1

Success Strategies in Channel Management

Outline

2

Main Topic Areas

• Introduction

• Building Channels

• Managing Channels

• Implementation

• Specific Topics– Global Challenges

– Legal Issues

– Pricing

– Channels for Services

3

Channel Design and

Implementation (40)Sec3.ppt

Marketing Channels (23)

Sec2.ppt

Preparing a Marketing for Channels Plan (9)

Sec1.pptLogistics and Supply

Chain Management (51)

Sec4.ppt

New and Different Channel Forms and

Trends (62)

Sec6.ppt

Introduction

4

Vertical Integration: Owning the Channel (83)

Sec22.ppt

Selection Criteria (77)Sec9.ppt

Channel Structure and Membership Issues (71)

Sec9.ppt

Channel Implementation (67)

Sec7.ppt

Building Channels

5

Managing Conflict to Increase Channel Coordination (138)

Sec16.ppt

Channel Power: Getting It, Using It,

Keeping It (120)

Sec14.ppt

Bargaining for Influence with Channel

Members (116)Sec13.ppt

Key Account Management in Collaborative

Relationship Building (108)

Sec12.ppt

Partner Relationship Management (89)

Sec10.ppt

Managing Channels

6

Selection and Termination Policies 176

• Sec20.ppt

Making the Plan Work Effectively

(154)Sec18.ppt

Performance Measurement

(149)Sec17.ppt

Implementation

7

Channels for Services 59

Sec5.ppt

Legal Issues (161)• Sec19.ppt

Pricing (180)• Sec21.ppt

Global Challenges and Opportunities

(130)

Sec15.ppt

Specific Topics

8

Success Strategies in Channel Management

Power Point Presentations by Sections

9

Establishing and Implementing

The Value StrategySec1.ppt Strategic

ConsiderationsSec1-1.ppt

Factors in Deriving Economic Value

Sec1-2.ppt

Preparing a Marketing Plan for ChannelsSec1.ppt

10

Delivering Value -The Search for a Sustainable Competitive Advantage A strategy that does not last is not effective or optimum.. marketing channels can be viewed as exchange facilitator – or deliverers of value.

Delivering ValueFor marketing channels to succeed in a competitive marketplace, independent marketing organizations must combine their resources to pursue common goals.

Focus on What Markets Want

Marketing, Exchange and the Value Concept

Value Driven MarketingUnderstand the Value; Create/Configure the Value; Communicate the Value; Deliver Value.

Deliver Value/Delivered Value

Strategy and Planning

Specific entrepreneurial aspects of the strategy formation

Establishing and Implementing The Value

Strategy Sec1.ppt

11

1. Competition and Co-operation

The basic assumption in Strategy is competition. Competitive behaviour sees organisations taking an adversarial role in all exchange situations

2. Monopolistic/Oligopolistic Market Behaviour

The problem with building a defensive wall is that one loses the benefits of competition – improved performance.

3. Co-operative Market Behaviour

Co-operative behaviour is characterised by organisations exhibiting behaviour that focuses primarily on co-operation with market supporters – (strategic relationship building to leverage collaborative efforts.

4. Syncretic Market Behaviour The attempt to achieve a dynamic balance between positives to be found in both competitive and co-operative strategies

Competition Sec1-1.ppt

12

Value and Resource ScarcityValue and Market

Information

Cooperation

Information: The Core of Transaction Costs

Transaction-Specific Assets

Specific Human Assets

Brand Capital

Time Specificity

Preparing a Marketing Plan for Channels

Factors in Deriving Economic Value

Sec1-2.ppt

13

Marketing Channels Creating Customer Value via Channels of Distribution\

Components of Customer Value

form, place,

possession, and time

Marketing Channels: Structure and Functions

Demand-Side Factors Facilitation of Search, Adjustment of Assortment Discrepancy, Routinisation of Transactions Reduction in Number of Contacts.

What Is The Work Of The Marketing Channel?

Marketing Channel Membership

Customer Relationship ManagementThree types of channel relationships exist:Supplier Relationships.Customer Relationships.Lateral Relationships.

