©2000PrenticeHallWorkPerformedbyMarketingChannelsChannel-DesignDecisionsChannel-ManagementDecisionsChannelDynamics©2000PrenticeHall=Customer=ManufacturerA.NumberofcontactswithoutadistributorMxC=3X3=9132456789©2000PrenticeHall=Distributor=Customer=ManufacturerB.NumberofcontactswithadistributorMxC=3+3=6Store123456©2000PrenticeHall©2000PrenticeHall’DesiredServiceLevelsLotsizeWaitingtimeSpatialconvenienceProductvarietyServicebackup©2000PrenticeHall©2000PrenticeHall©2000PrenticeHall©2000PrenticeHallIncompatibilityDifferenceinPerceptionDependenceLegal&EthicalIssuesinChannelRelationsExclusiveDealingExclusiveTerritoriesTyingAgreementsDealers’Rights