EXPLAIN THE NATURE AND
SCOPE OF CANNEL
MANAGEMENT
NCSCOS 4.08 A
WHAT IS CHANNEL MANAGEMENT?
WHO ARE ITS MEMBERS?
• The process of balancing allocation of
product inventory and pricing across
distribution channels.
• Channel members are anyone involved in
the channel management process
HOW DO CHANNEL MEMBERS ADD VALUE?
• Business use intermediaries to move their merchandise through the country
and the world
• The use of intermediaries results from their greater efficiency in making
goods available to target markets
• Offers the firm more than it can achieve on its own through the
intermediaries
WHAT ARE CHANNEL FUNCTIONS?
• Group 1 – Manufacturer
CHANNEL MARKET TASKS
The tasks are handled by different groups
•
Marketing
•
Packaging
•
Financing
• Group 2 - Wholesaler
•
Storage
•
Delivery
• Group 3 – Retailer
•
Merchandising
•
Personal Selling
WHEN WILL A CHANNEL BE MOST EFFECTIVE?
• When each member is assigned tasks it
can do the best
• All members cooperate to attain overall
channel goals
WHAT IS THE DIFFERENCE BETWEEN HORIZONTAL
AND VERTICAL CONFLICT?
• Horizontal Conflict
• Occurs among firms
at the same level of
the channel (ex.
Retailer to retailer)
• Vertical Conflict
• Occurs between
different levels of
the same channel
(ex. Wholesaler to
retailer)
CHANNEL MANAGEMENT DECISIONS
• Selecting Channel Members
• Identify characteristics that distinguish the best channel
members
• Managing and Motivating Channel Members
• Partner relationship management (PRM) is key
• Evaluating Channel Members
• Performance should be checked against standards
CHANNEL MANAGEMENT DECISIONS
1. Analyze Consumer Needs
2. Set Channel Objectives
3. Identify Major Alternatives
• Types of intermediaries
• Number of intermediaries
• Responsibility of intermediaries
CHANNEL MANAGEMENT IN A NUT SHELL
• The customer is the
puzzle. You need to
work with people to put
the puzzle together to
give the customer what
they want.