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Channel Design and Gap Analysis


Overview of a five step approach for conducting a channel gap analysis.

Overview of a five step approach for conducting a channel gap analysis.

Published in Business , Technology
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  • 1. Channel Design and Gap Analysis Overview
  • 2. The marketing channel challengeinvolves… 1. Understanding gaps in your channel design. 2. Adjust or re-design 3. Monitor performance of channel members
  • 4. Step 1 - Segmentation • Define and profile service output demands (SOD) by segment. – Value added services performed by your channel members • Identify environmental characteristics and constraints – Limited infrastructure, government constraints, economic, technological
  • 5. Step 2- Positioning • Position yourself in the channel (know your strengths / weaknesses) • Which segments are a good target (channel resources are limited) – Segments must be profitable, accessible, actionable and measurable
  • 6. Step 3 - Targeting • Knowing what segments to ignore in one’s channel design and where to apply managements effort. • Focus on key segments that reap the profitable sales. • Be aware of – Managerial bounds – Environmental bounds – Competitive benchmarks
  • 7. Step 4 (a) and (b) – Establish new or refineexisting channels • Gap analysis – Demand side – Supply side
  • 8. Gap Analysis • What gaps in the service outputs of the ideal, existing, and management bounded distribution systems should the firm try to eliminate? • Figure 7.3 identifies three situations that require corrective action. Source: (Stern, Sturdivant and Getz, Accomplishing Marketing Channel Change: Paths and Pitfalls, 1987)
  • 9. Figure 7.3 Gap Analysis in Distribution System Design Management Bounded Distribution Existing Situation A: Strategic Fit System Distribution System Ideal Distribution System Interpretation: Any distribution related problems result from poor execution, not poor design of the system. Necessary Actions: Sharpen performance; maintain existing system.
  • 10. Figure 7.3 Gap Analysis in Distribution System Design Management Situation B: Partial Fit Bounded System Ideal Gap Distribution Existing System Distribution System Interpretation: Management has designed a system which reflects its needs, but has given inadequate attention to customer needs. Necessary Actions: Investigate validity of management constraints and objectives, and analyse customer requirements and expectations.
  • 11. Figure 7.3 Gap Analysis in Distribution System Design Situation C: Complete Misfit Existing Gap Management Gap Ideal Distribution Bounded Distribution Distribution System System System Interpretation: End-user satisfaction can be improved by improving service outputs. Preferred Actions: Examine certain management criteria to assess the possibility of bringing the existing systems even closer to the ideal distribution system.
  • 12. Step 5 – Channel Implementation • Communicate changes and improvements • Identifying power sources • Identifying channel conflicts and resolve • Coordinate, Control and manage relationships with channel partners.
  • 13. Summary• Its important to review your distribution channels• Identify gaps and close them• Monitor and control your relationships• Conduct periodic gap analaysis
  • 14. You are welcome to contact Nigel Bairstow at B2BWhiteboard your source of B2B Asia / Pacificmarketing advice!/b2bwhiteboard