Success Strategies in Channel Management

LECTURE 4

Main Topic Areas

Introduction

Building Channels
Managing Channels Implementation Specific Topics
Global Challenges Legal Issues

Pricing Channels for Services

2

Preparing a Marketing for Channels Plan

Sec1.ppt

Logistics and Supply Chain Management

Sec4.ppt

Marketing Channels
Sec2.ppt

Introduction

Channel Design and Implementation

Sec3.ppt

New and Different Channel Forms and Trends

Sec6.ppt
3

Channel Implementation
Sec7.ppt

Selection Criteria
Sec9.ppt

Building Channels

Channel Structure and Membership Issues

Sec9.ppt

Vertical Integration: Owning the Channel

Sec22.ppt

Partner Relationship Management

Sec10.ppt

Bargaining for Influence with Channel Members

Sec13.ppt

Managing Channels

Key Account Management in Collaborative Relationship Building

Sec12.ppt

Channel Power: Getting It, Using It, Keeping It

Sec14.ppt

Managing Conflict to Increase Channel Coordination Sec16.ppt

5

Implementation

Performance Measurement
Sec17.ppt

Making the Plan Work Effectively

Sec18.ppt

Selection and Termination Policies

Sec20.ppt

Global Challenges and Opportunities

Sec15.ppt

Legal Issues
Sec19.ppt

Specific Topics

Channels for Services

Sec5.ppt

Pricing
Sec21.ppt

Success Strategies in Channel Management

Power Point Presentations by Sections

Establishing and Implementing The Value Strategy

Strategic Considerations

Factors in Deriving Economic Value

Preparing a Marketing Plan for Channels

Sec1.ppt 9

Delivering Value -The Search for a Sustainable Competitive Advantage

A strategy that does not last is not effective or optimum.. marketing channels can be viewed as exchange facilitator or deliverers of value.

Specific entrepreneurial aspects of the strategy formation

Delivering Value For marketing channels to succeed in a competitive marketplace, independent marketing organizations must combine their resources to pursue common goals.

Focus on What Markets Want

Marketing, Exchange and the Value Concept

Strategy and Planning

Establishing and Implementing The Value Strategy Sec1.ppt

Deliver Value/Delivered Value

Value Driven MarketingUnderstand the Value; Create/Configure the Value; Communicate the Value; Deliver Value.
10

1. Competition and Cooperation The basic assumption in Strategy is competition. Competitive behaviour sees organisations taking an adversarial role in all exchange situations

2. Monopolistic/Oligopolistic Market Behaviour The problem with building a defensive wall is that one loses the benefits of competition improved performance.

3. Co-operative Market Behaviour Co-operative behaviour is characterised by organisations exhibiting behaviour that focuses primarily on cooperation with market supporters (strategic relationship building to leverage collaborative efforts.

4. Syncretic Market Behaviour The attempt to achieve a dynamic balance between positives to be found in both competitive and cooperative strategies

Competition
Sec1-1.ppt 11

Value and Resource Scarcity Value and Market Information

Preparing a Marketing Plan for Channels Factors in Deriving Economic Value

Sec1-2.ppt

Cooperation

Information: The Core of Transaction Costs Transaction-Specific Assets

Specific Human Assets
Brand Capital Time Specificity 12

Marketing Channels Creating Customer Value via Channels of Distribution\ Customer Relationship Management Three types of channel relationships exist: Supplier Relationships. Customer Relationships. Lateral Relationships.

Components of Customer Value form, place, possession, and time

Marketing Channels: Structure and Functions

SIFTing

Marketing Channels
Sec2.ppt

Demand-Side Factors Facilitation of Search, Adjustment of Assortment Discrepancy, Routinisation of Transactions Reduction in Number of Contacts.

Marketing Channel Membership

What Is The Work Of The Marketing Channel?

13

Section 3 Channel Design and Implementation

3.1 Channel Access Formats Sec3.1.ppt

Channel Design and Implementation

Sec3.ppt 14

Channel Design and Implementation

Channel Design: Segmentation

Channel Selection
Channel Access Formats
Sec3.1.ppt

Channels Type Options Establish New Channels or Refine Existing Channels?

