[Please insert any

relevant photo
around this box] CHAPTER

4
Communication And
Multi-Channels
Subtopics:-
4.1 Multichannel defined
4.2 The Channels
4.3 Customer and the use of channels

4.1 Multichannel defined

• The term `multichannel` is used to refer to this growth in the number of channels
available.

The development of various communication channels, such as the Internet, telephone

and the mass media, through which supplier and customer can communicate, requires
substantial investment and effort

Suppliers will have to learn how customers make use of these channels and how they
may combine this knowledge with their marketing goals

These channels will also have to be integrated with one another as well as with the
personal contact points between customer and supplier

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4.4.1 Confusion of concepts

Multichannel is term that inherently
leads to confusion. After all, are we
talking about communication or
about distribution channels? Or
perhaps both?
With the emergence and widespread use
of the telephone and the internet among
business customers and suppliers, the
possibilities for customers and companies
to get in touch only seems to increase.

4.2 The channels

We propose that it involve the channels through which information is exchanged in

contact: in other words, multichannel involve communication channels.

If they were channels of distribution, then it would involve participants in one ore more
channels.

The reason is that a distribution channel (marketing channel) is defined as: ‘the
succession of channel participants who perform a function in the distribution or
marketing of a certain product the (raw materials) producer to the end user’

Communications

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4.2.2 Communication Power

Although the channels supported by IT do very well, the mass media and personal
contacts continue to play a vital role.

The fact remains that mass media may be used to the social dimension, face-to-face
conversations continue to score higher than contact in which machines function as the
interface between two people.

We can gain more insight into the communication power of the various channels if we
look at the following dimensions

The degree of interactivity (y-axis)

Questions which might be examined within the scope of interactivity include:

-To what degree does the communication from someone else receive a direct or
delayed response or no response whatsoever?

-Who must go to whom in order to achieve contact?

-Who dictates the speed at which the information is transferred (pacing)?

• The degree of the personality the (x-axis)

-Is there face to face contact or is a medium used to reach a large target group (`one-to-
many`). It is possible to make a channel more ‘personalized’ by using a personality medium
to allow the viewer or listener to experience a sort of para social conversation in which he
or she participates. A channel may also become ‘more personal’ by ascribing certain
human characteristics to it; a good example of this is the first pay terminals which had a sort
of ‘human face’ to speed up the adoption process.

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 • The number of sense stimulated by a channel (z-axis)
-To what extent is the medium capable of providing an accurate representation of objects,
events and people that corresponds to ‘reality’? The possibilities to imitate this reality are
becoming increasingly available. In this case, we refer to this as immersion: the degree to
which a virtual environment is created which coincides with the user`s experience in reality
(virtual reality)

Figure 4.1: Dimensions in which channels may be scored

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4.2.3 Interweaving of channel

One of the most important

developments in the
multichannel field is the
manner in which channels
interweave with one another to
form a network of touch points

This integration is not limited to

Integration of fax, telephone, the IT-supported channel alone;
it extends to mass media and
SMS, e-mail, Internet thanks to
direct mail (printing on demand).
the contact centre
And besides people, objects also
get connected.

Integration of mobile Integration with a mass

telephone and internet : WAP medium such as television:
interactive television

4.3 Customers and the use of the channels

In technical and creative terms, the IT-supported channels offer good

opportunities to conduct a dialogue and create an experience, if so desired.
However, before the use of multichannel can grow to become a success, it
will have to be ascertained whether customers are actually using these
channels.

And this is not limited to whether or not they are surfing the Internet from time
to time, but specifically concerns the application of these media by a variety
of customers to certain purchase and use situations.

Customers differ from one another in the manner in which they use the
different channels. Having knowledge of this behavior and these preferences
is essential to being able to create a dialogue and/or the desired effect.

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4.3.1 Consumer Marketing

In research conducted by IPM and Peelen and associates (2000) for KPN Tele-commerce,
the issue of channel use was examined further with respect to consumer markets. On the
basis of the stable personality traits, consumers were divided into eight types:
1. Conservative / Passive / Social
2. Conservative / Passive / Instrumental
3. Conservatives / Active / Social
4. Conservatives / Active / Instrumental
5. Open / Passive / Social
6. Open / passive / Instrumental
7. Open / Active / Social
8. Open / Active / instrumental

Figure 4.2: Use of the channels by various consumer types in different phases of the relationship
Source: Peelenet al (2000).

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Influence of the channels on pricing and the formation of relationships

Thanks to multi channels and the internet in particular, prices will drop and formation
of relationships will be placed under pressure. This is a fear that seizes many a
supplier and one which may be substantiated. The internet can potentially lead to:

More transparency

Lower transaction costs.

More customer power

Figure 4.3: One-stop shopping

Source: Jupiter Media Metrix.

Recommendations on Multichannel Communication

• Now that the channels have been identified and defined, the trends have been
described and the behavior of customers with regard to multichannel has been
analyzed, an indication may be provided of what we would like to achieve with
multichannel communication.

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 • The maximum performance:
Getting the most out of the new IT-supported channels is a challenge for many the goals
are:
-Surpass the shop experience:
-Increase the efficiency of company processes and reduce costs
-Enlarge the market and customer range; and
-Improve the organization’s flexibility and versatility
• To achieve all four of these goals using a multichannel network would yield the
optimum result, and this is the overarching goal which should be pursued.
• The objective of the integration of channels is to develop a dynamic network in which
contact processes between customers and suppliers may take place with a limited
degree of dependence on time and place, in the desired form with the desired
content and minimal costs and efforts for both parties.
• There must be considerable navigation possibilities for the customer. This interweaving
of channels leads to the often-quoted flow concept of Hoffman Novak. The
communication progress smoothly as a flow without many shocks, repetition or
delays.
• In order to achieve this, the use of the IT-supported channels should not be limited to
one phase or individual phase in the customer-supplier relationship, but instead
should extend across different phases(see figure 6.5)

Figure 4.4: Contact processes through different channels per segment

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Channel Management

Advice High Advice

High Margins
Face

Lower Advice
Medium Margins
Call
Commodities
Low Margins
Click
Leads and sales
Low Margins
Mail
Margins

Subtly moving the client to the most efficient and most effective channel
combination.

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