As total production capacity became more than 100 million units a year, Korean domestic handset manufacturers need to refine existing channels and establish new marketing channels. The key members of a local marketing channel are handset makers, mobile service providers, distribution agents (exclusively representing service provider s), and end-users.
In Korea, service providers are offering package service that combines mobile communication service and a service-enabled handset. Because of such a bundle-typed marketing, handset manufactures are selling their products only through service providers and customers have no choice but to purchase service-customized handsets at the service providers’ agent counters. Furthermore, service providers are enforcing exclusive sales agency policy in distributing channel operations, where local handset channels are a system made up of players depending on service providers.
These characteristics of marketing channels enable service providers to take dominant bargaining power over handset providers and distributing agents, causing a situation that will negatively affect the efficiency of its entire channel structure.
Moreover, in such a recent change as handset subsidy regulations, new number-portability policy, the possible introduction of user identity module cards, worse than expected profit structure of sales agents, we can make use of such bounds and insights to design and manage more efficient marketing channels. In this thesis, I would like to suggest why Korean domestic makers need to build up their own distribution channels and how they can set up the new distribution channels.
Marketing channels would be designed from the start to define channel segments that best describe end-users’ service output demands and purchasing patterns. With an understanding of the target segment market (i.e., preference for personalized function and design segment), I have analyzed channel flows to evaluate the cost-effectiveness of channel activities. I have just introduced the concept of the Efficiency Template to support this analysis. The Efficiency Template codifies information about the importanc e of each channel flow in both cost and value terms, as well as about the proportion of each flow performed by each channel member.
Then, I have described the Gap Analysis Template, which shows experiential marketing would lessen the demand-side gap of target segment-specific, and a supply-side gap could be minimized by electronic channel considerations and handset distribut ion system separated from mobile service providers.
