Marketing channel management calls for selecting, managing, and motivating individual channel members and evaluating t heir performance over time.
Selecting Channel Members Producers vary in their ability to attract qualified marketing intermediaries. Some producers have no trouble signing up channel members. At the other extreme are producers who have to work hard to line up enough qualified intermediaries. Even established brands may have difficulty gaining and keeping desired distribution, especially when dealing with powerful resellers. When selecting intermediaries, the company should determine what characteristics distinguish the better ones. If the intermediaries are sales agents, the company will want to evaluate the number and character of other lines carried and the size and quality of the sales force. If the intermediary is a retail store that wants exclusive or selective distribution, the company will want to evaluate the store’s customers, location, and future growth potential. Managing and Motivating Channel Members Once selected, channel members must be continuously managed and motivated to do their best. The company must sell not only through the intermediaries but also to and with them. Most companies see their intermediaries as first-line customers and partners. They practise strong partner relationship management (PRM) to forge long-term partnerships with channel members. This creates a value delivery system that meets the needs of both the company and its marketing partners. In managing its channels, a company must convince distributors that they can succeed better by working together as a part of a cohesive value delivery system. Many companies are now installing integrated high-tech PRM systems to coordinate their whole-channel marketing efforts. Just as they use customer relationship management (CRM) software systems to help manage relationships with important customers, companies can now use PRM and supply chain management (SCM) software to help recruit, train, organize, manage, motivate, and evaluate relationships with channel partners. Evaluating Channel Members The company must regularly check channel member performance against standards such as sales quotas, average inventory levels, customer delivery time, treatment of
damaged and lost goods, cooperation in company promotion and training programs, and services to the customer Finally, companies need to be sensitive to their channel partners. Those who treat their partners poorly risk not only losing their support but also causing some legal problems. The next section describes various rights and duties pertaining to companies and other channel members. PUBLIC POLICY AND DISTRIBUTION DECISIONS For the most part, companies are legally free to develop whatever channel arrangements suit them, but they need to be aware of and comply with Canada’s Competition Act , which regulates many channel practices.