What do we do after choosing a channel system??

Selecting right Channel Members Training and Motivating Channel Members

Evaluating Channel Members

Modifying Channel Design and Arrangements

Selecting Channel Members

To customers, Channels are the company

What characteristics distinguish better intermediaries:

Growth Record and Financial Strength

No. of years in business

Other Lines

Cooperativeness

Service Reputation

Training and Motivating Channel Members

Training/Capability Building Programs

Market Research Programs

Understanding Intermediaries needs and wants Company and Intermediaries are partners in a joint effort to satisfy end users Channel Power to manage them all...

Channel Powers
Coercive PowerThreaten to withdraw Reward Power Benefits for performance Legitimate PowerWarranted Power Expert Power Cooperate to Expertise Referent Power The highly respected

To gain Intermediaries Cooperation

Positive Motivators high margins, special deals, premiums, allowances

Negative SanctionsThreatening to reduce margins, slow down delivery, relationship termination

Evaluating Channel Members

Periodical evaluation of performance against: Sales- quota attainment Average Inventory Levels Customer Delivery Time Treatment of Damaged/Lost Goods Cooperation in Promotions and Trainings

Measures for improvement:

Functional discounts for good performance Counseling, Retraining, Termination for Underperformers

Modifying Channel Design & Arrangements:

A producer must periodically review and modify its channel design and arrangements to find if:

Distribution channel is not working properly

Consumer Buying Patterns change

Market Expands

Product Innovative New moves into distribution later stages competition channels arises of product Emerge life cycle

No marketing channel will remain effective over the whole product life cycle

APPLE STORES
2001 - BusinessWeek published an article Sorry Steve, Heres Why Apple Stores Wont Work 2006 Apple celebrates launch of its Manhattan Showcase Store With over 175 locations Annual sales per square foot of $4032 How? Opened its own stores because of companys frustration with its poor retail presentation The move upset existing retailers, but Apple worked hard to smooth relationships

Hindustan Unilever Limited

www.sangam.com HUL web marketing initiative Network of 250,000 entrepreneur-consultants In 1500 towns Covering 80% of Indias urban population Dropped due to conflict with channel partners

2001- Project Shakti Integrating business interests with national interests Expanding coverage to rural markets by using women members of Self-Help Groups Provides mass market products Training in basic enterprise management Spread across the country with 39,000 women members

In a Nutshell
Adding or dropping channel members requires an incremental analysis. A producer may drop an intermediary whose sales drop below a certain level Key to the Indecision Sophisticated analyses of Customer shopping information The most difficult questionWhether to revise the overall channel strategy??