There is a clearly defined process of channel management. In this process, there are five steps and they are explained below:
Sources Identification – The first step is to identify the sources or references. When a company enters a new the market it should do market research to identify the sources through different methods. A company can contact various trade associations and can take part in trade events so as to gain information about the market, distributors, their reputation, and consumers.
Selection Criteria – The second step is to select the criteria for channel management. The factors are knowledge of the market, knowledge of consumer preferences, reputation, customerâ€™s demands, policies, market trends and competence of management etcetera needs to consider before selecting channel intermediaries. After accessing this information, a manufacturer can wisely choose an intermediary.
Providing training to intermediaries to sell – Training for intermediaries is necessary. Manufacturers must provide necessary training to intermediaries so that they can sell the product efficiently and effectively. Only through training can an employee get information about the organization and features that a product offers.
Motivating Intermediaries – Motivation is a necessary for channel management. The company must drive intermediaries to sale more and more. Motivation can be monetary or non-monetary. For instance: a company can provide monetary motivation in the forms of a bonus or extra commission on sales and can non-monetarily motivate them by appreciating and recognizing their work.
Assessment of Intermediaries – It is essential for a company to access the work done by intermediaries. Only by accessing the work done by intermediaries can a company know about their efficiencies and sales made by them.
Problems Associated with Channel Management
There are multitudes of problems associated with channel management. Some of them are as follows:
Sometimes there is a communication gap between manufacturer and distributor of product which is a very big problem and directly affects the business for both manufacturer and distributor.
Due to multiple channels there is a reduction in sales of a product.
Distributors may start selling product of competitors and there arises a conflict. This happens when there is excessive competition.
Delay in supplies and shipment of the product.
Low zeal amongst distributors.
Tips to Avoid Conflict and Resolve Problems
Regularly communicate with the distributor, keep in touch with them and maintain a healthy relationship with distributors. Manufacturers must define goals and objectives clearly to distributors to avoid any kind of conundrum. The manufacturer and distributor has to be on the same page to achieve success.
Manufacturers must communicate with their distributors and make them understand about the brand, product it offers and features the product offers so that distributors become effective and efficient.
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