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Amity Business School

Amity Business School MBA(M&S),Class of 2014, Semester II

Selection of Channel Partners


Swati Bhatnagar

Amity Business School

Channel Member Selection


This is the last phase of channel design. Choice between merchants, agents & facilitators 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

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Consists of three steps : Finding prospective channel members Applying the selection criteria to determine the suitability of prospective channel members Securing the prospective channel members

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Finding prospective channel members


Variety of sources in order of importance are:1. Field sales force 2. Trade sources 3. Reseller enquiries 4. Customers 5. Advertising 6. Trade shows 7. Others(Internet, business databases, independent consultants etc.

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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 ones are those of Brendel, Hlavacek & Mc Cuistion, David Shipley & Pegram. The most classic & famous are those of Brendel & Pegram

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Brendels list of 20 selection questions


1. 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 distributors 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.

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13. 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 distributors 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.

Pegrams criteria

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Sales strength

Quality Quantity Competency

Product lines

Competitive Compatible Complementary Quality

Reputation

Management succession Sales performance

Market coverage

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Securing 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 beneficial

Specific inducements for securing channel members


Prospective channel members are always keen to know what is in it for them if they join the manufacturers marketing channel. Most of them would fall within the following 4 areas :1. Good profitable product line 2. Advertising & Promotional support 3. Management Assistance 4. Fair dealing policies & friendly relationships ( not just an economic /business relationship but a human relationship as well 3M Ad, Synders Ad

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