1. Chapter 12
Channel Situation & Performance Evaluation

2. Channel Performance Evaluation Defined
The process that the manufacturers objectively examine and evaluate the efficiencies and effects of the marketing channel system by systematical methods.

3. Channel Performance Evaluation Procedure
Identifying the total sale target
Setting channel evaluation index
Setting performance evaluation
system
Idenfitying the gap & making a channel behavior plan

4. Identifying the total sale target
Identifying the operative goal of the enterprise in detail and
decomposing them with a serise of sales goals,such as the
corporate goal, the business unit goal and the sale goal.

5. CPE based on the perspective of Society
Performance Evaluation
Efficiency
Effectiveness
Equity
Delivery
Incentive
Productivity
Profitablity
3E Model by Louis. W. Stern

6. CPE based on the perspective of Corporate
Based on the perspective of the corporate,the manufacturer could inspect the whole channel chain in four aspects that are the channel management organization ,the channel operating conditions ,the channel service quality and the channel economic effects.
The first three are mainly the quality analysis and the last one the quantity analysis based on the fiance.

7. The channel management organization
Inspection on the managers’qualities & abilities in the channel system
Inspection on the managers’ qualities & abilities in the channel system
In one distribution system, the ratio that the regional managers who have three years working experience with a education diploma accounts for is highly positive related with the qualities and abilities of the sale management of the channel oraganization.
The manufacturers must know whether the branch agency has a self-controlled retailing terminal or not.If it does have,the manufacturere must identify the its sales ratio accounting for the locative market.

8. The Channel Operating Conditions
Conflict
Smoothness
Coverage
Flow capability & Utilization
Interior Factors
Effort
Members Quantity
Members Prestige
Capital Strength
Mkting Ability
Exterior Factors
Competition Pressure
Policy & Legislation
Consumer Features
Needs Level
Economical Condition
Technology Development

9. The Channel Service Quality Evaluation
Customer complaints handling
Promotion Efficiency
Physical Distribution Efficiency
Information Communication

10. Financial Performance Evaluation
The distribution management can evaluate the economic benefits with the five performance evaluation tools.
Assets Management Analysis
Sales Analysis
Market Share Analysis
Distribution Costs Analysis
Profitability Analysis

11. Evaulation of Channel Members
Factors
Quantity of channel members
Products Feature
Importance of the channel members
The extent that the manufacturers control the channel

12. Evaulation of Channel Members
Standards
Sales of the channel members
Stocks the channel members are holding
Selling capabilities of the salesperson
Attitudes of the channel members
Competition the channel members are facing
General development Prospect of the channel members

13. Performance Audting Implementation
After setting a series of evaluation standards,the distribution management will evaluate the channel members with them.
General Methods Performance
Audting Implementation
Financial Performance Method of
Performance Audting(Contribution Rate Method)
Independent Performance Evaluation Method
Factors considered
Fixed Cost
Variable Cost
Direct Cost
Indirect Cost
Informal Combination of Multiple
criteria evaluation method
Formal Combination of Multiple
criteria evaluation method

14. Channel Warning System
Credit deterioration
Bad relationship with the customers
Many unoccupied distribution channels
Sustainable gorwth of channel costs
Inertia distributors
Backward customer relationship
management methods
Weaken radiating abilities & controlling
abilities
Malicious changing products
Warning Signals

15. Case
Burr bottled mineral water entering
into the USA market

16. Thank you for your time! 16