Selecting the Channel Members Submitted By: Pooja Gupta –

SELECTION OF CHANNEL MEMBERS THE MOST IMPORTANT FACTOR IS TO FIND STRONG CHANNEL MEMBERS. SO THAT, THEY CAN EFFICIENTLY PERFORM THE DISTRUBUTION TAKS NECESSARY TO IMPLEMENT THE CHANNEL STRATEGY. WHY ?

IMPORTANCE OF CHANNEL MEMBER SELECTION Example: At Goodyear’s Tire & Rubber Co. careful selection of channel members is given high priority As per its Annual Report: ……our philosophy is simple and logical. We win with winners. We align with customers (dealers) who are outstanding. We then are focused intensely on building their businesses not simply on selling tires. We have, by far, the best dealer network in the industry globally.

Channel Member Selection & Channel Design Selection Process (Search) Applying Selection Criteria ( Qualification / Screening) Securing the Channel Members (Choice)

Selection Process Finding Prospective Channel Members 1.Field sales organization - Salespeople are the best positioned to know about potential intermediaries. 2.Trade sources - Trade associations, Trade publications like, Industrial Distribution magazine, The Verified Directory of Manufacturers’ Representative. 3.Reseller inquiries – Direct inquiries from intermediaries interested in handling their product. 4.Customers - Willing to give frank opinions about the intermediaries who call on them. 5.Advertising - Trade magazine advertising. 6.Trade Shows - Annual conventions hold by Wholesale and retail trade associations. 7.Other sources - Chambers of commerce, banks, & local real estate dealers, Contacts from previous applications, Independent consultations, List brokers that sell lists of names of businesses, Business databases, Internet, Classified telephone directories or the yellow pages, Direct-mail solicitations.

Attract qualified marketing intermediaries EXAMPLES: Toyota first introduced its Lexus line in the United States, it had no trouble attracting new dealers. In fact, it had to turn down many would-be resellers. When Polaroid started, it could not get photography stores to carry its new cameras, and it had to go to mass-merchandising outlets. U.S. Time Company first tried to sell its inexpensive Timex watches through regular jewelry stores, most jewelry stores refused to carry them. The company then managed to get its watches into mass- merchandise outlets.

WHEN SELECTING INTERMEDIARIES !!! EVALUATE DIFFERENT CHARACTERSTICS OF MEMBERS LIKE: NUMBER OF YEARS IN BUSINESS PROFIT RECORD COOPERATIVENESS REPUTATION LINES CARRIED SIZE & QUALITY OF SALES FORCE LOCATION FUTURE GROWTH POTENTIAL

Applying Selection Criteria Credit & Financial Condition Sales Strength Product Lines Reputation Market Coverage Sales Performance Management Succession Management Ability AttitudeSize

SECURING THE CHANNEL MEMBERS SPECIFIC INCENTIVES FOR SECURING CHANNEL MEMBERS Good, profitable product lineAdvertising & promotional supportManagement assistance Fair dealing policies & Friendly relationships

Product line inducements Manufacturer offers good product line with strong sales & profit potential Stress value of good product line from channel members’ perspective

Advertising & promotion inducements To gain credibility To gain recognition

Management assistance inducements Training programs Financial analysis & planning Market analysis Inventory control procedures Promotional methods

MANUFATURER’S RESPONSIBILITY Good relationship based on trust Concern for their welfare As quoted by Pegram – “ Together they form a team and teamwork is essential if he association is to prove mutually benefitial.”

CASE STUDY FOCUS ON CHANNELS: EXOTIC MUSTARD, MAYO & SALSA AREN’T JUST FOR GOURMET SHOPS ANYMORE U.S. MARKET $5.5BILLION IN 2009 TO $7BILLION BY 2015 DRIVING KEY: 18 TO 34 YEARS SEEKING MORE NOVEL & EXOTIC CONDIMENTS. “GOLDEN AGE OF CONDIMENTS” – HUGE VARIETY COMPANY: WOEBER’S –OHIO BASED PREMIUM PRICED PRODUCTS CHANNEL PARTNERS CHOSED EARLIER: BRISTOL FARMS (14 CHAIN STORES IN CALIFORNIA) PREFERRED CURRENT CHANNEL PARTNERS: WAL MARTS, WHOLE FOODS CHANGE IN TREND: FROM CHAIN STORES TO MAINSTREAM SUPERMARKET CHAIN REASON: PROFITABLE, ATTRACTS AFFLUENT 18 TO 34 DEMOGRAPHICS