Channel Design

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.

Factors to be considered while making Channel Design Decision

Channels need to be adopted depending on the target segment and positioning. The goals of the channel members may differ. The alternatives are numerous.

Components of the Channel Design Decisions

The number of channels to employ. The number of levels to include in each channel. The type of intermediaries to employ. The number of intermediaries at each level.

Channel Design Strategies

An efficient distribution channel can be planned through four steps: 1. Specifying the role of distribution channel. 2. Selecting the type of channel (Direct/Indirect) 3. Determining the intensity of distribution.
Intensive, Selective or Exclusive

4. Choosing Specific Channel Members

Factors Affecting Choice of Distribution Channel

Market Considerations
Type of Market (Consumer or B2B) Place Utility Number of Potential Customers and their preferences Geographic Concentration of the Market Order Size Competition

Product Considerations
Unit Value/ Value to weight ratio Perishability Technical nature of the Product

Factors Affecting Choice of Distribution Channel

Middlemen Considerations
Service Provided by Middlemen Availability of desired middlemen Attitude of middlemen towards producers policies.

Company considerations
Desire for channel control Service provided by seller Ability of management Financial Resources

Types of Channels
Direct Marketing (or Zero Level) Indirect Marketing
One Level Two Level Three Level Four Level

Types of Distribution within Channel

Intensive Selective
Exclusive

Key Issues in Determining Channel Requirements

Product Proliferation and Dynamics Total Quality Initiatives

Thank You