This paper is structured into three main parts and a conclusion. The main section provide definitions of efficiency, effectiveness and performance in terms of the distribution channel, followed by a review of related performance measurement, before discussing difficulties of measurement. According to the theoretical approach, it appears that key theroretical issues are centered around customer service, logistics excellence, time compression, the use of IT, and a move towards integrated logistics. The empirical approach shows that in the past, various financial performance indicators were regarded as relevant management information. However, today, management needs additional performance indicators. Therefore, external assessments of effectiveness must be performed to measure customers' satisfaction with the physical flow of product through the distribution channel network. So, what is needed is to take previous normative and explorative research and progress through a framework by developing valid measures of distribution channel's effectiveness and efficiency, and identifying research methodologies suited to the data collection requirements.

• Sang-Youl Kim