1. Chapter 4 Principle & Process of Channel Design

2. Case Study Hongguang Company was initiated by three yong men who had contracted an old machine factory.The price of its baby carrier “Kukuzai” is 20%-30% higher than others in the industry.It covers more than 35% market with a high pricing strategy.Now the company extends its product category to the children’s apparel.Compared with the “Kukuzai”baby carrier,‘”Kukuzai”children’s apparel pinpoint higher with its target households having annual income ranging from 50,000 ￥ to 80,000 ￥.Compared with the common children’s apparel,the price of the “Kukuzai” underwear is 80%-100% higher,and compared with the other common children’s apparel,100%-120% higher. Now Mr Zhao is troubled by whether it’s better to share the baby carriers’ channel or develop a brand new channel to reach its target market.Could you fix this for him according to your knowledge?

3. The decisions the channel management make during the process of designing,evaluating and selecting channels among the various options in order to build the new marketing channels or perfect the existed channels, which aims at achieving the organizations’ channel goals. What is Channel Design All the channel members are faced with the problems of channel design.

4. Principle of Channel Design Make the customers satisfied at the largest latitude based on the minimum costs. Make the channel expeditious to achieve high efficiency Maintain the stablility of the channel to well controll it Coordinate the channel chain and make it balanced It can be fully embodied in the four aspects here Be creative to take advantages

5. Process of Channel Design 1. Identifying the necessities of channel design 3. Clarifying the channel task 4.Designing the channel structure 5. Evaluating & Selecting the channel design schemes 2. Commodities transportation management 6. Recruiting the channel members

6. Identify the Necessities of Channel Design 1)Design a brand-new channel When the company plans to expand into a new target market During the Company’s initial stage When a new corporation emerges as a result of mergers and acquisitions 2) Improve the existed channel Interior ： strategic changes/ new products/new target markets Exterior ： channel conflicts/ distributor changes /environment changes

7. Identify the Channel Goal 1)Analyze consumers’ channel needs( bulk buying/ waiting time/trip distance/selection range/after- sale service) 2)Identify the corporate channel goal(market coverage/channel control/channel flexibility) 3)Coordination of channel goals

8. Identify the Channel Task Sales Promotion Channel Support Logistics Products Amendment & After-sale Service Risk Bearing

9. Thank you for your time!