Selection of channel partnersPresentation Transcript
Amity Business School Channel Member Selection• This is the last phase of channel design.• Generally, the greater the intensity of distribution, the less the emphasis on selection.• In an intensive distribution pattern , the intermediaries are “selected” only to the extent that they have the probability of paying the bills.• On the other hand, in case of selective distribution the selection decisions become more critical & are carefully scrutinised.
The Selection Process Amity Business SchoolConsists of three steps :- Finding prospective channel members Applying the selection criteria to determine the suitability of prospective channel members Securing the prospective channel members
Amity Business SchoolFinding prospective channel membersVariety of sources in order of importance are:-4. Field sales force5. Trade sources6. Reseller enquiries7. Customers8. Advertising9. Trade shows10.Others
Amity Business School Applying the selection criteria• Here the appraisal of the prospects happen in light of the selection criteria.• However , no list of criteria, no matter how carefully developed, is adequate for a firm under all conditions. Some flexibility can also be adopted certain times.• Lot of attempts have been made to specify the same, of which most prominent one’s are those of Brendel, Hlavacek & Mc Cuistion, David Shipley & Pegram. The most classic & famous are those of Brendel & Pegram
Amity Business School Brendel’s list of 20 selection questions1. Does the distributor really want our line or is he or she after it just because of present day shortages ?2. How well established is he or she?3. What is his reputation with his customers?4. What is his reputation among manufacturers?5. Is he or she aggressive?6. What other allied lines does the distributor handle?7. What is the distributor’s financial position?8. Has he the ability to discount his bills?9. What is the size of his plant (facilities)?10. Will he maintain adequate inventory for services?11. To what important customers does the distributor sell?12. To which one does he not sell?
Contd. Amity Business School13. Does he maintain stable prices?14.Does he disclose the annual sales figure for the past five years?15.What territory does the distributor actually cover with his sales force?16. Are the distributor’s sales people trained?17. How many field personnel does he have?18. How many internal employees he has?19. Does the distributor believe in active co operation, sales training & sales promotion?20. What facilities does he have for these activities? Hlavacek & Mc Cuistion augmented this by emphasizing that the coverage should be not only be in geographical terms but also in market segment terms. Also according to them financial capacity should not be over emphasized as at times less financed but more “ hungry ” ones also prove better.
Amity Business SchoolSecuring the prospective channel members The supplier produces , the distributor sells& each is dependent on the other. Together they form a team and team work is essential for the association to become mutually beneficialSpecific inducements for securing channel members Prospective channel members are always keen to know “ what is in it for them” if they join the manufacturer’s marketing channel. Most of them would fall within the following 4 areas :-6. Good profitable product line7. Advertising & Promotional support8. Management Assistance9. Fair dealing policies & friendly relationships ( not just an economic /business relationship but a human relationship as well3M Ad, Synder’s Ad