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

1. Channel Design and Gap Analysis
Overview

2. The marketing channel challenge
involves…
1. Understanding gaps in your
channel design.
2. Adjust or re-design
3. Monitor performance of channel
members

3. FIVE STEP CHANNEL ANALYSIS

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 refine
existing 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 B2B
Whiteboard your source of B2B Asia / Pacific
marketing advice
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