Channel Sales Management

1. Case Study write-up Sandhya Gupta
Deepshikha Verma
Channel Management
In this case study we came through the definition of channels
that refers to the ways in which a product reaches its end users.
Some products are sold directly whereas some pass through
one or more intermediary but the common channel
management is:
The most important task of all the organization is the
management of their distribution channel or sales management
system. Distribution channel is bifurcated into two divisions’
namely direct and indirect distribution channel. The overall
business strategy is based upon the multichannel arrangements
that impact all aspects of sales management and marketing
efforts.
This note discusses:
a)Key components and choices of channel management
b)Major factors that affect producer-reseller relations
c) Trade-offs between control and resources inherent in most
distribution system
Components and Choices
Manufacturer Wholesaler Distributor Retailer Consumer

2. Case Study write-up Sandhya Gupta
Deepshikha Verma
Channel performs certain functions-
1.Demand generation
2.Carrying of inventory
3.Physical distribution
4.After-sale service
5.Extending credit to customers (Depending of product
category & nature of demand)
6.Product modification and maintenance (In the form of
customization, specialized support services)
Outreach of a product to the end-user market, a product must
either assume all of these functions to be followed or shift some
of the functions to intermediaries.
In following the above mentioned functions channel may
include any of the components each possessing distinct
capabilities and constraints within the marketing strategy of the
producer-:
 A direct sales force usually calls on decision makers
and decision influencers within user accounts,
attempting to get the producer’s product specified in
purchase decisions specifically those involving
business-to-business transactions. In multichannel

3. Case Study write-up Sandhya Gupta
Deepshikha Verma
system, the direct salesforce often has responsibility
for contact with distributor (or in Hi-Tech markets,
”value added resellers” or system integrators)
personnel as well as user customers.
 Distributors purchase goods from suppliers, take title
to those goods and sell goods to user customer or to
other resellers. The scope and focus are usually
defined in product market terms. The important task
is the ongoing development and maintenance of
reseller attention and sales support.
 Captive distributors function such as independent
distributors but they are owned by particular suppliers
and operate as business units within a larger
corporation. Thus Captive distributors have duel
mission to maximize their own sales volume and
product margins.
 Agents, like distributors, sell the product of numerous
suppliers to user customers. But unlike distributors
agents work on commission and do not take title to the
goods they sell for example- Manufacturer’s rep.

4. Case Study write-up Sandhya Gupta
Deepshikha Verma
 Unlike MR’s, brokers tend to represent a number of
different producers at any one time and only for short
span of time. Brokers are important in areas such as
used equipment or in agricultural commodities where
demand and supply nature of ongoing opportunities to
sell large lots of products to buyers.
The key issues in distribution strategy and channel distribution
concern the alignment of available components along with
distribution functions that must be performed in getting a
product to market.
Channel structure, reseller type, market coverage and terms
and conditions are what makes channel management an
especially interesting whereas the difficult aspect of marketing
implementation is that these choices pose dynamic constrains
and opportunities.
Channel Relations
One of the important function of channel management is the
development and maintenance of goods and relations between
suppliers and resellers. There are three factors quoted in case

5. Case Study write-up Sandhya Gupta
Deepshikha Verma
study showcasing the factors that can effect relations in channel
management-:
a)Tug of War-It simply characterize supplier-reseller relations.
Exchanges take place between supplier and distributor
means that each has certain deemed value by other thus
having the mutual interest in maximizing the sales. Because
supplier and reseller have mutual interest altogether and
inherent conflicts, the rhythm of these relationships is
analogous to an ongoing tug-of-war, it also emphasizes this
aspect of channel relations via “seesaws”.
b)Entangling Alliances-It usually comprise competition at
each stage of channel. The complicated relationship among
intermediaries and entangling alliances try to reduce the
effect. Producers sell through number of intermediaries
while resellers carry the products of competing
manufacturers as well as the lines of many other suppliers
in different product categories. For examples, supplier’s
pricing decisions must be considered not only in terms of
the impact on user-customer demand patterns but also in
terms of the impact on reseller margins.

6. Case Study write-up Sandhya Gupta
Deepshikha Verma
Control versus Resources
Interplay between control and resource inherent in distribution
effect supplier and re-seller’s relation. In most of the marketing
situations producers often face trade-off between its ability to
control important channel functions and the financial/human
resource needed to control or manage the exercise. It also been
said in case study giving the example of numbers of
intermediaries when involved in this exercise reduces the
control of supplier over the flow of its product through the
channel. On the other hand constraining the channel increases
the work load of supplier making them liable for other jobs also
in turn supplier require to allocate more field-marketing
resources such as warehousing, shipping, credit, etc.
Second, depending upon the product or market, management’s
need to control the channel function may alter in low and high
because of the nature of product and technology’s requirement
related to information of the product between supplier and
user customer. Thus, business units differs on the bases of
certain functional areas such as financial resources, capacity of
performance, channel functions (selling, field service, delivery).

7. Case Study write-up Sandhya Gupta
Deepshikha Verma
Besides resources and control considerations many other
factors impact channel management decisions and tactics can
highlight the interplay on two important concerns of marketing
managers and that are:
1-What is the basic role of intermediaries within the
marketing programs of a supplier
2-What level of quality control is required for a particular
channel function
For most companies, sales management combines both the
aspects of direct and indirect distribution channel and in return
it requires clarity concern about choices regarding distribution
channel management, understanding of factors related to
relationship of supplier-re-seller and trade-offs managements
between control and resources.