“The Target

Market and
Channel Design
Strategy”
Antonette E. Mallari
 INTRODUCTION

• Of all the variables that affect the design of the

marketing channel, marketing variables are the
most fundamental.

• The needs and wants of the market being

targeted by the channel manager should shape
the design of the firm’s channels.

• Market channel design should be market driven.

• Market channel strategy should be market
driven so as to meet as closely as possible the
demands of the firm’s target market.

• The channel manager should be familiar with

several dimensions of the market as they relate
to the design of the market channel.

Market Driven Channel

Factors to consider when analyzing markets

 MARKET GEOGRAPHY

 MARKET SIZE

 MARKET DENSITY

 MARKET BEHAVIOUR

F O R
ORK
ME W Y S I S
F RA N AL
A ET A
A RK
M
 MARKET GEOGRAPHY AND CHANNEL
DESIGN STRATEGY

• Market geography refers to the geographical extent of

markets and where they are located.

The channel manager should ask the question of:

• What do our markets look like geographically?
• How distant are our markets?

• The concern is with the market geography

• The channel manager is charged with the task of
evaluating market geography relative to channel
structure to make sure that the structure is able to
serve markets effectively and efficiently.
• Changing locations as a result of expanding
geographical boundaries of the existing markets or
opening up of new markets should signal the channel
manager that modifications in the channel structure
may be needed.
 Channel manager delineates geographical
locations of target markets by using a
combination of the following:

1.The data from chamber

of commerce for
geographical entities
such as districts,
regions/divisions, towns.

LOCATING
 MARKET SIZE AND CHANNEL
DESIGN STRATEGY

Market size refers to the

number of buyers or
potential buyers (consumer
or industrial) in a given
market.
• Market density refers to the
number of buyers or
potential buyers per unit of
geographical area.

• The channel manager

should understand the
efficient congestion of the
market.

MARKET DENSITY AND CHANNEL

  The opportunity to achieve a high
level of customer access at low cost
is higher in dense markets than in
more dispersed ones.

 Manufacturers of a wide array of

products seek out distributors and
retailers that operate in dense
markets

MARKET DENSITY & CHANNEL STARTEGY

MARKET BEHAVIOUR AND
CHANNEL DESIGN
STRATEGY
Market behaviour consists of four
subdimensions:
1. When the market buys

2. Where the market buys

3. How the market buys

4. Who buys
 WHEN THE MARKET BUYS

1. Variations create peaks & valleys in the

manufacturer’s production schedule.
2. He or she should attempt to select channel
members who are in tune with these changing
patterns.
WHERE THE MARKET BUYS
The manager should know
where customers generally buy
particular types of products
The manager should know
whether these patterns may be
changing.
 HOW THE MARKET
1. Large QuantitiesBUYS

2. Self-service

3. One-stop shopping

4. Impulsive Buying

5. Cash

6. Shopping at home

7. Expending substantial
effort through comparison
shopping

8. Demanding extensive
service
 WHO
BUYS
Who makes the physical purchase?
Affects the type of retailers chosen in the
consumer market
May influence the kinds of channel
members used to serve industrial
markets
Who decides to make the purchase?
In context of family unit at consumer
level
Buying centers at industrial level
THANK YOU!