CHAPTER 9-

MOTIVATING
THE CHANNEL
MEMBERS
PRESENTED BY
Cabiling, Castillo, Dacayo,
Hernandez, Labao, Laperal,
Macario
 Finding out the Needs and Problems
1
of Channel Members

TOPICS 2 Offering support to Channel Members

Providing Leadership to Channel

3
Members
 Channel Management deals

with existing channels.

Channel Cooperation of Channel
Management Members
Distribution Objectives
FINDING OUT THE NEEDS
OF CHANNEL MEMBERS
The middleman does not consider himself a “hired link in a
chain forged by the manufacturer.”
The middleman acts first and foremost as a purchasing
agent for his customers, and only secondarily as a selling
agent for suppliers. His interest is in selling whatever
products his customers wish to buy from him.
The middleman views all the products he offers as a “family”
of items that he sells as a packaged assortment to individual
customers. He directs his selling efforts primarily at
obtaining orders for the assortment, rather than for
individual items.
Unless given some incentive to do so, the middleman will
not maintain separate sales records of brands sold.
Information that might be useful to manufacturers in
product development, pricing, packaging, or promotion
planning is “buried” in the middleman’s own records,
sometimes even purposely kept from suppliers.

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APPROACHES FOR
LEARNING ABOUT
MEMBER NEEDS AND
PROBLEMS

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 Model of Channel
Communication System

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 Research Studies of Channel
4 Additional Members
Approaches for
Research Studies by Outside
Learning About
Parties
Channel Member
Needs and Marketing Channel Audits
Problems Distributor Advisory
Councils
OFFERING SUPPORT TO CHANNEL
MEMBERS
The producer's or manufacturer's efforts to assist channel members in addressing their
demands and finding solutions to their issues are referred to as support for channel
members. Such encouragement ought to contribute to the development of a more highly
motivated channel membership.

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INTERORGANIZATIONAL SETTING
REQUIRES CAREFULLY PLANNED
PROGRAMS
Cooperative Arrangements
Partnership and Strategic alliance
Distribution programming

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 PROVIDING LEADERSHIP TO MOTIVATE
CHANNEL MEMBERS
No matter how the channel members are supported or how effectively the
channel manager has built a system for understanding their wants and
challenges, control must still be exercised through effective leadership
consistently in order to build a team of channel members that are highly
motivated.

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CHAPTER 10- PRODUCT
ISSUES IN CHANNEL
MANAGEMENT

New Product Planning and Channel

Management
The Product Cycle and Channel Management
Strategic Product Management and Channel
Management
Trading Down, Trading Up and Channel
Management
 A challenge faced by all producers and
manufacturers.

Channel members will encounter the following

questions:
What input, if any, can channel members provide
NEW PRODUCT for new product planning?
PLANNING AND What has been done to assure that new products
CHANNEL will be acceptable to the channel members?
Do the new products fit into the present channel
MANAGEMENT members’ assortments?
Will any special education or training be
necessary to prepare the channel members to
sell the new products effectively?
Will the product cause the channel members any
special problems?
NEW PRODUCT
PLANNING AND
CHANNEL
MANAGEMENT

Encouraging
Channel Member
Input for New
Product Planning Obtaining Channel member input promotes
increased enthusiasm and acceptance for new
product and also enhances channel member
cooperation.
NEW PRODUCT
PLANNING AND
CHANNEL
MANAGEMENT

Fostering Channel
Member
Acceptance of New For a new product to be successful, it must be
Products accepted by channel members. When Channel
members come to an agreement for new products,
Successful products are made and then passed on
to the final customers.
NEW PRODUCT
PLANNING AND
CHANNEL
MANAGEMENT

Fitting the New

Product into
Channel Member
Assortments Manufactured products must fit into retailer's
product mix to avoid dispute and to lessen
unnecessary inventory.
NEW PRODUCT
PLANNING AND
CHANNEL
MANAGEMENT

Educating Channel
Members about Channel managers must investigate the possible
New Products educational requirements of new products and plan
educational programs if needed to ensure that the
Channel members are knowledgable about the new
product's features.
NEW PRODUCT New products must be ensured trouble-free to
avoid negatively affecting Channel Members.
PLANNING AND Unsellable products will be just be a nuisance for
CHANNEL channel members.
MANAGEMENT
Example:

Making Sure New

Products Are
Trouble-Free
vs
 The Product life cycle (PLC) is
a model for describing the
THE PRODUCT LIFE states through which a
CYCLE AND product passes.

CHANNEL
MANAGEMENT a product typically follows a
curve, which can be divided into
four basic stages: introduction,
growth, maturity and decline.
PRODUCT LIFE CYCLE

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 is one of slow growth as the
INTRODUCTORY product begins to gain a
STAGE foothold in the market.
 is marked by rapid market
acceptance and relatively
high profits, as shown by the
GROWTH steeper, upward slopes of the
STAGE sales and profit curves during
this stage.
 is characterized by a decreasing
rate of sales growth (the slope of
the curve is less steep) as the
MATURITY market becomes more highly
STAGE saturated. Profits tend to peak and
then decline during the maturity
stage because of the heavy selling
costs necessary for the product to
hold its own against competition.
 occurs when sales decrease
DECLINE absolutely and profits plummet
STAGE quickly to the zero point.
 Strategic management of the
product line is a challenge
faced by virtually all
manufacturer.
STRATEGIC
PRODUCT Successful product strategies
MANAGEMENT depend on a variety of factors
AND CHANNEL such as the quality,
innovativeness or technological
MANAGEMENT sophistication of the products
themselves.
PRODUCT
DIFFERENTIATION AND
CHANNEL MANAGEMENT
Represents the manufacturer’s attempt to
portray a product or products as being different
from competitive products.
PRODUCT POSITIONING
AND CHANNEL
MANAGEMENT
Manufacturer’s attempt to have consumers
perceive products in a particular way relative to
competitive products.
PRODUCT LINE
EXPANSION/CONTRACTIO
N AND CHANNEL
MANAGEMENT
Product line expansion and pruning strategies
can create problems in dealing with channel
members because it is very difficult to find a
“perfect” blend of products in the line that will
satisfy all channel members.
TRADING DOWN, TRADING
UP AND CHANNEL
MANAGEMENT
Trading down refers to adding lower-priced
products or a different product line to a
product mix than had typically been offered in
the past.
PRODUCT BRAND
STRATEGY AND CHANNEL
MANAGEMENT
Involves a clever combination of design,
messaging, experience, and tactics to uniquely
identify a product and differentiate it from the
competition in its niche.
PRODUCT SERVICE
STRATEGY AND CHANNEL
MANAGEMENT
Refers to a marketing function whose primary
purpose is to expand products or services
based on the market’s evolution.
 Effective channel management
SUMMARY: requires that the channel
manager be aware of how channel
management interfaces with the
other variables of the marketing
mix: product, price, promotion
and logistics. The channel
manager should view the firm’s
strategies in each of these
marketing mix areas as resources
that can be employed for
improving the firm’s channel
management strategies.