Adding a channel to an existing market creates rapid growth, which is the main reason why companies do it. Creating more channels allows companies to reach more people more frequently. It is wise to have more than one marketing channel to spread out assets, in case something happens to your main source of revenue. The more channels, the more the resources are spread. Other channels can exist as a back-up plan.
The higher number of channels owned in the market, the greater market share, thus the greater the profit. Channel partners can add value the product, as well as handle all of the distribution needs. This reduces the burdens on operations. Partners also deal with customers and market products and services effectively and on their own.
There are problems with creating new market channels; they can be just as much of a challenge as creating a product or service itself. The product or service quality may not be up to par in all of the channels. It is easy to focus on the actual market itself instead of regulating the quality of what is being distributed. A blog by Philip Kotler illustrates this by giving Starbucks as an example. It is no secret that Starbucks makes up a good amount of the market share, adding channels (or in their case, franchises) everywhere, such as airports. Kotler raises this question: Does a cup of Starbucks taste the same sitting in a store as it does on an airplane? Maybe so, but some companies’ products fail at this.
There also is such a thing as too many channels that are difficult to keep track of. Kotler uses Starbucks again as an example. With many franchises within minutes from each other, sales can be lost. So how does one create an effective multi-channel marketed business? To keep a close watch on all channels, and to operate them with the same policies. This keeps things like different quality Starbucks cups from happening, and gives more control to the main channel.
More channels are not only a competitive advantage, but a competitive liability as well. When managed correctly, these marketing channels will increase profit and market share.