Service Output Demands and Sales Channel Design

Channel design is a crucial element in any product’s marketing plan. It is sometimes the most crucial factor for success. A channel designed properly will bring in customers and increases your market share. Most of the times a channel is designed by the marketing teams and the structure and the maintenance is done by the operations teams.

A channel delivers service output demands. Some of the examples of service output demands are: bulk breaking, spatial convenience, waiting time, delivery time, payment options such as credit,  assortment/variety and customer service and information provision.

Step 1: Segment the consumer/customer segments based on service output demands (SODs)

Step 2: Identify some of the consumer/custoemr segments

Step 3: Design a zero base optimal channel such that the SODs are satisfied. The channel can have multiple routes through which the SODs are satisfied

Step 4: Gap Analysis

If an existing channel is present, then compare the zero base channel with the existing channel and come up with the gaps. Evaluate whether these gaps are caused due to demand or supply.

The attached word document contains one such exercise for HUL. HUL_ChannelAudit