Transcript Document
Chapter 7
Selecting the Channel Members
Objective 1:
Channel Member Selection
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The last phase of channel design S election
may
or
may not
be the result of channel design.
Firm may need additional outlets to allow for growth To replace channel members that have left
Objective 2:
Selection & Distribution Intensity
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The greater the intensity of distribution The less the emphasis on selection
The Selection Process
1. Finding prospective channel members 2. Applying selection criteria to determine the suitability of prospective channel members 3. Securing the prospective channel members as actual channel members
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Objective 3:
Finding Members
1. Field sales organization 7. Other sources 2. Trade sources 6. Trade shows 5. Advertising 3. Reseller inquiries 4. Customers
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Field Sales Organization
Salespeople are the best positioned to know about potential intermediaries BUT:
• They are often able to pick up information about likely intermediaries.
• They may have lined up prospective intermediaries.
• The manufacturer must adequately reward salespeople for their time & effort establishing connections.
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• Trade associations • Trade publications • Directories • Trade shows • Firms selling similar products • The “grapevine”
Trade Sources
For Example:
•
Industrial Distribution
magazine • The
Verified Directory of Manufacturers’ Representatives
• The National Association of Wholesaler-Distributors • The National Retail Federation • The
Encyclopedia of Associations
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Reseller Inquiries
Reseller Inquiries
Many firms learn about direct inquiries from intermediaries interested in handling their product.
This is the main source of information about potential new channel members for some manufacturers.
Firms receiving the highest number of inquiries are the more prestigious in their industry.
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Advertising
Trade magazine advertising can generate a large number of inquiries from prospective Members.
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It therefore can provide a large pool from which to make selections.
Trade Shows
Wholesale and retail trade associations hold annual conventions.
Attending manufacturers have access to a wide variety of potential channel members.
**
Small manufacturers meet face-to-face with wholesalers & retailers.
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Other Sources
2.
3.
4.
5.
6.
7.
8.
1.
Chambers of commerce, banks, & local real estate dealers Classified telephone directories or the yellow pages Direct-mail solicitations Contacts from previous applications Independent consultations List brokers that sell lists of names of businesses Business databases The Internet
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Objective 4:
Selection Criteria
• Credit & Financial Condition • Sales Strength • Product Lines • Reputation • Market Coverage • Sales Performance • Management Succession • Management Ability • Attitude • Size
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Objective 5:
Adapting Selection Criteria
Because no list of criteria is adequate for a firm under all conditions,
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the channel manager should be flexible when using selection criteria.
Objective 6:
Who Selects?
Who does the selecting?
Producers & Manufacturers Wholesale Intermediaries Retail Intermediaries
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Securing Channel Members
. . . The supplier produces, the distributor sells, and each is dependent upon the other.
Together they form a team, and teamwork is essential if the association is to prove mutually beneficial.
— Pegram
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Objective 7:
Offering Inducements
Good, profitable product line Advertising & promotional support Management assistance Fair dealing policies & Friendly relationships
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Product Line
Product line inducements:
1.
Manufacturer offers good product line with strong sales & profit potential
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2.
Stress value of good product line from channel members’ perspective
Advertising & Promotion
Advertising & promotion inducements
Consumer Market: Gain immediate credibility by using a strong program of national advertising.
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Industrial Market: Gain recognition by using a strong program of trade paper advertising.
Management Assistance
Management assistance inducements:
Prospective members want to know whether the Manufacturer will help with the following: • training programs • financial analysis & planning • market analysis • inventory control procedures • promotional methods
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Objective 8:
Fair Dealing & Friendly Relationship
Manufacturer’s Responsibility:
To convey to prospective channel members that he or she is genuinely interested in establishing a good relationship based on trust and concern for their welfare as both business Entities and as people
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