Deepak Verma PGP29392 Sec-G Channel Management Most of the products are sold nowadays through either direct

or indirect distribution channels. Channel management essentially means effective management of these different channels. Components & choices: 1. Direct sales force tries constantly to get the product involved in purchasing decisions of B2B Transactions. 2. Direct sales force contacts both distributors as well as customers. They may accompany sales representatives to facilitate the decision making process. 3. It also has the responsibility of maintaining co-ordial relationship with intermediaries. 4. Distributors mainly play a cost-transfer role in channel by taking title of goods & then selling them over to customers. 5. Captive distributors have to work towards increasing sales of products by all business units of organization. 6. Agents dont take title of goods but can provide more attention & support to the lines they carry. Though they are not effective for products with long-selling cycles. 7. Brokers represent more than one producer at a time. They never warehouse or deliver the products themselves rather acting as deal breakers only. Different decision choices are as follows: Channel structure : Direct or through intermediaries Reseller type : Independent, captive , agent or broker Market Coverage : exclusive, selective or intensive franchising policies Terms & Conditions : Discount structure, policies

Channel Relations: Tug-of war: Both suppliers & distributors have mutual interest & strive towards maximizing their share of profit & control concerning the product/service. Suppliers can either act as marketing partners and increase the trustworthiness with distributor or can have their products specified by end users. Entangling Alliances: All the decisions being taken by either of supplier or reseller shall take into account the interests of both the parties along with customer. Supplier reseller relationship act as deal breaker whenever the success of marketing programs is considered. Control versus resources: As the number of intermediaries increase, the supplier loses control over the flow of product across the chain. While reducing the chain means more and more activities to be done by supplier itself. This increases the financial implications associated. Hence a tradeoff needs to be made by supplier between resource & control. Control v/s Resources Trade-off Financial Resources High Constrained Low High Need for Control High Low HIgh Low Distribution method Direct sales channel & typical mode of distribution Multi-tier distribution Most functions performed by supplier itself Low cost distribution