1. DEVELOPING MAJOR STRATEGIES Major Choices * Relative balance between direct sales and sales through intermediaries * Class of intermediary in terms of served markets * Types of intermediary in terms of served markets * Relative intensity of distribution by geographic area * Locus of distribution functions: the allocation of distribution tasks to particular channels in the distribution system * Franchise terms and conditions

2. Channels Functions: * Selling * Channels support * Physical distribution * Product modification and after-sale service * Risk assumption

3. CHANNEL MANAGEMENT DECISIONS Selecting Channel Members * Number of years in business, other lines carried, growth profit record, solvency, duration * Margins, co-op ad. Allowances, displays sales contest, long-term partnership * Evaluation Sales quota, average inventory levels, customer delivery times, treatment of damaged goods

4. COMPONENTS OF MARKET SEGMENT LEADERSHIP Channels Strength Direct salesforce *end-market presence Intermediaries *breadth of market coverage *resellers’ local market positions Channels entry barriers MARKET SEGMENT LEADERSHIP Installed Base Replacement sales Spare parts and service revenues Supplies and related equipment demand Product Superiority Product value-added *product functional performance * product line breadth *user technical support product customization Reseller value-added * supply availability * product customization * after-sale service

5. CHANNELS & PLC Intro Decline Growth Mature Growth Rate L R E. G. Specialty Store Higher Volume (dept. stores) Lower Cost (mass dist.) Lower Cost (discounters) HL Value Added By Channel