Definition
Channel performance is an outcome measure of the channel of distribution. The performance of a distribution channel can be assessed by considering a number of performance dimensions: [1]
- Channel effectiveness is based on how well the channel satisfies customer needs and wants, such as for lot size, delivery time, location convenience, and assortment breadth.
- Channel efficiency is focused on how well the firm minimizes costs associated with performing necessary channel functions.
- Channel productivity is based on the degree to which the channels’ total investment in the various inputs necessary to achieve a given distribution objective can be optimized in terms of outputs.
- Channel profitability is based on the financial performance of channel members in terms of ROI, liquidity, leverage, growth in sales and profits, etc.
See Also
Channel functions
Channel margin
Distribution channel
Distribution metrics
References
- American Marketing Association, AMA Dictionary.