Part 3 Managing the Marketing Channel
Chapter 9 <ul><li>Motivating the Channel Members </li></ul>
Channel Management   9 Objective 1: The administration of existing channels to secure the cooperation of channel members i...
Motivation Management M otivation   M anagement: 9 The actions taken by the manufacturers to foster channel member coopera...
Channel Management versus Channel Design 9 Objective 2: “ Setting up”  the channel Channel Design Channel Management “ Run...
Motivating Channel Members <ul><li>  Basic Framework </li></ul><ul><li>1. Find out the needs and problems of channel membe...
Channel Member  Needs & Problems <ul><ul><li>Research studies of channel members </li></ul></ul><ul><ul><li>Research studi...
Research Studies of Channel Members 9 Less than 1 percent of manufacturers’ research budgets is spent on channel member re...
Research Studies by Outside Parties 9 Why use outside parties to conduct research? They provide a higher  assurance of obj...
Marketing Channel Audits 9 Focus of channel manager’s approach: • Gather data on how channel members perceive the manufact...
Marketing Channel Audits 9 W hat makes marketing channel audits most effective? It should  identify and define in detail t...
Distributor Advisory Councils 9 W ho is involved? Top management representatives from the  manufacturer and from the chann...
Supporting Channel Members 9 Objective 5: 3 Types  of  Programs 2. Partnership or strategic alliance 3. Distribution progr...
Cooperative Arrangements 9 Focuses on channel member needs & problems Simple & straightforward Conveys a clear sense of mu...
Cooperative Arrangements <ul><ul><li>Cooperative advertising allowances </li></ul></ul><ul><ul><li>Payments for interior d...
Partnerships & Strategic Alliances 9 Focus on a continuing and mutually supportive relationship between the manufacturer a...
Partnerships & Strategic Alliances 9 Three basic phases <ul><ul><li>Manufacturer should make explicit statement of </li></...
Distribution Programming 9 A comprehensive set of policies for the promotion of a product through the channel Developed as...
Distribution Programming 9 <ul><li>S teps for developing a program: </li></ul><ul><ul><li>Manufacturer develops analysis o...
Relationship Differences 9 Objective 6: Cooperative Arrangements Intermittent interactions between manufacturer & channel ...
The Selective Use of Power 9 Objective 7: The channel manager must exercise effective leadership on a  continuing basis to...
9 Limited Control Objective 8: Interorganizational System Loosely arranged firms = few advantages from  central direction ...
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DS MRKT 339

