 

Leveraging Online Channels

Apple also built an online store aimed at mirroring the in-store experience. It provides detailed product descriptions, high-quality visuals, and tutorials to provide information. The online stores offer educational resources and support, fostering a sense of community and brand loyalty. 

The entire inventory was synced between online and physical stores, allowing customers to easily pick up their orders online or check in-store availability. Facilitating these conveniences strengthens the connection between online and offline channels, boosting sales and brand engagement. 

Apple launched the AppStore as a one-stop shop for apps specifically designed for its devices. Eventually, the consumer technology giant successfully created a lucrative ecosystem in which consumers try to get multiple devices, such as an iPhone, iPad, MacBook, or Mac, to complete the ecosystem and get the most out of it. 

Understand that Apple’s new distribution channel strategy is more about selling products and services and is aimed at building a brand experience for consumers. They extensively focused on customer service, a curated physical environment, and seamless online integration, resulting in a loyal customer base. 

What is the “Build a New Distribution Channel” Marketing Strategy? 

The core of the “Build a New Distribution Channel” marketing strategy is to create fresh avenues or channels to ensure that the product or service reaches the end customer without any significant hassle. Marketers can establish an online store, partner with new types of retailers, or establish a medium for potential customers to reach your brand.

Before implementing, marketers must conduct thorough research to understand the ideal customer’s buying behavior. Look for the places or options where they typically look for products or services similar to yours; it can guide brands towards selecting more suitable channels. 

Strategically decide between direct and indirect models, craft a clear structure for the new channel, and map out the logistics, including how customers would learn about the product and order and receive it through this new channel. Direct channels offer more control but require more resources. At the same time, indirect channels provide a more expansive reach, but they might involve profit sharing. 

Marketers should craft a clear structure for this new channel and map out details about logistics, including how customers will learn about the product, order it, and receive it through this new channel. Channel design plays a crucial role in the successful implementation of this strategy. 

If the target audience has diverse segments, marketers must consider whether a single channel will suffice or need a multi-channel approach tailored to each segment’s needs. Marketers must always prioritize the customer’s experience and show them how this new channel would benefit them. Point out benefits like convenience, faster delivery, access to exclusive products, etc. 

If the brand opts for an indirect model, it must first identify potential partners who align with the brand and have a stronger reputation within the target market. Then, it must work on cultivating strong relationships built on mutual trust and benefits. Businesses must also consider establishing a pricing structure considering the costs associated with the new channel to maintain profitability for both parties. 

Implementation Steps

Clear goals for the new channel must be set to implement this marketing strategy. Gain accurate answers about the strategy: Is it to increase sales, boost brand awareness, or increase market share? Based on the research and goals, marketers can select suitable distribution channels. 

Initially, starting with a pilot launch in a limited market can be a test run to test the effectiveness of the new channel and identify areas for improvement before full-scale rollout. They must continuously track the performance of the new channel through sales data, customer feedback, partner reports, etc. Ensure that you are prepared to adapt the strategy accordingly. 

Pros and Cons of “Building a New Distribution Channel” Marketing Strategy

Like every other marketing strategy, the “Building a New Distribution Channel” strategy comes with its pros and cons, as discussed below. 

Pros

Building new channels allows brands to tap into entirely new markets or customer segments that were accessible through existing channels, which could significantly boost sales and market share. Having a direct channel also allows brands to have more control over pricing, branding, and customer experience, optimizing and enhancing conversions.

Cutting out intermediaries, specifically in an indirect model, increases sales and profit margins, while direct channels offer complete control over pricing. Entering a new, high-quality distribution channel can elevate the brand image and position itself as a premium player in your market. Direct channels allow for valuable data collection, enabling better personalization and targeted marketing efforts. 

Cons

Building a new channel often requires significant upfront investment, including logistics, marketing campaigns, personnel training, technology upgrades, etc. Moreover, developing and launching a new channel takes time; careful planning, execution, and optimization are crucial for success.

There’s always a chance that the new channel might not resonate with the target audience. Thorough research and testing could help mitigate these risks, but there’s no guarantee. Introducing new channels might create conflicts with existing channels on pricing or product offerings. There’s a significant loss of control in indirect channels, making partner selection more crucial. In conclusion, the “Build a New Distribution Channel” marketing strategy can be a powerful tool for reaching new audiences. This strategy requires considerable resources, but with careful planning, execution, and ongoing optimization, brands can achieve the desired results.