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Establish the Channel Objectives

13 May, 2016 - 13:23

The channel plan is derived from channel objectives. They are based on the requirements of the purchasers and users, the overall marketing strategy, and the long-run goals of the corporation. However, in cases when a company is just getting started, or an older company is trying to carve out a new market niche, the channel objectives may be the dominant objectives. For example, a small manufacturer wants to expand outside the local market. An immediate obstacle is the limited shelf space available to this manufacturer. The addition of a new product to the shelves generally means that space previously assigned to competitive products must be obtained. Without this exposure, the product is doomed.

As one would expect, there is wide diversity of form that channel objectives can take. The following areas encompass the major categories:

  • Growth in sales by reaching new markets, and/or increasing sales in existing markets.
  • Maintenance or improvement of market share—educate or assist channel components in their efforts to increase the amount of product they handle.
  • Achieve a pattern of distribution—structure the channel in order to achieve certain time, place, and form utilities.
  • Create an efficient channel—improve channel performance by modifying various flow mechanisms.