Term Paper: Multiple Channel Structures

Sample Term Paper

Words 2,100

This is a term paper on multiple channel structures. The relationship between number of channels and channel outcome is that there can be four major outcomes. A large number of market channels increase market availability.

The relationship between number of channels and channel outcome is that there can be four major outcomes. A large number of market channels increase market availability. In addition, this also leads to catering to different marketing sections, this therefore is significant in determining the volume of sales. Number of channels also leads to lowered distribution costs specializations like ATMs. However, the initial investment and costs take time to be realized. The other factor is the degree of control.

The level of contact provided by the channels as a significant impact on sales and costs.  However, the level of contact depends on the type of financial business that one has. In the case of pension, funds the customers need in depth details and a high degree of contact level therefore independent intermediaries and agents are used. This also influences costs. Different channels have different costs involved therefore the impact of using a specific combination of channel may have a tremendous impact on competitiveness of the firm. With the new technology the low contact strategy is preferred by customers, therefore the financial institutions have to invest heavily in the new technology to compete with the non-traditional firms.

The level of integration is another important matter the more the operations or the channels are integrated the better control the firm would have over the channels, the use of intermediaries leads to additional costs and a wider market coverage but the control and coordination weakens. However full integration is not very practical as it is much less flexible.

To sum up the theory in the article it is important to note:

While still early in their evolution, multi-channel “value propositions” – innovatively delivering new benefits through integrated multi-channel solutions – show signs of being significant growth and profit drivers for companies that are able to effectively develop them. (Yulinsky, 2000)

Multiple channel strategy is not a new phenomenon, it has become a new strategy for improving  profitability and increasing market share. In addition, the article shows the outline how the different elements work in the channel and what the options for different types of financial institutions.

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