Definition

channel strategy

A channel strategy is a plan for guiding decisions about a product's distribution channel -- the chain of intermediaries that it passes from its creation through to delivery to the end user. 

In this context, a channel is one or more intermediary individuals or organizations that perform a role in getting a product or service from the producer to its purchaser. Some intermediaries may be involved in multiple channels. There are three channels that a product or service must pass through: the sales channel, the product channel and the service channel. The channel strategy includes decisions about the type and number of intermediaries that are appropriate for a given product and how the chain of intermediaries will be managed. 

The appropriate strategy varies from one product to another. The direct sales model is the simplest, in which the consumer buys directly from the producer. Indirect channels can involve several intermediaries. Value-added resellers (VARs), managed service providers (MSPs), consultants, systems integrators (SIs), original equipment manufacturers (OEMs), retailers, wholesalers and distributors may all be channel partners.

 

Contributor(s): Ivy Wigmore
This was last updated in March 2013
Posted by: Margaret Rouse

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