Some brands use both an indirect and direct channel, which essentially means they compete directly

with their channel partners. What concerns might arise from this channel strategy?

Problems associated with distribution of products can arise when channel partners give priority to
competitive products or deliver poor service to their customers. To ensure that the channel delivers
those benefits, you need to manage channel partners carefully and provide the right level of marketing
support.

 Poor Channel Management

Brands must appoint channel marketing managers to work in collaboration with channel partners. They
should be responsible for selecting partners, training and developing partners’ sales and marketing staff,
and monitoring performance against agreed targets. By building and maintaining relationships with the
distribution channel, the manager can identify potential problems and deal with them before they
become serious.

 Inadequate Support to Partners

Channel distribution problems can occur when your channel partners have inadequate product or
market knowledge. The result is poor service to your customers and lost sales opportunities. Your
marketing team can overcome this problem by providing training programs and guides that improve
product knowledge.

Offer certification courses that enable individuals and partner companies to qualify for higher status in
your channel. Provide support for channel marketing programs in the form of funding or marketing
material, such as sample advertisements or direct marketing campaigns.

 Poor Customer Service Standards

Channel partners are responsible for relationships with the customers they do not serve directly. If
channel partners offer poor standards of service, such as late deliveries, inaccurate invoicing or delays in
dealing with customer enquiries, customer satisfaction will drop with an impact on the brand’s own
reputation. This means communications between you and your partners is critical. Brands must produce
a set of customer service standards and communicate them to distributor teams.

 Poor Motivation

Unless brands have exclusive distribution arrangement with channel partners, they must motivate
partners so they can give their full commitment the brand’s products, rather than other products that
they stock. Drive revenue to the channel by communicating the benefits of dealing with authorized
channel partners. Encourage channel partners to build sales of your products by operating incentive
programs tied to revenue targets.

 Forgetting the Brand

Marketing products through a distribution channel can dilute the strength of your brand if channel
partners forget to use your identity standards in their communications. Customers will receive an
inconsistent set of communications and sometimes conflicting messages about brand products and the
company.

For example, if you sell a high-end shampoo for a premium price in salons and one of your channel
partners starts selling to big box stores, your sales might temporarily increase, but your core customers
who want a high-end shampoo will eventually leave you.

We can overcome the problem by issuing brand guidelines and reviewing channel partner
communications material before they are released. Channel marketing managers can take responsibility
for identity standards if you have a small number of distributors. For larger channels, appoint a
marketing agency to manage a channel marketing program.

REFERENCES

Marketing MO: Distribution Channels -- Not Sexy, but Smart

MMC Learning: Distribution Channels -- Importance of Distribution