Channel design

marketing channel design

1. APPA INSTITUTE OF ENGINEERING & TECHNOLOGY DEPARTMENT OF MBA PRESENTATION ON CHANNEL DESIGN SUBMITTED TO: Prof.Basavaraj S M SUBMITTED BY : Mahesh PATIL

2. Channel design

3. Meaning of channel design Channel design decisions are critical because they d etermine a product’s market 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 prices or promotion than to change marketing channels.

4. Dimensions of channel design

5. Dimensions of channel design Market dimensions Company dimensions Environmental Dimensions Product dimensions Intermediary Dimensions Behavioural dimensions

6. Market dimensions: It focuses on customer( market) orientation. In developing and adapting the marketing mix, then, marketing managers should take their basic cues from the needs and wants to the target markets at which they are aiming. Four basic sub categories of market variables are particularly important in influencing channel structure. They are: M arket geography M arket size Market density Market Behaviour

7. 2 . Product Dimension: Product variables are another important category to consider in evaluating alternative channel structures. Some of the most important product variables are as follows: B ulk and weight P erishability Unit value T echnical versus non- technical Newness

8. 3. Company dimensions: The most important company variables affecting channel design are: size Financial capacity Managerial Expertise Objectives and Strategies

9. 4. Intermediary Dimensions: The key intermediary variables related to channel structure are: Availability. Cost Services

10. 5. Environment dimension: Environmental variables may affect all aspects of channel development and management. Economic, sociocultural , competitive, technological, and legal environmental forces can have a significant impact of environmental forces is one of the more common reasons for marketing channel design decisions.

11. Process of channel design Defining the customer needs Defining the channel objective Channel alternatives Evaluation of major alternatives Ideal channel structure

12. Defining the customer needs: In designing the market channel, the marketer must understand the service output levels its target customer want. It is essential to capture customer requirements while designing marketing channel. It includes the following:

13. P roduct information Product customization Product quality assurance Lot size Product variety Spatial convenience / availability Waiting and delivery time After sales service Logistics

14. 2. Defining channel objective: The channel objective vary with product characteristics: Perishable products requires more direct marketing. Bulky products, such as building materials, require channels that minimize the shipping distance and amount of handling. non- standard products, such as custom-built machinary 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.

15. 3 . Channel alternative: A company looks at alternatives for its distribution channel after it has decided on the targeted customers and the customer service deliverables it desires from its channel partners to reach these customers. At the time of deciding the company will scan for: Type of intermediaries Distributors or re-distribution stockist Carrying and forwarding agents Logistics service providers. manufacturer’s agents, stockist, guarantors Financing agencies Wholesalers and semi wholsalers Retailers and service centres.

16. Number of intermediaries. cost of the channel system. Terms and responsibility of channel members.

17. 4 . Evaluation of major alternative: The major problem before the producer is to decide which of the alternatives would be best satisfy the long term objectives of the firm taking in view the factors which would affect the channel decision. For this purpose, each alternative must be rated against economic; control and adequate criteria: E conomic Criteria C ontrol Criteria Adaptive Criteria

18. 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 choose the best among them.

19. Criteria for effective channel design The following criteria should be considered: E ffectiveness Efficiency Equity Scalability Flexibility

20. Channel design decision Selecting the channel member. Identity of the channel partner at each channel level. Type of channel member .

21. THANK YOU...!!!