Developing the Channel Design


Channel design refers to those decisions involving the development of new marketing channels where none existed before, or to the modification of existing channels. Channel design is an important decision as the channel is a means through which the firms can find new prospects, communicate to customers, and physically deliver the product. Of all the marketing decisions, the ones regarding distribution (channel) are the most far-reaching. It can revamp a promotional program, modify its product line. But once a company sets up its distribution channels, it generally find changing them to be difficult. Channel design, therefore, does not refer to channel structures that have simply evolved, it refers only to those where the management has taken an active role in the development of the channel.

 

Specifically, the channel design decision includes:

1.    the number of channels to employ;

2.    the number of levels to be included in each channel;

3.    the type of intermediaries to employ; and

4.    the number of channel intermediaries at each level.

 

The selection of the best channel (channel design decision) to accomplish the objectives is challenging because:

a)      channels need to be adopted depending on the target segment and positioning;

b)      the goals of the channel members may differ;

c)      the alternatives are numerous.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

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