Analysing Consumer Needs
The first step in channel design decisions is to analyse consumer needs and desires from the channel. This involves understanding customers’ preferences, expectations, and behaviours regarding how they want to access and purchase products or services. It can be done by answering the following questions:
- Do the customers want to buy from a nearby location, or are they willing to go to a place away from their home to buy the product or service?
- Do they want to purchase the product or service online, in person, or by phone?
- Do they want specialised products or services or value breadth of assortment?
- Do the consumers want add-on services with the main product, such as delivery, installation, repair, etc., or are they ready to get these services from some other place?
It is not possible for any company to provide all the desired services to the consumers as the company and its channel members may not possess all the required skills for the same. Also, if a company provides higher service levels to the consumers, then it will increase the cost of the channel, ultimately increasing the prices for consumers. Therefore, it is essential for the company to maintain a balance between consumer needs, feasibility and cost of meeting those needs, and customer price preference. Besides, through the success of discount retailing, it can be said that consumers will be ready to get lower services if they have to pay lower prices for the same.
Thus, by gaining insights into consumer needs, businesses can tailor their channel design to meet those requirements and deliver an enhanced customer experience.