Channel Design

Topics: Marketing, Marketing plan, Pricing Pages: 9 (2974 words) Published: April 26, 2013
In putting up a business, there are a lot of things to be planned and developed; from the generation of product ideas to be offered for sale or services to be rendered to the public, the price to set for those products/services, the ways of promoting your business and the convenient place where to access the products that will be offered to the public. All businesses in this world are a foundation of the four most important things which are the product, price, promotion and place or what they call the marketing mix. These four P’s are an integral part of the business because it serves as a tool in building an effective marketing strategy and implementing it with tactics. 

First, a businessman should know what product he will offer. A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Secondly, after determining what product or service to proffer, he should set up a competitive price for it. Of course this one is important it determines the company's profit and hence, survival. The promotion of this product will be the next thing to be considered. Promotion will help a lot in mounting up your sales and this is needed for your product to be known in the market. Lastly, the place or the channels of distribution. A product should be offered in a convenient place where the buyers will have easy access to those products or services.

Today, a lot of ways of distributing the products to the buyers for consumption are being developed. Businesses are establishing channel design or decisions associated with forming new or altering existing channels. But some companies do not have the right structure for the distribution of the products that result to ineffective access of consumers to the products that they need and want. So now there are a number of studies about the structure of these channels or what they call the channel design to have an explanation to some issues regarding the ability of the channel to effectively reach the right customers at the right time with the right solutions.

The distribution channels used (and the products/services produced) is a company's attempt to ensure they win profitable customer business, both now and in the future. Channel and product/service preferences provide a crucial input into segmentation but in a supportive role rather than a determining role. PROBLEM

While the commercial performance of different forms intensifies and the diversity of retail objects increases, marketing channels become more sophisticated and their management becomes more complicated. This situation determines the need for bigger attention to channel administration and the assessment of their effectiveness when analyzing possible alternatives of distribution of the production to the end user. Because of that, industrial enterprises encounter the problem of formation of effective structure of marketing channel and that leads to the necessity of continuous searching for new possibilities how to modify the structure and the segmentation of the channels. 1. Why do multiform marketing channel exist?

Many producers of products and services do not sell directly to their end users. They use a marketing channel. In its most simplistic form, a marketing channel performs the work of moving goods from producers to consumers.

As noted, distribution channels often require the assistance of others in order for the marketer to reach its target market. But why exactly does a company need others to help with the distribution of their product? Wouldn’t a company that handles its own distribution functions be in a better position to exercise control over product sales and potentially earn higher profits? Also, doesn’t the Internet make it much easier to distribute products thus lessening the need for others to be involved in selling a company’s product?

While on the surface it may seem to make sense for a company to operate its own...
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