Defining the Channel Objectives and Constraints

Channel objectives should be stated in terms of the desired service level of target customers. Usually, a company can identify several segments wanting different

levels of channel service. The company should decide which segments Co serve and the best channels to use in each ease. In each segment, the company wants to minimize the total channel cost of supplying customers, while also meeting their service requirements.

The company's channel objectives are also influenced by the nature of its products, company policies, marketing intermediaries, competitors and the environment. Product characteristics greatly affect channel design. For example, perishable products require more direct marketing to avoid delays and too much handling. Bulky products, such as building materials and soft drinks, require channels chat minimize shipping distance and the amount of handling.

Company characteristics also play an important role. For example, the company's size and financial situation determine which marketing functions it can handle itself and which it must give to intermediaries. Furthermore, a company marketing strategy based on speedy customer delivery affects the functions that the company wants its intermediaries to perform, the number of its outlets and the choice of its transportation methods.

The characteristics of intermediaries also influence channel design. The company must find intermediaries that are willing and able to perform the needed tasks. In general, intermediaries differ in their abilities to handle promotion, customer contact, storage and credit. For example, manufacturers' representatives who arc hired by several different firms can contact customers at a low cost per customer because several clients share the total cost. However, the selling effort behind the product is less intense than if the company's own sales force did the selling.

When designing its channels, a company must also consider its competitors' channels. In some cases, a company may want to compete in or near outlets that carry competitors' products. Thus companies may want their brands to be displayed next to competing brands: in town or city centres. Burger King wants to locate near McDonald's; Pizzaland wants to be sited near Pizza Hut; Sony, Panasonic and Philips audio-video systems all compete for floor space in similar retail outlets; Nestle and Mars confectionery brands want to be positioned side by side, and aggressively compete for shelf space, in die same grocery outlets.

In other cases, producers may avoid the channels used by competitors. Avon, for example, decided not to compete with other cosmetics makers for scarce positions in retail stores and, instead, set up a profitable door-to-door selling operation in the home and overseas markets.

Finally, environmental factors, such as economic conditions and legal constraints, alfect channel design decisions. For example, in a depressed economy, producers want to distribute their goods in the most economical way. using shorter channels and dropping unnecded services that add to the final price of the goods. Legal regulations prevent channel arrangements that may lessen competition substantially or create a monopoly. In countries where governments are actively encouraging free competition, such regulatory restrictions have helped to keep competitive channels open, as in the case of telecommunications in the United Kingdom, where companies such as Cable & Wireless, lonica and the privatized BT exist in parallel co supply telephone services.

An effective channel strategy is based on creating a differential advantage which allows the firm to compete successfully in its target markets. Consequently, the channel or channels selected must have the knowledge and experience not only to serve these segments effectively, hut also to support and sustain the manufacturer's competitive advantage. The European construction machinery maker JCB recognized that its early problems in the French market were due to the inadequacies of its distribution outlet. It used manufacturers' agents to sell its equipment in France. These agents sold the products, but were

not capable of providing the service facilities essential for competitive success in the market. JCB subsequently set up a company-owned full-service distribution network which was sufficiently competent to communicate the company's product advantages and provide the value-added services expected by customers.

Direct marketing

Marketing through •variant* adttertisinfi UK din that interact directly 'with consumers, generally calling for [he cortsiimer to make a direct response.

Broker

A wholesaler who does not lakt; tide to goods and whose Junction is to luring buyers and sellers together and assist in negotiation.

Agent

A wholesaler who represents buyers or sellers on n relatively permanent basis, performs only a few functions, and does not take title to goods.

Intermediaries

Distribution channel firms tluit help the company jttnd customers or make sates to them, including wholesalers and retailers that buy and resell goods.

wholesaler

Afinn engaged primarily in selling gowls and services to those buying for resale or business use.

full-service wholesalers

Wholesalers chiit provide a fu!I set of services such as carrying stuuk, using a sales force, offering credit, muking deliveries and providing management axs is tanve.

