Marketing
Issue No. 39 - February/March 2008
Flipping channels for fun and profit
by Dr David Corkindale and Dr David Corkindale
As the Internet’s influence grew leading up to the DotCom boom, one of the major prophesies was that many traditional delivery channels for goods and services would be bypassed.
In some cases this would mean eliminating the need for an intermediary like a real estate agent, book retailer or investment professional advisor. Or, a cheaper provider could take over, or customers would go directly to
the producer.
This process of ‘disintermediation’ introduces new and alternative channels of distribution - for information, money, clothing, healthcare, education or whatever. It is not a recent phenomenon: the car replaced the horse, planes replaced ocean liners and the fax replaced
the telex.
In principle, all businesses would seem to be vulnerable, particularly to the Internet and ever-more-sophisticated communication devices.
Should you be worried? Well, not if you avoid the mental trap that many fall into when a new distribution channel comes along.
The mistaken assumption is that the new will replace the old. This rarely happens. In fact what happens is not just addition of the new channel, but multiplication. If you appreciate this there can be great opportunities for new business.
What old channels can learn from the new delivery channels is that to succeed in the world of increasing choices, each channel must play to its own strengths and not seek to compete against the specific advantages a new channel has.
Sometimes it takes an old channel a long while to come to terms with this and develop a new strategy; sometimes the old channel never adjusts.
Let’s look at some examples.
The Media
When TV came along it was widely believed radio would die. Radio had provided the main family entertainment in the home; people sat around the set and listened to variety shows, serials and dramas. Initially radio tried to continue doing this when TV arrived and dul...
