Channel Management is defined as a process where the company develops various marketing techniques as well as sales strategies to reach the widest possible customer base. It is the process of recognizing the potential customer, interacting with them and sustaining and continuing to create value for customers.
Variables to consider when selecting channel member:
1. Customer needs: Selecting channel members start with determining the services that consumers in various target segments want. 2. Company’s ability to attract channel members: Companies vary in their ability to attract qualified intermediaries. 3. Economic criteria: Each channel will produce different levels of sales and costs. The business that channel members bring must offset the cost of paying and supporting the channel member. 4. Control criteria: Using sales representatives offers less control than building your own sales force.
For example, the company may have trouble getting franchisees to add new products or to participate in promotions.
Motivating channel members
Motivation: Refers to the actions taken by the manufacturer to foster channel member cooperation in implementing the manufacturer’s distribution objectives.
There are three basic facets involved in motivation management:
1. Finding out the needs and problems of channel members- Before the channel manager can successfully motivate channel members, an attempt must be made to learn what the members want for the channel relationship. Manufacturers are often unaware of or insensitive to the needs and problems of their channel members.
2. Offering support to the channel members that is consistent with their needs and problems.
Support for channel members refers to the manufacturer’s efforts in helping channel members to meet their needs and solve their problems. Such support for channel members is all too often offered on a disorganized and ad hoc basis.
Distribution programming-A comprehensive set of policies for the promotion of a product
through the channel
3. Providing leadership through the effective use of power
Control must still be exercised through effective leadership on a continuing basis to attain a well-motivated team of channel members. Training of channel members- The selected intermediaries must be provided effective and careful training sessions because the intermediaries are considered as the company by the customers.
Types of training for channel members
1. Field training- the channel sales people are provided on the job training regarding achieving sales and collecting payments from the market. 2. Class room training- The distributors and his staff members are given classroom training on the company’s product line, the competition level and the ways to handle the competition. 3. Orientation programs- are special meetings which are organized to launch a new product and the way in which the product has to be launched. 4. Training for paperwork- Intermediaries are trained to prepare reports and maintain records. 5. Servicing training- are given specially for engineering products such as automobiles.
Evaluation of channel members- the evaluation of channel members is crucial for determining the retention, training, and motivation decisions. Through this, necessary information regarding channel member is attained.
Modifying the channel arrangement- Once the channel members are finalized, the companies usually do not re-evaluate the intermediaries which causes potential harm to marketing of the firms.
So it becomes necessary for a company to keep modifying the marketing channels as per the changing needs of the market.
Managing the relationships in channel- one of the key aspects to maximize the revenue and profit is the management of relationships with the channel members.
Factors influencing the channel relationships are:
1. Channel corporation and coordination- corporation and coordination are the complimentary terms which exist together. The success of a product to a great extend depends on the marketing channel adopted by the firm.
It is impossible for a channel to be efficient without coordinating with each other, and improving cooperation among the channel members is very important.
2. Channel power-can be defined as the capability of a channel member that allow him to control the decisions of other channel members in the same marketing channel. 3. Channel conflict- refers to a situation when one channel member competes with the other. This arises when a channel member feels obstructed by another channel member.
