Prateek Kumar (CM15224)

Vaishali Verma (CM15234)

 What is channel?

 Development of new marketing channels where none had existed before

or to the modifications of existing channels.

 Channel design decisions are critical because they determine a product’s

presence and buyer’s accessibility to the product. Channel decisions have
additional strategic significance because they entail long-term
commitments. It is usually easier to change the prices or promotion than to
change marketing channels.
 DIMENSIONS OF CHANNEL DESIGN

PRODUCT DIMENSION
MARKET DIMENSION

INTERMEDIARY DIMENSION COMPANY DIMENSION

ENVIRONMENTAL DIMENSION
 1. MARKET DIMENSIONS
market geography
market size
market density
market behaviour

 2. PRODUCT DIMENSIONS
bulk and weight
perishability
unit value
newness

 3. COMPANY DIMENSIONS
Size
Financial capacity
Managerial expertise
Objectives and strategies
 4. INTERMEDIARY DIMENSIONS
Availability
Cost
Services

 5. ENVIRONMENTAL DIMENSIONS
 Defining the customer needs

Defining the channel objectives

Channel alternatives

Evaluation of major alternatives

Ideal channel structure

 1. DEFINING THE CUSTOMER NEEDS:

It includes:
 Product information
 Product customisation
 Product quality assurance
 Lot size
 Product variety
 Spacial convenience
 Waiting and delivery time
 After sales service
 logistics
 2. DEFINING CHANNEL OBJECTIVES:
 Perishable product requires more direct marketing.
 Bulky products, such as buildings materials require channels that minimize the shipping
distance and amount of handling.
 Non-standard products such as custom built machinery and specialised business forms, are
sold directly by company sales representatives.
 High-unit value products such as generators and turbines are often sold through a company
sales force rather than intermediaries.

 3. CHANNEL ALTERNATIVES:
at the time of deciding, the company will scan for:
i) types of intermediaries
ii) number of intermediaries
iii) cost of channel system
iv) terms and responsibilities of channel members.
 4. EVALUATION OF MAJOR ALTERNATIVES:

 Economic criteria
 Control criteria
 Adaptive criteria

 5. IDEAL CHANNEL STRUCTURE:

 With the completion of forgoing steps, the number of alternatives would have narrowed
down considerably. The firm must evaluate, design and chose the best among them.
 IDENTIFY POWER SOURCES
The role of the channel manager is to continuously and dynamically manage channel
initiatives and relationships via realms of influence over channel power.

Listen well, understand, relate:

Get to know the needs of each channel member/segment and the relevant nuances of their interdependent relationships.
(mentally walk a mile in their shoes)

 IDENTIFY CHANNEL CONFLICTS

When one channel member’s actions prevents the channel from achieving its goals:
 Goal conflict
 Domain conflict
 Perceptual conflict
 GOAL OF CHANNEL COORDINATION
A channel is coordinated when:
disparate channel members are brought together to advance the goals of a channel in
harmony in spite of their independent and likely conflicting goals.

This is the ultimate goal of channel management

Decisions about a product’s physical movement and transfer of ownership from
producer to consumer.

 FIRST - Setting channel objectives

 Determine what the company is trying to achieve
 Meet the needs and wants of their target market
 Give their product a competitive edge

 SECOND - Channel members:

– Selection
– Management
– Motivation
– Evaluation
Determine the types of members the belong in the channel, as well as the
channel length (total number of channel members)
 Usually based on the nature of the product
 Factors to consider:
 Create product value that others cannot or are not willing to provide
 Channel the product to its desired market
 Have a pricing and promotion strategy compatible with the product’s
needs
 Offer customer service compatible with the products needs
 Be willing and able to work cooperatively with other members within
the product’s channel
 Determining channel responsibilities
• Members must work together appropriately and perform the tasks they
are best suited for

 The company must sell not only through the intermediaries but also
to/with them
 Develop a cooperative/collaborative and balanced relationship with the
partner
 Understand the partner’s customers – their needs, wants, and demands
 Understand the partner’s business – operationally and financially and
what’s really important to them
 Look at the partner’s needs in terms of customer support, technical
support, and training
 Establish clear and agreed upon expectations and goals
 Develop recognition programs focusing on the partner’s contributions
 Build internal support systems and dedicate resources to the partner
Produces must evaluate intermediaries performance against such standards as:
 Sales quota attainment

 Average inventory levels

 Customer delivery time

 Treatment of damaged and lost goods

 Cooperation in promotional and training programs.

Should constantly evaluate the channel:

 What is working?

 What is not working?

 What can be improved?

 BIBLIOGRAPHY

 Krishna k Harvadkar & Cavale, McGraw Hills, 2017 : Sales and distribution
management

 Cundiff, Still & Govoni : Sales Management and Decision, strategies & cases