AMCON Distributing (DIT) Channel Management Marketing / MBA Resources

Introduction to Channel Management

What is the Importance of Channel Management for AMCON Distributing

Channel Management enables the consumers to efficiently – discover the products of AMCON Distributing in Tobacco, research the products and services, and buy products on multiple platforms. Covid 19 lockdowns and social distancing norms have taken the demand of e-commerce and effective channel management to unprecedented levels. It has brought forward the evolution in not only the e-commerce industry but also in the financial technology industry, payment industry, entertainment industry, and online touchpoints.

Effective and efficient channel management can help AMCON Distributing to avail opportunities in Tobacco industry by – better consumer targeting, identifying consumer purchase behavior, demand forecasting, identifying opportunities , and most importantly timely delivery of the products and services.

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Channel Management and Distribution in Tobacco

The rapid growth in the e-commerce industry has led to consumers using multiple channels to discover products and services, compare prices, research the features, and buy using various financial options available on multiple e-commerce platforms and channels. According to a survey conducted by Channel Advisors –

33% of the consumers found products via social media posts on platforms such as Instagram, Twitter , and Facebook . The percentages of young consumers discovering products through social media posts are relatively very high compared to the other consumer segments.

43% of the consumers in United States of America are discovering products through browsing on various market places

37% of the consumers are discovering products and services by browsing the specific brand or company retail website.

25% of the consumers in United States first know about the product through advertisements on streaming services and other platforms. Given the potential of advertising on the streaming platform, it may be quite possible that Netflix is willing to explore the advertising opportunities in collaboration with Microsoft on its platform after years of resisting the idea.

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AMCON Distributing biggest challenges around Channel Management

AMCON Distributing needs to have a strategy to meet its customers on various above touchpoints otherwise it will risk losing its customers to competitors in the Tobacco industry. The Consumer/Non-Cyclical sector in United States is highly competitive and it requires highly efficient channel management to meet the demands of customers such as – low price shipping, effective return management, drop shipping partners, highly effective logistics platform, integrated product update mechanisms across various marketplace platforms etc.

Some of the challenges that AMCON Distributing can face in channel management are –

Social media marketing

– Prior to the social media, organizations only had to deal with wider media only during the quarterly call, but now each organization such as AMCON Distributing needs to have a vibrant and relevant social media marketing strategy.

Channel partners and data sharing

– Data has become the critical source of competitive advantage in the current business environment. AMCON Distributing data strategy in the Tobacco needs to robust measures that can enable it to share data with multiple marketplaces and channel partners without compromising its competitive advantage. Recent case studies of Amazon use of suppliers’ data to introduce its private labels have highlighted the dangers of dependence on marketplaces.

Optimizing content to enable direct consumers on its website

– Inward marketing is the most immersive form of marketing but to utilize it AMCON Distributing needs to have a robust content optimization strategy. Secondly it needs to integrate its content management strategy with its overall advertising and marketing strategy. Optimization of marketing efforts can lead to higher ROI and better consumer expecations management.

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Effective Channel Management Strategies

Some of the effective channel management strategies for AMCON Distributing in the Tobacco industry are –

Data sharing strategy

– AMCON Distributing can use entry level products on marketplace to gather data about consumer usage. Secondly it can keep the core products away from marketplace so that it can guard the data. This is a highly effective strategy in products where the maximum source of revenue is post sale services and maintenance.

Pricing algorithms and automation

– Highly effective channel management strategy today requires a dynamic pricing infrastructure, that can enable the company to do personalize marketing and pricing.

Product – Channel Fit

– E-commerce provides a highly dynamic enviorment where data can be tracked in realtime. This can enable AMCON Distributing to build a product channel fit, given the capabilities, capacities, and potential of the organization and channel partners. For example multiple marketplace can help the AMCON Distributing to push its entry level products while a brand specific in-house online strategy can help it to sell high value products.

Optimizing advertising and marketing efforts

– Effective channel management can help AMCON Distributing to optimize its marketing and advertising efforts in the Tobacco industry.

Social media presence

– Tesla has shown how an effective social media strategy can trump billions of dollars spent in advertising and marketing efforts. With its highly effective social media strategy, Tesla has been able to clearly communicate its vision, mission, and product-related events directly to the consumers.

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Conclusion

Channel management strategy helps in increasing customer satisfaction rate, net promoter score, reducing inventory quantities and costs, efficient order management, protecting confidential data, providing more touchpoints to the consumers, and increasing the overall Return on Investment. Simple channel management strategy in Tobacco industry can no longer stand out among the competitive landscape. AMCON Distributing needs to have highly effective channel management strategy that includes potential to do sophisticated dynamic pricing infrastructure, repricing algorithms, product data optimization, shipping partners’ fulfillment data tracking, and analytics to highlight real time discrepancies in the operations.

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SWOT Analysis / SWOT Matrix of AMCON Distributing

PESTEL / PEST / STEP Analysis of AMCON Distributing

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