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Unit-4 : 

Unit-4

Channel management : 

Channel management Selection Motivation Training Evaluation Managing Conflict

Selecting Channel Members : 

The Selection Process:- Finding prospective Channel Members Applying Selection Criteria to determine the suitability of prospective channel members Securing the prospective channel members Selecting Channel Members

Finding Prospective Channel Members : 

Finding Prospective Channel Members Field Sales Organization Trade Sources Reseller Inquiries Customers Advertising Tradeshows Othersources

Applying Selection Criteria : 

Applying Selection Criteria Generalized List of Criteria Credit and Financial condition Sales strength Product Lines Reputation Market Coverage Sales Performance Management Succession Management ability Attitude Size

Securing the channel members : 

Securing the channel members Specific Inducement for securing channel members Product Line Advertising and Promotion Management Assistance Fair dealing and friendly relationships

MOTIVATION : 

MOTIVATION Financial rewards Non Financial rewards

Financial Rewards include : 

Financial Rewards include Higher Margins Extended credit time Bonuses Reimbursement of expenses

Slide 9: 

The problem with most financial rewards, particularly higher margins and bonus, is that the wholesalers use them to reduce their prices for their customers.

Non Financial rewards include : 

Non Financial rewards include Contests Public recognition for higher performance through momentos paid holidays at company expense Trainings

COMPENSATING CHANNEL MEMBERS : 

COMPENSATING CHANNEL MEMBERS According to Stern and Ansary, Compensation to intermediaries should be paid only for what they actually do with in the system.

Forms of compensating intermediaries : 

Forms of compensating intermediaries Quantity Discount Trade Discount Commission

Quantity Discount : 

Quantity Discount A form of compensation given to an intermediary, whether agent or merchant, in respect of the quantum of sale.

Trade Discount : 

Trade Discount A form of compensation usually adopted to compensate a merchant middlemen who is appointed as a distributor or dealer and agrees to various forms of channel controls exercised by a manufacturer for whom they work.

Commission : 

Commission It is paid to agent intermediaries for the services rendered by them which usually include assisting in ownership transfer, negotiation, order booking, financing, promotion, debt recovery etc. It is calculated as a percent of the total amount or volume of sales generated by them.

TRAINING : 

TRAINING It is a process of providing the intermediaries with specific skills for performing their task better and helping them to correct deficiencies in their sales performance. Training Program creates a Win-Win situation for both individual and the organization.

TRAINING : 

TRAINING It is a process of providing the intermediaries with specific skills for performing their task better and helping them to correct deficiencies in their sales performance. Training Program creates a Win-Win situation for both individual and the organization.

Phases Of Developing And Conducting Training : 

Phases Of Developing And Conducting Training Successful Program Consist of four phases:1.Training Assessment2. Program Design3. Reinforcement4. Evaluation

Phases of Developing and Conducting Training : 

Phases of Developing and Conducting Training Establish program objectives Identify who should be trained Identify training needs and specific goals How much training is needed? Training Assessment

Slide 20: 

Sales Training Program Objectives Higher Morale Lower Turnover of members Increased Sales Productivity Improved Communication Improved Customer Relation Improved Self Management Objectives of Training Program

Slide 21: 

Where should training be done? Who should do the training? Content of training Program Design Teaching methods used in training program

What Should The Content Of The Training Be? : 

What Should The Content Of The Training Be? Attitude toward Selling and toward Training Knowledge of the Company Product Knowledge and Application Knowledge of Competitive Products Knowledge of Customers Knowledge of Business Principles Selling Skills Relationship-Building Skills

Slide 23: 

Determine how training will be reinforced What outcomes will be evaluated? What measures will be used? Reinforcement Evaluation

Evaluating Member Performance : 

Evaluating Member Performance 14 Objective 1: The importance of channel member performance equals that of employee evaluations within the firm. The channel manager works with individual firms rather than with individual employees. The setting is interorganizational rather than intraorganizational. Except

Attitudes of Channel Members : 

Attitudes 4 Negative ones often addressed after they have contributed to poor performance Attitudes of Channel Members Should be evaluated independently of sales data Not usually evaluated unless sales performance is unsatisfactory

Competition : 

14 Competition Channel manager should consider two types of competition: 1. Competition from other intermediaries 2. Competition from other product lines carried by the manufacturer’s own channel members

Competition : 

14 Competition Channel manager should consider two types of competition: 1. Competition from other intermediaries 2. Competition from other product lines carried by the manufacturer’s own channel members

General Growth Prospects : 

General Growth Prospects 14 Key issues for evaluating channel member growth prospects: Past performance Overall performance Expansion or improvement of organization Level of growth and qualification in personnel Management, age, health, or succession arrangements Adaptability & overall capacity to meet market expansions Member’s estimates of its own medium- & long-range outlooks

Applying Performance Criteria : 

Applying Performance Criteria 14 Objective 6: Three Approaches Separate performance evaluations on one or more criteria 2. Multiple criteria combined informally to evaluate overall performance qualitatively 3. Multiple criteria combined formally to arrive at a quantitative index of overall performance

Separate Performance Evaluations : 

Separate Performance Evaluations 14 Commonly used when the number of channel members is very large & when criteria are limited to no more than sales performance, inventory maintenance, & possible selling capabilities

Multiple Criteria Combined Informally : 

Multiple Criteria Combined Informally 14 Operational performance measures obtained Managerial judgment used to combine performance measures Qualitative judgment made about overall channel member performance

Multiple Criteria Combined Formally : 

14 Multiple Criteria Combined Formally 5 Steps Criteria & associated operational measures are decided on Weights assigned to each of the criteria Each member evaluated is rated on each of the criteria Score on each criterion multiplied by weight for that criterion Weighted criterion ratings summed to yield overall performance rating for each member

Recommending Corrective Actions : 

14 Recommending Corrective Actions Channel manager should attempt to find out why members have performed poorly Develop concrete & practical approaches to actively seek information on member needs and problems Programs of member support must be congruent with member needs & problems Constraints imposed by interorganizational setting of marketing channel must be understood Objective 7:

What is Channel Conflict? : 

Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 15-34 What is Channel Conflict? Channel conflict occurs when one member’s actions prevent another channel from achieving its goal. Types of channel conflict Vertical Horizontal Multichannel

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