Chapter 7 Selecting the Channel Members

Channel Member Selection S election may or may not be the result of channel design. The last phase of channel design Firm may need additional outlets to allow for growth To replace channel members that have left

Selection & Distribution Intensity The greater the intensity of distribution The less the emphasis on selection

The Selection Process 1.Finding prospective channel members 3. Securing the prospective channel members as actual channel members 2. Applying selection criteria to determine the suitability of prospective channel members

Finding Members 1.Field sales organization 7. Other sources 5. Advertising 6. Trade shows 2. Trade sources 3. Reseller inquiries 4. Customers

Other Sources 1.Chambers of commerce, banks, & local real estate dealers 2.Classified telephone directories or the yellow pages 3.Direct-mail solicitations 4.Contacts from previous applications 5.Independent consultations 6.List brokers that sell lists of names of businesses 7.Business databases 8.The Internet

Selection Criteria Credit & Financial Condition Sales Strength Product Lines Reputation Market Coverage Sales Performance Management Succession Management Ability Attitude Size

Who Selects New Members? Producers & Manufacturers Wholesale Intermediaries Retail Intermediaries

Securing Channel Members Manufacturers ask: – Why should this company carry my products? Intermediaries ask: – Why should they want to distribute products through us?

Offering Inducements Good, profitable product line Advertising & promotional support Management assistance Fair dealing policies & Friendly relationships

Product Line Product line inducements: 1. Manufacturer offers good product line with strong sales & profit potential 2.Stress value of good product line from channel members’ perspective

Advertising & Promotion Consumer Market: Gain immediate credibility by using a strong program of national advertising. Advertising & promotion inducements Business Market: Gain recognition by using a strong program of trade paper advertising.

Management Assistance Prospective members want to know whether the Manufacturer will help with the following: training programs financial analysis & planning market analysis inventory control procedures promotional methods Management assistance inducements:

Fair Dealing & Friendly Relationship Channel Leader’s Responsibility: To convey to prospective channel members that he or she is genuinely interested in establishing a good relationship based on trust and concern for their welfare as both business Entities and as people