Question

Discuss the major steps involved in channel and design decisions

Answer 1

1. Analyze the Consumer- Immediate and ultimate customers may be the same, or quite separate. Some fundamental questions apply in both cases: There is a need to know what the customer needs, where they buy, when they buy, why they buy from certain outlets, and how they buy. It is best to define the ultimate user's characteristics first, as the results of this assessment can decide the other channel institutions we can use to meet those needs

2. Establish the Channel Objectives- When consumer expectations are defined, the marketer may determine what the channel needs to achieve which can be captured in channel goals. Channel goals are based on customer needs, marketing strategy and company strategy and goals. However, in cases where a firm is just starting up or an older company is trying to carve out a new market niche, the channel goals may be the dominant goals.

3. Specify Distribution Tasks- Upon setting the goals for the delivery, it is important to decide the basic tasks (functions) to be performed in that channel network. Depending on the case, the channel manager will be very precise in explaining the tasks and also explain how these tasks can shift.

4. Evaluate and Select Among Channel Alternatives- Determining the specific tasks on the channel is a prerequisite for evaluation and selection. Channel alternatives have four considerations: number of levels, intensity at the different levels, types of intermediaries at each level and application of selection criteria to channel alternatives. Therefore, it is necessary to determine who will be responsible for the channels chosen.

5. Evaluating Channel Member Performance- The need to evaluate the channel members' level of performance is just as important as assessing the other marketing functions. The marketing mix is obviously very interdependent, and the failure of one variable can cause the whole to fail. However, there is one significant difference: the channel participant is concerned with individual business companies, rather than with the workers and activities under their control, these businesses may be unwilling to change their practices.