ASPECTS OF TOTAL QUALITY MANAGEMENT APPLIED IN ...

Annals of the University “Constantin Brâncuşi”of Tg-Jiu, No. 1/2008, Volume 2,
ISSN: 1842-4856
E-commerce and multi-channel strategy
Unquestionably the greatest force to impact marketing channel strategy in at least the last half
century has been Internet-based e-commerce. The availability of the online channel option means
that now virtually every firm whether large or small must include the Internet as a channel for
reaching its customers. Further, all of these firms are faced with the task of blending online
channels with conventional channels. So, “bricks and clicks” is no longer just a cute expression but
a very real marketing channel strategy issue.
Integrating online channels with conventional channels to create a “seamless” experience for
customer is, if course, the ideal situation — in theory at least. In practice, however, such seamless
integration is still more the exception than the rule because substantial obstacles exist. Although the
technological barriers seem to be falling rapidly, channel strategy issues are still very much in play.
Such key issues as the following still need to be addressed more fully: Should a firm offer all of its
products online? If not, what is the proper balance between conventional and online channels? Can
online channels lower the cost of distribution? Are certain products more “Internetable” (amenable
to the Internet) than others? Do online channels provide access to new customers? To what degree
do online channels take sales away from the firm's conventional channels? Can online channels
enhance customer service even as they replace humans in conventional channels?
Reaching more customers via multi-channel strategy
Does having more channels automatically mean that the firm will gain access to more customers?
Much of the literature on multi-channel marketing suggests that it does because additional channels
provide more points of contact for customers to gain access to the firm's products. While this
proposition seems self evident, it may not hold up to closer scrutiny. Additional channels may not
reach the intended customer segments, or the customer segments that patronize the new channels
may be comprised largely of customers who simply switched from the firm's prior channels
resulting in “channel cannibalization” rather than new customers. Moreover, poorly integrated
multiple-channels may engender in customer dissatisfaction with the firm's multi-channel strategy
resulting in loss of customers to competitors. So, it might be that it is not the number of channels
but the channel mix and how well the mix is coordinated and integrated that determine how the
customer base is affected by multi-channel strategy.
Future analysis and research on multi-channel strategy will need to deal with these questions to see
whether any evidence can be found for the proposition that simply adding channels attracts more
customers.
Finding the optimal channel mix
If as alluded to in the previous section, it is the quality of the channel mix rather than the quantity of
channels that has the most influence on the size of a firm's customer base, future research on multichannel
strategy should focus on the channel mix or what has been referred to as the channel
portfolio. In the context of multi-channel strategy, the channel portfolio can be viewed as analogous
to financial instruments in a conventional portfolio. So, just as a well-designed financial portfolio
provides coverage across a range of investment opportunities to achieve diversification, the well
designed channel portfolio may need to offer the firm access to a range of customer segments while
achieving channel diversification. Of course the particular channel mix in terms of number of
different channels and the composition of the channel mix or portfolio will vary widely for different
industries and firms. But the emphasis on obtaining an optimal channel mix or portfolio may prove
to be the core concept of multi-channel strategy.
Synergy and multi-channel strategy
Synergy has become an overused term in business, particularly when it comes to mergers and
acquisitions. But in the context of multi-channel strategy, synergy meaning one channel reinforcing
the effectiveness and efficiency of other channels might be a very real outcome. Using online
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