SIFTing

Marketing Channels Sec2.ppt

14

3.1 Channel Access Formats

Sec3.1.ppt

Section 3 –Channel Design and

Implementation

Channel Design and Implementation

Sec3.ppt

15

Channel Design and Implementation Channel Design:

Segmentation

Channel Selection

Channels Type Options

Establish New Channels or Refine Existing Channels?

Channel Access Formats

Sec3.1.ppt

16

Logistics and Supply Chain Management

The Importance of Logistics in Channels

Inventory Management in

Marketing Channels

Inventory Holding Costs

Reducing Inventory

Pseudo Inventory Reduction

Real Inventory Reduction

Sec4-1.ppt

Fulfilment and Transportation

Documentation

Critical Supply Chain Elements

Supply Chain Management

Efficient Consumer Response

Changes in Merchandising

Category Management

Physical Efficiency versus Market

Responsiveness

Logistics and Supply Chain Management

Sec4.ppt

17

Inventory Management

Inventory Holding Costs

Reducing Inventory

Inventory – Demand

Uncertainty

Pseudo Inventory Reduction

Real Inventory Reduction

JIT

Inventory Management in Marketing Channels Sec4-1.ppt

18

Issues Regarding Distribution Intensity

and Vertical Restraints

Coverage versus Assortment

Why Downstream Channel Members Dislike Intensive

Distribution

How Channel Members Drop

Brands

Degree of Category Exclusivity

The Nature of the Value Offer Category

Brand Strategy: Quality Positioning and Premium Pricing

Channel ImplementationDistribution Intensity and Vertical

Restraints 7 - Struct and Membership.doc

19

Who Should Be In The Channel?

Should Intermediaries Be Used at All?

What Types of Intermediaries

Should Be Used?

Flows to Be Performed, Appropriate

Intermediary Choices

Which Specific Intermediaries Should

Be Used?How Many Channel

Members Should There Be At A Given Level of

the Channel?

A Single Channel or Multiple Distribution?

The Impact Of Structural Decisions On Channel

Coordination

Channel Structure and Membership Issues

8 - Selection Criteria.doc

20

Distributor and Agent Selection Criteria Recruiting and

Screening New Prospects

Recruiting as a Continuous Process.

ScreeningCredit

Personality

Business and Operational Criteria

Final Selection Criteria - SPEAR

Channel Candidate Inducements

Business Policies that Bond Your Channel to

You

Preparing a Business Policy

Statement

Distributor and Agent Selection Criteria

Sec9.ppt

21

The Benefits of Strategic Partnerships in Channel

Strategy

Principals That Drive Improved Channel

Collaboration:

All partnering is based on a few common

denominators:

Strategic Alliances: Their Nature and the Motives for Creating

Them

Guidelines that can help in partnering with

customers and suppliers

Things that cause bad dealer relations

Objectives In Dealer Relations

Complaints About Dealers

Why Forge a Strategic Distribution Alliance?

Upstream and Downstream Motives

Do Alliances Outperform Ordinary Channels?

Positive Channel Relationships

Partner Relationship Management

Sec10.ppt

22

Motivating New Channel Members

11.2 Motivational Concepts and Processes

Sec11.2.ppt

Motivating New Channel MembersSec11.ppt

23

Motivating New Channel Members Securing Recruits for the Long

Term

The Channel Relationship Life Cycle

Improving Service to Channel Partners

What inspires a channel member's

confidence?

How the Other Side Gauges Your Commitment

Actions That Bind Suppliers to Distributors

The Fundamental Role of Economic Satisfaction

What produces non-economic satisfaction?

How Do You Create Trust in a Channel?

Motivational Concepts and ProcessesSec11.2.ppt

24

Push Strategies

Pull Strategies

Sales and Product (Value Offer) Training

Here are a few ways to give your new

relationship a positive foundation.

