END-USER ANALYSIS
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E N D - U S E R S E G M E N T A T I O N C R I T E R I A :
S E R V I C E O U T P U T S
An existing framework codifies and generalizes how end-users want to buy particu-
lar products, as a basis for determining channel structures.
8
We use
this approach
to discuss ways to segment markets for channel design purposes. According to
this framework, channel systems exist and remain viable over time because they
perform duties that reduce end-users’ search, waiting time, storage, or other costs.
These benefits represent the
service outputs of the channel. All else being equal
(e.g., price, physical product attributes),
end-users prefer a marketing channel that
provides more service outputs. These service outputs in turn
can be classified into six
general categories, as outlined in Figure 10.1:
1. Bulk-breaking.
2. Spatial convenience.
3. Waiting or delivery time.
4. Product variety.
5. Customer service.
6. Information sharing.
This generic list can be customized to different applications, but these six service
outputs cover the main categories of needs that end-users demand from upstream
channel partners.
Bulk-Breaking
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