Channel design decisions

Designing a channel systems calls for analyzing customers needs, establishing channel obejectives, identifying the major channel alternatives and evaluating them.

Analyzing service output levels desired by customers understanding what, where, why, and how target customers buy the first step in designing the marketing channel produce five service outputs:-

a)lot size:- the lot size is the number of units that the marketing channel permits a typical customers to buy on a buying occasion. The smaller is the lot size, the greater the service output level that the channel must provide.

b)Waiting time:- waiting time is the average time that customer of That channel wait for receipt of the goods. Customers normally prefer fast delivery Channels. Faster service requires a great service output level.

c)special convenience:- special convenience expresses the degree to which the marketing channel makes it easy for customers to purchase the product.

d)product variety:- product variety represents the assortment breath provided by the marketing channel. Normally customers prefer greater Assortment breadth because it increases the chance of exactly meeting their need.

e)service backup:- service backup represents the add-on service (credit,delievery, installation, repairsI) provided by the channel. The greater the service. backup, the greater the work provided by the channel.

The marketing manager must know the service output desired by the target customers provided increased levels of service output means increased costs for the channel and higher prices for customers.

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