Channel Design Decisions

Now we look at different channel decisions manufacturers' face. Manufacturers struggle among what is ideal and what is practical, in designing marketing channels. A fresh firm with limited capital generally starts by selling in a restricted market area. Deciding on the best channels may not be a problem: The problem may easily be how to prove to one or a few good intermediaries to handle the line.

 If successful, the new firm may branch out to new markets by the existing intermediaries. In smaller markets, the firm may directly sell to retailers; in big markets, it may sell through distributors. In one of part of the country, it may grant exclusive franchises; and in another, it may sell through all of available outlets.  In this way, channel systems frequently evolve to meet market conditions and opportunities. For maximum effectiveness, however, decision making and channel analysis should be more purposeful. In designing a channel system calls for analyzing consumer service requirement, setting channel objectives and constraints, recognizes major channel alternatives, and evaluating them.