How should marketing channels be defined.....what points are to be kept in mind.....importance of customer in the whole process

1. How should channels be designed ?

2. ANALYZING
CUSTOMER NEEDS
AND WANTS
1

3. LOT SIZE : The number of units the channel permits a typical
customer to purchase.

4. WAITING AND DELIVERY TIME : Average time the customer waits for
the receipt of goods.

5. SPATIAL CONVENIENCE :The degree to which the marketing channel
makes it easy for customers to purchase the product. Toyota offers better
spatial convenience than Lexus because it has more dealers.

6. PRODUCT VARIETY :The assortment provided by the marketing channel.

7. SERVICE BACKUP :Add-on services(credit,
delivery, installation, repairs) provided by the channel.

8. ESTABLISHING OBJECTIVES AND
CONSTRAINTS
2

9. The objective is to maximise the profit, minimise the costs and still provide
desired levels of service.

10. Designed to fuel excitement for the brand, Apple lets people touch their
products. They target tech-savvy customers with in-store product
presentations and workshops.

11. IDENTIFYING MAJOR
CHANNEL
ALTERNATIVES
3

12. TYPES OF INTERMEDIARIES
An electronic company that produces satellite radio sells it to automobile
manufacturers, through a direct sales force or distributors or company
stores or online retailers or mass merchandisers.

13. NUMBER OF INTERMEDIARIES
Three strategies based on the number of intermediaries are exclusive
distribution, selective distribution and intensive distribution.

14. Exclusive distribution means severely limiting the number of intermediarie

15. Selective distribution relies on only some of the intermediaries willing to
carry a particular product.

16. Intensive distribution places the goods or services in as many outlets as
possible.

17. TERMS AND
RESPONSIBILITIES OF
CHANNEL MEMBERS
Each channel member must be treated respectfully and given the
opportunity to be profitable.

18. Price Policy calls for the producer to establish a price list and schedule of
discounts and allowances.

19. Conditions of sale refers to payment terms and producer guarantees.

20. Distributors territorial rights defines the distributors territories and
the terms under which the producer will enfranchise other distributors.

21. 4
EVALUATING
MAJOR
CHANNEL
ALTERNATIVE
S

22. ECONOMIC CRITERIA : Each channel alternative will produce a different
level of sales and profits.

23. CONTROL AND ADAPTIVE CRITERIA : Using a sales agency may
pose a control problem.

24. Created by NILESH RANA of IIT BHU under the guidance of
Prof. SAMEER MATHUR , IIM LUCKNOW
www.iiminternship.com
Thank you !