Selecting the Channel Members

Submitted By:
Pooja Gupta – 1421149
 SELECTION OF CHANNEL MEMBERS

• THE MOST IMPORTANT FACTOR IS TO FIND

STRONG CHANNEL MEMBERS.

WHY ?
• SO THAT, THEY CAN EFFICIENTLY PERFORM THE
DISTRUBUTION TAKS NECESSARY TO IMPLEMENT
THE CHANNEL STRATEGY.
 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
Size
Strength

Product
Attitude
Lines

Management
Ability Reputation

Management Market
Succession Coverage
Sales
Performance
 SECURING THE CHANNEL MEMBERS
• SPECIFIC INCENTIVES FOR SECURING
CHANNEL MEMBERS
Good, profitable product line

Advertising & promotional support

Management 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