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CHAPTER -5
GAP ANALYSIS
Urmi Saha
The channel that both meets service output demands and does so at minimum cost of performing the necessary channel flows is called zero based channel
What non-valued functions can be eliminated without damaging customer or channel satisfaction? Are there to be any redundant activates? Which of them could be eliminated to result in the lowest cost for the entire system? Is there a way to eliminate, redefine, or combine certain tasks in order to minimize steps in a sale or reduce its cycle time? Is it possible to automate certain activities in a way that reduces the unit cost of getting products to market, even though it will lead to increased fixed costs? Are there opportunities to modify information systems to reduce the costs of prospecting, order entry, or quote generation activities?
Cause management has not thought carefully about target end users demands for service outputs or about managing the cost of running their channel Advice channel managers must pay attention to both demand side & supply side in designing their channel to avoid these gaps
Imposed due to lack of infrastructural capabilities in the market to support the optimal channel structure
If there is no competition in providing that particular service, then demandside gap need not to be closed output. But persistent demand side channel gaps provides an ideal opportunity for a channel to build overall market demand, as well as to capture more market share, by investing in improved service output levels.
It occurs when one or more of the channel flows are performed at a higher cost than the required cost. It results to increase in overall cost incurred on all the channel flows. It is a sign of an inefficient channel performance & it will the profit of each channel members.
It implies that there is a superior technology with the help of which the cost of performing the channel flows can be decreased without compromising the service output provision. It also implies that the it will demotivate the channel members because their profits will be reduced due to increased cost.
It can exist in one or more channel flows simultaneously. It may exist in one of a companys channel without existing in all of them. It may give rise to demand-side supply gaps. If it happens then it needs to be closed because it will decrease the cost as well as increase the service output provisions to target end-users.
No Gaps
Expanding or retracting the level of service outputs provided to the target market. Offering multiple, tiered service output levels to appeal to different segments.
Bringing in new distribution function specialists to improve the functioning of the channel.
CONCLUSION
I conclude that GAP analysis is an important concept because of the following reasons:Helps to forecast actual demand, as a result reduces gap between demand and supply. Helps to reduce the costs incurred on channel flows, as a result maximises profit of channel members. Helps in reducing the gap between actual performance and expected performance. Ultimately contributes to efficient channel performance,
BIBLIOGRAPHY
MARKETING CHANNELS ,7th edition By :-Anne T. Coughlan :-Eric Anderson :-Louis W. Stern :-Adel I. El-Ansary
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