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Readers' Questions

  • Simone
    When setting channel objectives, companies should state the objectives in terms of __________.?
    12 months ago
  • measurable outcomes
    • sago
      What is the objective of marketing channel?
      1 year ago
    • The objective of marketing channels is to get products from the manufacturer to the end user as efficiently and effectively as possible. This includes all the steps required to move a product from the point of origin to the point of consumption. It is a network of activities and organisations that are involved in making a product or service available for use or consumption by the consumer or business user.
      • eustorgio
        How channel objective affect channel design?
        1 year ago
      • Channel design is heavily impacted by the channel's objective. For example, a channel that is designed to generate leads would have a design that focuses heavily on lead capture and conversion optimization. This might include features such as call-to-action buttons, form fields, and signup pages prominently displayed. Conversely, a channel designed for brand awareness would have a design that emphasizes the promotion of the brand and content, such as a strong header and visuals, multiple calls-to-action, and showcase sections for key products. Both channels would have very different designs based on the objective.
        • Leonie Drechsler
          What is defining channel objectives?
          1 year ago
        • Channel objectives define the goals and strategies for a business’ marketing campaigns across different channels such as email, search engine optimization (SEO), social media, and advertising. By setting objectives for each channel, a business can ensure that its marketing efforts are focused on achieving its desired results. These objectives include increasing sales, driving customer engagement, and creating brand awareness. They also help a business measure the success of their efforts, so they know what works and what needs to be changed.
          • juuso
            What are constraints in case of channels selection?
            1 year ago
            1. Budget: The amount of money available to invest in a channel selection strategy is a common constraint.
            2. Time: Available resources and timelines to implement a channel selection strategy will affect which communication channel can be utilized.
            3. Audience: Different channels reach different types of audiences, so any limitations in terms of the target customer will need to be taken into consideration when selecting a channel.
            4. Data: Accessible data points to inform the decision-making process may be limited, resulting in a need to make educated guesses.
            5. Platforms: Many platforms have restrictions on the type of content and advertising that can be published or displayed. These constraints will affect which channels can be used.
            • TEIJA AHOKAS
              What are the objectives of channel design decisions?
              1 year ago
              1. To identify the most effective communication channels for reaching the target market.
              2. To develop a comprehensive and cohesive channel strategy to optimize costs and maximize customer service.
              3. To ensure that the channels are aligned with the overall marketing objectives and strategies.
              4. To ensure effective coordination of resources between all channel partners.
              5. To create a flexible structure that is able to adapt to changing market conditions.
              6. To select and manage channel partners who will provide consistent and reliable performance.
              7. To monitor performance and make adjustments to the channel strategy as needed.
              • Celendine
                What are the objective of major channel?
                1 year ago
              • The primary objectives of major channels are to raise brand awareness, increase sales, drive customer engagement, build customer loyalty, and boost profits. They also seek to create a lasting relationship between the brand and their customers. Additionally, major channels may also focus on expanding their reach, targeting new audiences, and staying competitive with other brands in the same field.
                • Mike
                  What ojective would a marketer consider in designing marketing channel?
                  1 year ago
                • A marketer would consider a number of objectives in designing marketing channels, including:
                  1. Maximizing the efficiency of the distribution process
                  2. Minimizing costs associated with marketing channels
                  3. Ensuring the availability of goods and services in the right locations at the right times
                  4. Maximizing customer convenience
                  5. Establishing communication links between marketing channels
                  6. Establishing relationships with channel members
                  7. Ensuring high customer service levels
                  8. Facilitating the flow of information and goods among channel members
                  9. Developing a competitive advantage through better use of marketing channels.
                  • Anna
                    What is channnel objective?
                    1 year ago
                  • Channel objectives are goals set by a company or brand to measure the effectiveness of their marketing activities on different communication channels (eg, social media, email, websites). They help to direct strategies and activities to reach the desired audience in order to generate the most impactful results.
                    • laila
                      When setting channel objectives, companies should state the objectives in terms of ______.?
                      1 year ago
                    • measurable goals
                      • jesse
                        What is chanel objectives?
                        1 year ago
                      • The objective of Chanel is to create a lifestyle brand that captures the unique spirit of the Chanel heritage. This includes offering high-quality, luxury goods that embody classic design and timeless style, as well as continuing to innovate and create new products and experiences that appeal to a contemporary market. The company's mission is to continue to bring timeless beauty and elegance to the world through its products, fashion shows, and creative events.
                        • Kati
                          What is your major constraint of channel in marketing?
                          1 year ago
                        • The major constraint of channel in marketing is having too many channels that can be difficult to manage. Additionally, if the channels are not managed properly, it can lead to an inconsistent customer experience across channels. Additionally, it is difficult to create effective content for each channel and to ensure that the content resonates with each audience. Finally, it can be expensive to manage multiple channels and to ensure they are optimized for the best results.
                          • Alvaro
                            What are the objectives and constraints in marketing channels?
                            1 year ago
                          • Objectives of marketing channels include: 1. Maximizing customer reach and penetration 2. Minimizing cost and improving efficiency 3. Building relationships with customers 4. Enhancing customer service Constraints in marketing channels include:
                            1. Limited availability of resources
                            2. Geographic boundaries
                            3. Time constraints
                            4. Competition
                            5. Regulatory issues
                            6. Complex distribution channels
                            • abela
                              What are the channel contraints?
                              1 year ago
                            • Channel constraints are the limitations that are imposed on a communication channel in order to ensure optimal performance. These constraints can be due to physical limitations, such as bandwidth, noise, and transmission speed, or they can be due to regulatory limitations, such as spectrum licensing or interference regulations. These constraints must be taken into consideration when designing any communication system.
                              • danait
                                What is chanel design with example?
                                1 year ago
                              • Chanel is a French luxury fashion house, originating in 1909 and known for its haute couture designs and high-end fashion accessories. Some popular examples of Chanel's designs include the classic quilted flap bag, the Chanel suit, and the two-tone ballerina flats. Chanel is also well-known for its use of quilting, camellias, double C logos, pearls, and interlocking CC symbols.
