2 Channel Member Selection Objective 1:Channel Member Selection7The last phase of channel designSelection may or may not be the result of channel design.Firm may need additionaloutlets to allow for growthTo replace channelmembers that have left
3 Selection & Distribution Intensity Objective 2:7Selection & Distribution IntensityThe greater the intensity of distributionThe less the emphasis on selection
4 The Selection Process 7 2. Applying 3. Securing the selection criteria to determine thesuitability ofprospectivechannel membersFinding prospectivechannel members3. Securing theprospectivechannel membersas actual
5 Finding Members 7 Field sales organization 7. Other sources Objective 3:Finding Members7Field salesorganization7. Other sources2. Trade sources6. Trade shows3. Reseller inquiries5. Advertising4. Customers
6 Field Sales Organization 7Salespeople are thebest positioned toknow about potentialintermediariesBUT:They are often able to pick up information about likely intermediaries.They may have lined up prospective intermediaries.The manufacturer must adequately reward salespeople for their time & effort establishing connections.
7 Trade Sources 7 For Example: Industrial Distribution magazine The Verified Directory of Manufacturers’ RepresentativesThe National Association of Wholesaler-DistributorsThe National Retail FederationThe Encyclopedia of AssociationsTrade associationsTrade publicationsDirectoriesTrade showsFirms selling similar productsThe “grapevine”
8 Reseller Inquiries 7 Many firms learn about direct inquiries from intermediariesinterested in handling their product.This is the main source ofinformation about potential new channelmembers for some manufacturers.ResellerInquiriesFirms receiving the highest numberof inquiries are the moreprestigious in their industry.
9 = Customers 7 Customers are willing to give frank opinions about the intermediaries who call on them.Manufacturer conducts formal or informal surveys ofcustomers’ views of various distributors.=Manufacturer obtains information aboutpotential intermediaries.
10 Advertising 7 Trade magazine advertising can generate a large number of inquiries from prospectiveMembers.It therefore can provide a largepool from which to make selections.
11 ** Small manufacturers meet face-to-face with Trade Shows7Wholesale and retail trade associationshold annual conventions.Attending manufacturers have access to awide variety of potential channel members.** Small manufacturers meet face-to-face withwholesalers & retailers.
12 Other Sources7Chambers of commerce, banks, & local real estate dealersClassified telephone directories or the yellow pagesDirect-mail solicitationsContacts from previous applicationsIndependent consultationsList brokers that sell lists of names of businessesBusiness databasesThe Internet
14 Adapting Selection Criteria Objective 5:Adapting Selection Criteria7Because no list of criteria is adequatefor a firm under all conditions,the channel manager should be flexible whenusing selection criteria.
15 Who Selects? Who does the selecting? 7 Producers & Manufacturers Objective 6:7Who Selects?Who does the selecting?Producers & ManufacturersWholesale IntermediariesRetail Intermediaries
16 Securing Channel Members 7. . . The supplier produces, the distributorsells, and each is dependent upon the other.Together they form a team, and teamworkis essential if the association is to provemutually beneficial.— Pegram
18 Product Line 7 Product line inducements: 1. Manufacturer offers good product line withstrong sales & profit potential2. Stress value of good product line fromchannel members’ perspective
19 Advertising & Promotion 7Advertising & promotion inducementsConsumer Market:Gain immediate credibility by using a strong programof national advertising.Industrial Market:Gain recognition by using a strong program oftrade paper advertising.
20 Management Assistance 7Management assistance inducements:Prospective members want to know whether theManufacturer will help with the following:• training programs• financial analysis & planning• market analysis• inventory control procedures• promotional methods
21 Fair Dealing & Friendly Relationship Objective 8:7Fair Dealing & Friendly RelationshipManufacturer’s Responsibility:To convey to prospective channel members thathe or she is genuinely interested inestablishing a good relationship based on trustand concern for their welfare as both businessEntities and as people