Learning objectives:

–Define the generic channel functions that characterize costly and value-added channel activities.

–Understand how the efficiency template helps codify channel function performance according to channel and channel participant.

–Describe the role of channel function allocation in designing a zero-based channel.

–Recognize how channel function performance leads to appropriate allocations of channel profits among channel members, using the equity principle.

–Locate channel function analysis within an overall channel audit process.

–Use the efficiency template even in conditions with little information.

–Define service and cost gaps and describe the sources of these gaps.

–Perform a gap analysis using both service and cost gap analysis templates.