Guidelines for Great Channel Partnerships

Motivating New Channel Members

Motivational Concepts and ProcessesSec11.2.ppt

25

Key Account Management

Stages in KAMUncoupling-KAM

External Causes of Uncoupling:

Changing market positions

Financial problems

Inter-relational causes of uncoupling:

Breach of TrustCultural MismatchQuality Problems

Analysing The Potential For

Partnership/Synergy

Key Account Quiz

Key Account Management in Collaborative Relationship

Building Sec12.ppt

26

Bargaining for Influence with Channel Members

Desired Coordination

Producer-Specific Investments by

Downstream Channel Members

Dependence Balancing

Trading Territory Exclusivity for

Category Exclusivity

Reassurance

Using Selectivity to Stabilize Fragile Relationships

The Price of the Concession

Exclusive Dealing

Saving Costs by Limiting the Number of

Trading Partners

Stimulating the Benefits of Selectivity While

Maintaining Intensive Coverage

Bargaining for Influence with Channel

Members

Sec13.ppt

27

Channel Power

Power in Channel Implementation

Power Defined

Why Marketing Channels Require

Power

Power as the Opposite of Dependence

Measuring DependenceSources of PowerThe Balance Of Power

Imbalanced Dependence

Influence Strategies

How to Frame an Influence Attempt

Channel Power: Getting It, Using It, Keeping It

Sec14.ppt

28

Reasons for International Exchange

Relationships

Types of International Exchange

Relationships

Multinational Exchange Relationships

Global Exchange Relationships

Transnational Exchange Relationships

Indirect Marketing Channels

International Marketing Channels and the

Environment

Sociocultural Factors Technological Factors

Selecting International Exchange Partners

the Five Cs

Develop Flexible Transaction Structures

Success and Failure Factors

Global Partner Selection Factors

Global Challenges

and Opportunities

Sec15.ppt

29

Managing Conflict to Increase Channel

Coordination

Forms of Channel Conflict Assessing the Degree

and Nature of Channel Conflict

Measuring Conflict

When Conflict Is Desirable

When Is Conflict Functional?

Major Sources of Conflict

Competing Goals

Differing Perceptions of Reality

Clashes Over Domains

Multiple ChannelsFuelling Conflict

Conflict Resolution Strategies

Co-optation

Third-Party Mechanisms

Building Relational Norms

Information Exchange

Styles of Conflict Resolution

Accommodation

Repeated Compromise

Competition

Collaboration

Managing Conflict to Increase Channel

Coordination Sec16.ppt

30

Performance Measurement

A Framework for Developing Measures of Channel Member

Performance

Direct and Indirect Measures

Financial Measures

Channel Member Evaluation

Performance Measurement

Sec17.ppt

31

Implementing, Measuring and

Assessing the Value Exchange Plan

Key Components of the Plan

Implementing the Plan

Structures for Implementation

Effective communication

Dealing with Failure

Strategic Tunnel Vision

Perfectionism

Success and Commitment

Controlling the Marketing Channels Program

Measuring and Assessing Performance

Financial Measures

Non-Financial Measures

Customer Service Measurement

Implementation - Making the Plan Work Effectively

Sec18.ppt

32

Legal Constraints on Marketing Channel

Policies

Market Coverage Policies

Pricing Policies

Discounts

Product Policies

Exclusive Dealing

Product Line PoliciesPromotional

Allowances and Services

Legal Issues Sec19.ppt

33

Selection and Termination Policies

International Variations

Terminating Agents and Distributors

Termination as Strategy

Confusion Over Terms

Common Ground Rules

Selection and Termination Policies

Sec21.ppt

34

Eight Stages In Establishing Prices

Pricing Policy and Methods

Price Cutting

Buyer Evaluation

Price and Value

Common Pricing and Methods

Competition-Based Methods

Profit-Based Methods

Competition Oriented Pricing

Discounts and Allowances

Segmented Pricing

Pricing in Channels

Sec21.ppt

35

Vertical Integration: Owning the Channel

Make or Buy: A Critical Determinant of

Company Competencies Degrees of Vertical

Integration

Deciding When to Vertically Integrate

Forward

Outsourcing as the Starting Point

Six Reasons to Outsource

DistributionVertical Integration

Forward When Competition Is Low

Important forms of company-specific

capabilities

Vertical Integration: Owning the

Channel Sec22.ppt

36

Channels for Services

Direct Delivery of Value

Delivery of Value via Intermediaries

Independent Service Channels

Innovations in Methods of Distributing Services

Channels for Services

Sec6.ppt