Home Controls Marketing Case
Home Controls sells a variety of products in the home automation market– security systems, home thetre systems, telephones and intercom systems, as well as thermostats and other appliance automation devices. Because Home Controls is involved in so many niche markets, it is crucial that they manage their channels effectively.
Home Controls clearly wants to cater to the upscale do-it-yourself market through a direct sales channel via its web site. This is likely the highest margin channel they have, since it eliminates middlemen and allows them to charge the customer retail price for goods while the customer paid for direct shipping. Direct sales, unfortunately, will also likely be the smallest volume channel since most customers will be unable or unwilling to do much of the installation tasks.
Home Controls will want to partner with a variety of specialized installation service providers in the major US markets in order to be able to offer co-branded installation services. High end home theatre stores generally employ a variety of technicians that can come to the customers house to install, configure, and troubleshoot a home theatre purchase. Home Controls will want to partner with these local stores to provide installation of Home Controls controllers in customers homes. This will involve adding middlemen, though those middlemen would be providing a useful service that would increase the price Home Controls could charge. At the retail stores, Home Goods products would be sold along side competitors products. In order to ensure that the products were displayed prominently, Home Controls would need to ensure that the retailers were adequately compensated in the sales agreements, which would obviously cut into Home Controls margin. Shipping relatively small quantities of products to relatively large numbers of independent retailers would likely be a further expense that reduced margin. High-end retailers, though,