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  • DS MRKT 339

    1. 1. Part 3 Managing the Marketing Channel
    2. 2. Chapter 9 <ul><li>Motivating the Channel Members </li></ul>
    3. 3. Channel Management 9 Objective 1: The administration of existing channels to secure the cooperation of channel members in achieving the firm’s distribution objectives C hannel M anagement:
    4. 4. Motivation Management M otivation M anagement: 9 The actions taken by the manufacturers to foster channel member cooperation in implementing the manufacturer’s distribution objectives
    5. 5. Channel Management versus Channel Design 9 Objective 2: “ Setting up” the channel Channel Design Channel Management “ Running” the channel
    6. 6. Motivating Channel Members <ul><li> Basic Framework </li></ul><ul><li>1. Find out the needs and problems of channel members. </li></ul><ul><li>2. Offer support to the channel members that is consistent with their needs and problems. </li></ul><ul><li>3. Provide leadership through the effective use of power. </li></ul>9 Objective 3:
    7. 7. Channel Member Needs & Problems <ul><ul><li>Research studies of channel members </li></ul></ul><ul><ul><li>Research studies by outside parties </li></ul></ul><ul><ul><li>Marketing channel audits </li></ul></ul><ul><ul><li>Distributor advisory councils </li></ul></ul>9 Objective 4: Approaches for learning about member needs & problems:
    8. 8. Research Studies of Channel Members 9 Less than 1 percent of manufacturers’ research budgets is spent on channel member research! BUT: Manufacturer-initiated research can be useful because certain types of needs or problems may not be at all obvious.
    9. 9. Research Studies by Outside Parties 9 Why use outside parties to conduct research? They provide a higher assurance of objectivity. They provide a level of expertise that the manufacturer may not possess.
    10. 10. Marketing Channel Audits 9 Focus of channel manager’s approach: • Gather data on how channel members perceive the manufacturer’s marketing program and its component parts. • Locate the strengths and weaknesses in the relationships. • Learn what is expected of manufacturers to make the channel relationship viable and optimal.
    11. 11. Marketing Channel Audits 9 W hat makes marketing channel audits most effective? It should identify and define in detail the issues relevant to the manufacturer- wholesaler and/or manufacturer- retailer relationship. Issues chosen for the audit should be cross-referenced to any relevant variables. It must be conducted periodically so as to capture trends & patterns.
    12. 12. Distributor Advisory Councils 9 W ho is involved? Top management representatives from the manufacturer and from the channel members W hat are the benefits? • Provides recognition for the channel members • Provides a vehicle for identifying and discussing mutual needs and problems • Results in an overall improvement of channel communications
    13. 13. Supporting Channel Members 9 Objective 5: 3 Types of Programs 2. Partnership or strategic alliance 3. Distribution programming 1. Cooperative
    14. 14. Cooperative Arrangements 9 Focuses on channel member needs & problems Simple & straightforward Conveys a clear sense of mutual benefit
    15. 15. Cooperative Arrangements <ul><ul><li>Cooperative advertising allowances </li></ul></ul><ul><ul><li>Payments for interior displays </li></ul></ul><ul><ul><li>Contests for buyers, salespeople, etc. </li></ul></ul><ul><ul><li>Allowances for warehousing functions </li></ul></ul><ul><ul><li>Payments for window display space </li></ul></ul><ul><ul><li>Detail men who check inventory </li></ul></ul><ul><ul><li>Demonstrators </li></ul></ul><ul><ul><li>Coupon-handling allowance </li></ul></ul><ul><ul><li>Free goods </li></ul></ul>9 Typical types of cooperative programs provided by Manufacturers to channel members
    16. 16. Partnerships & Strategic Alliances 9 Focus on a continuing and mutually supportive relationship between the manufacturer and its channel members in an effort to provide a more highly motivated team, network, or alliance of channel members
    17. 17. Partnerships & Strategic Alliances 9 Three basic phases <ul><ul><li>Manufacturer should make explicit statement of </li></ul></ul><ul><li>policies in areas such as product availability, </li></ul><ul><li>technical support, pricing, etc. </li></ul><ul><ul><li>Manufacturer should assess all existing distributors </li></ul></ul><ul><li>as to their capabilities for fulfilling their roles </li></ul>3. Manufacturer should continually appraise the appropriateness of the policies guiding his or her relationship with the channel members
    18. 18. Distribution Programming 9 A comprehensive set of policies for the promotion of a product through the channel Developed as a joint effort between the manufacturer and the channel members to incorporate the needs of both
    19. 19. Distribution Programming 9 <ul><li>S teps for developing a program: </li></ul><ul><ul><li>Manufacturer develops analysis of marketing </li></ul></ul><ul><li>objectives & the kinds of levels of support needed </li></ul><ul><li>from channel members </li></ul><ul><li>• Ascertains channel members’ needs & </li></ul><ul><li>problem areas </li></ul><ul><ul><li>Formulate specific channel policies that offer: </li></ul></ul><ul><li>• Price concessions to channel members </li></ul><ul><li>• Financial advice </li></ul><ul><li>• Some kind of protection for channel members </li></ul>
    20. 20. Relationship Differences 9 Objective 6: Cooperative Arrangements Intermittent interactions between manufacturer & channel members Partnerships & Strategic Alliances Continuing & mutually supportive relationship Distribution Programming Deals with virtually all aspects of the channel relationship
    21. 21. The Selective Use of Power 9 Objective 7: The channel manager must exercise effective leadership on a continuing basis to attain a well-motivated team of members.
    22. 22. 9 Limited Control Objective 8: Interorganizational System Loosely arranged firms = few advantages from central direction Reward & penalty system not precise Overall planning uncoordinated Diffused perspective necessary to maximize total system effort

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