Page 214 - DMGT408DMGT203_Marketing Management

Unit 9: Managing Marketing Channels

Producer/Manufacturer Factor Notes

Finally, there are several selection factors that involve the producers themselves. Following are
the producer factors influencing channel selection:
1. Company Objective: The overall objective of a company influences its marketing channel
choice.
2. Company Resources: Various distribution options require different levels of resources
and investment.
3. Desire for Control: The need to control various aspects of the marketing process influences
a producer’s selection of the channel system. This control can encompass pricing,
positioning, brand image, customer support and competitive presence.
4. Breadth of Product Line: Producer with several products in a related area faces a channel
situation that is different from those with one or two products.

Training of Channel Members

The next important task is to train the channel members. This is because once appointed;
intermediaries become internal customers for the firm. Secondly, in many instances intermediaries
represent the company and its products to the consumers. The training programs can be on
selling skills, on business processes and other soft skills required to serve the end customer. The
training programs should cover customer contact and interaction management, selling skills,
relationship building skills and business development skills. The company should undertake a
continuous training calendar for its employees.

Motivation Channel Members

Channel motivation involves developing compensation management programs and also giving
non-fringe benefits for building long-term loyalty. The idea of developing a channel motivational
program is to build their capability to perform better and take additional responsibility. It
should also improvise its channel offering to provide superior value to consumers and channel
members. The marketing manager should understand his need and then design motivational
programs to stimulate peak level performance. The relationship should be developed based on
mutual cooperation, trust and scientific distribution programming. The most challenging aspect
is gaining intermediaries’ cooperation for which one needs to use positive motivational tools
like higher margins, cash discounts, quantity discounts, cooperative advertising, advertising
allowances and point of purchase displays. Many marketing managers also use negative tools,
like slowing down of distribution, reduction in cash allowance and credit period to threaten
them to commit for higher sales.
A company should make use of the following strategies for motivating intermediaries.

1. Relationship Marketing: Relationship starts on the premise that in a variety of products,
mass marketing has run its course, and that conventional methods of advertising are not
delivering the kind of results they are supposed to. Here companies like Tupperware,
Avon, Amway, Modi Care do not distribute their products through the traditional
distribution system. Relationship marketing puts stress on company’s relation with the
distributor. A good relationship with the distributor will create long-term relations and
improve the sales.

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