Designing channel systems
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The document discusses the stages in channel planning which includes segmentation, positioning, and focus. It defines segmentation as clustering customers based on their expectations, positioning as defining the channel elements to service each segment, and focus as deciding which segments to address. The document also discusses defining customer needs based on expected service levels, defining channel objectives to support customer service, and considering the cost and alternatives of channel systems.
Designing channel systems
- 1. Designing a suitable channel system will require defining the customer needs, clarifying the channel objectives, looking at alternative systems which can meet these objectives, cost of the channel and finally evaluating the various alternatives to tone in on the ideal channel system.
- 2. Stages in Channel Planning Segmentation:- It is the cluster of customers on the basis of what each segment expects out of the channel. Positioning:- It defines the channel element which is required to service each of the segments. Segmentation Positioning Focus Development
- 3. Stages in Channel Planning ï‚— Focus:-The sales manager decides only the segments that need to be addressed. ï‚— Developing the right channel alternative: Selecting the best from the set of alternatives available
- 4. Defining the Customer Needs Customer needs are defined by the customer service levels expected out of channel system Service levels are: ï‚— Lot size ï‚— Waiting time ï‚— Choice to the consumer ï‚— Place utility ï‚— Service support
- 5. ï‚— Defining Channel Objectives: Channel objectives are simply what the channel system is expected to do to support customer service. ï‚— Cost of the channel system: 1. No. of intermediaries 2. Current intermediaries ï‚— Hybrid Channels: Companies where some parts are managed by the company itself and some others are handled by intermediaries.