                                • carita enestam
                                  How do company resources influence distribution channel design?
                                  1 year ago
                                • Company resources have a huge influence on distribution channel design because they determine the level of resources and financial investments a company can make. With limited resources, companies may need to use fewer intermediaries or lower margins to make up for the lack of resources. On the other hand, companies with larger resources can afford to invest more into distribution channels and use multiple intermediaries, making channels more complex. Resources also determine the extent of promotions and advertising a company can do to reach its target audience.
                                  • Peter
                                    What is channel objectiies?
                                    1 year ago
                                  • Channel objectives are statements of the desired outcomes or goals that an organization intends to achieve through its marketing activities or campaigns. They are a way to measure the effectiveness of a brand's strategy, ensure consistency among its messaging, and align its marketing efforts with its overall business goals. Channel objectives help define what success looks like and serve as a metric by which to measure the effectiveness of communication efforts. Examples of channel objectives may include increasing online sales, generating leads, driving traffic to brick-and-mortar stores, or increasing brand awareness.
                                    • TOM
                                      What is the definition of channel objective?
                                      1 year ago
                                    • Channel objectives are the strategic goals set for a particular marketing channel. They outline the desired results that a company wishes to achieve by using the channel to target customers and ultimately drive sales. Examples of channel objectives might include increasing brand awareness, expanding market share, engaging existing or potential customers, and increasing customer loyalty.
                                      • Valdemar
                                        What are the objectives of distribution channels?
                                        1 year ago
                                        1. To create awareness of the product and its availability.
                                        2. To ensure convenient access to the products for customers.
                                        3. To maximize the profit potential for both suppliers and distributors.
                                        4. To regulate the flow of goods and services from producer to consumer.
                                        5. To provide feedback from customers to producers and distributors.
                                        6. To manage promotional activities to maximize the reach of the product.
                                        7. To customize services to meet the needs of individual customers.
                                        8. To reduce costs of production and distribution.
                                        9. To provide permanent, reliable and secure inventory storage.
                                        10. To provide logistics services for product delivery.
                                        • guy
                                          When company seeks to set objectives for channel,a series of factors influence channel design?
                                          1 year ago
                                          1. The strategic objectives of the company: This involves considering factors such as positioning in the market and overall corporate growth.
                                          2. Channel participant goals: The organization should consider what each channel participant wants to get out of the relationship. This includes such objectives as profitability, growth, and return on investment.
                                          3. Channel segment objectives: Companies must consider whether their channel design meets the needs and requirements of their customer segments.
                                          4. Channel capabilities: The organization should assess the capabilities of its channel members. This includes the resources, capabilities, and capabilities needed to support the design.
                                          5. Cost: Companies must consider the cost of establishing and maintaining a channel. This includes the cost of merchandise, marketing, labor, and technology.
                                          6. Risk: Companies must consider the risk associated with the channel design. This includes the risk of customer dissatisfaction, liability, and intellectual property infringement.
                                          7. Regulatory environment: Companies must consider the regulatory environment when establishing a channel. This includes the potential for litigation and compliance with relevant regulatory agencies.
                                          • aija
                                            What is channel objectives and constraints in marketing?
                                            1 year ago
                                          • Channel objectives are the goals that a company has for the strategies it chooses to market its product. These objectives must be measurable, attainable, and relevant to the goal of increasing product sales. Common objectives may include increasing brand awareness, increasing market share, generating leads, creating loyalty and trust, and developing long-term relationships with customers. Channel constraints are the restrictions that are placed on different sales channels as a part of the overall marketing strategy. These constraints can include budget and time limitations, geographical considerations, and regulations or policies of sales channels. They limit the options that the company can choose to market its product, thereby forcing it to focus its efforts on those channels that will be the most cost-effective and successful in reaching its target audience.
                                            • sophia
                                              What are channel objectives?
                                              1 year ago
                                            • Channel objectives are the specific goals and objectives set by businesses and organizations that define how a channel partner should promote, sell, and support the company's products or services. They are tailored towards enhancing the company-to-customer relationship and ultimately increasing sales and profits. These objectives range from setting sales targets, forming strategic alliances with other partners, creating loyalty programs, managing customer relationship initiatives, and developing marketing campaigns.
                                              • Elena
                                                How to set the objectives and constraints to the company?
                                                1 year ago
                                              • Objectives: 1. Increase sales revenue 2. Improve customer satisfaction 3. Increase market share 4. Increase operational efficiency 5. Improve employee morale 6. Maximize profits Constraints:
                                                1. Limited resources
                                                2. Limited budget
                                                3. Time limits
                                                4. Competition
                                                5. Regulatory requirements
                                                6. Organizational culture and structure
                                                7. Technological limitations
                                                • Matthew
                                                  What is to setting channel objective and constraints?
                                                  1 year ago
                                                • Setting channel objectives and constraints is the process of defining the goals and limits of a communication channel. This involves establishing metrics and parameters for evaluating channel performance, as well as outlining the acceptable level of risk associated with the channel. It also involves setting policies and procedures for the flow of communication and access to information. The process of setting objectives and constraints helps to create an effective, organized channel that can efficiently reach its intended audience.