Page 208 - DMGT408DMGT203_Marketing Management

Unit 9: Managing Marketing Channels

output level, establishing objectives and constraints; identifying major channel alternatives and Notes
evaluating major channel alternatives.

Figure 9.1: Channel Design Decisions

Analysis of Customer's Desired Service Output Levels

Establishing Channel Objectives

Identifying Major Channel Alternatives

Evaluating the Major Alternatives

Analyze Customer’s Desired Service Output Levels

It is a difficult task to analyze the customer’s service output level because of two reasons, viz. the
expectations of each segment will vary from one another and second, the product-market situation
will vary for each of the market segments. The marketer needs to understand the service output
levels desired by the target customers. Each of the channels produces five different kinds of
service output levels.
The first service output issue is the lot size that the channel permits a customer to purchase on
every occasion. Many wholesalers buy larger lots whereas in retail buying, the customer prefers
single unit lot size. The second service output level is the average waiting time of the customer.
It is the time that the customer has to wait to receive the desired product from the channel.

Did u know? In the past, customers had to wait for more than six months for getting a Bajaj
scooter. Today’s the customer has no patience and would like to buy products through
faster delivery channels. The degree to which the channel facilitates customers to purchase
the product is called ‘spatial convenience’. Today it is easy to buy a Hero Honda motorcycle
as they have a wider distributor channel covering many suburban centers. The number of
products in each product line and variety of sub brands available in the marketing channel
helps the customers prefer a channel with larger assortments. Customers will prefer
channels, which provide them multiple services like financing and credit, faster delivery,
installation, repair and maintenance. The greater the service back up; the higher is the
chance of preference of the channel by consumers.

Establishing Objectives and Constraints

After analyzing the service output level expectation of consumers, the next task is to establish
the objectives and constraints. The channel objectives should be explained in terms of desired
service output expectations from each of the channel members. The channel members should be

LOVELY PROFESSIONAL UNIVERSITY 201