15

Logistics and Supply Chain Management Supply Chain Management

Efficient Consumer Response Changes in Merchandising

The Importance of Logistics in Channels

Inventory Management in Marketing Channels

Inventory Holding Costs

Physical Efficiency versus Market Responsiveness

Reducing Inventory

Pseudo Inventory Reduction

Real Inventory Reduction

Category Management Fulfilment and Transportation Critical Supply Chain Elements

Sec4-1.ppt

Documentation

Logistics and Supply Chain Management

Sec4.ppt

16

Inventory Management

Inventory Holding Costs

Reducing Inventory JIT Inventory Demand Uncertainty Real Inventory Reduction

Pseudo Inventory Reduction

Inventory Management in Marketing Channels

Sec4-1.ppt 17

Coverage versus Assortment Issues Regarding Distribution Intensity and Vertical Restraints Why Downstream Channel Members Dislike Intensive Distribution

Brand Strategy: Quality Positioning and Premium Pricing How Channel Members Drop Brands
Degree of Category Exclusivity

The Nature of the Value Offer Category

Channel Implementation Distribution Intensity and Vertical Restraints

7 - Struct and Membership.doc 18

Who Should Be In The Channel?

Should Intermediaries Be Used at All?

What Types of Intermediaries Should Be Used?

Channel Structure and Membership Issues 8 - Selection Criteria.doc The Impact Of Structural Decisions On Channel Coordination

Flows to Be Performed, Appropriate Intermediary Choices

A Single Channel or Multiple Distribution?

Which Specific Intermediaries Should Be Used? How Many Channel Members Should There Be At A Given Level of the Channel?
19

Distributor and Agent Selection Criteria

Recruiting and Screening New Prospects

Business Policies that Bond Your Channel to You

Preparing a Business Policy Statement Channel Candidate Inducements

Recruiting as a Continuous Process.

Screening
Credit Personality Business and Operational Criteria

Final Selection Criteria - SPEAR

Distributor and Agent Selection Criteria Sec9.ppt

20

The Benefits of Strategic Partnerships in Channel Strategy

Strategic Alliances: Their Nature and the Motives for Creating Them

Do Alliances Outperform Ordinary Channels?

Principals That Drive Improved Channel Collaboration:

Why Forge a Strategic Distribution Alliance?

Upstream and Downstream Motives

Positive Channel Relationships

All partnering is based on a few common denominators:

Partner Relationship Management

Sec10.ppt

Things that cause bad dealer relations Objectives In Dealer Relations Complaints About Dealers

Guidelines that can help in partnering with customers and suppliers

21

Motivating New Channel Members

11.2 Motivational Concepts and Processes

Sec11.2.ppt

Motivating New Channel Members

Sec11.ppt 22

Motivating New Channel Members

Securing Recruits for the Long Term

The Channel Relationship Life Cycle

Motivational Concepts and Processes Sec11.2.ppt

Improving Service to Channel Partners

How Do You Create Trust in a Channel?

What inspires a channel member's confidence?

The Fundamental Role of Economic Satisfaction

How the Other Side Gauges Your Commitment

Actions That Bind Suppliers to Distributors

What produces noneconomic satisfaction?

23

Push Strategies

Here are a few ways to give your new relationship a positive foundation.

Pull Strategies

Sales and Product (Value Offer) Training Motivating New Channel Members Motivational Concepts and Processes
Sec11.2.ppt

Guidelines for Great Channel Partnerships

24

Stages in KAM Uncoupling-KAM

Key Account Management

Key Account Quiz

Inter-relational causes of uncoupling: Breach of Trust Cultural Mismatch Quality Problems

Analysing The Potential For Partnership/Synergy

External Causes of Uncoupling:

Changing market positions Financial problems

Key Account Management in Collaborative Relationship Building Sec12.ppt

25

Bargaining for Influence with Channel Members

Desired Coordination Producer-Specific Investments by Downstream Channel Members

Bargaining for Influence with Channel Members Exclusive Dealing Saving Costs by Limiting the Number of Trading Partners Stimulating the Benefits of Selectivity While Maintaining Intensive Coverage
Sec13.ppt

Dependence Balancing Trading Territory Exclusivity for Category Exclusivity Reassurance Using Selectivity to Stabilize Fragile Relationships The Price of the Concession

26

Channel Power
Power in Channel Implementation

Channel Power: Getting It, Using It, Keeping It

Sec14.ppt

Power Defined

Influence Strategies How to Frame an Influence Attempt

Why Marketing Channels Require Power

Power as the Opposite of Dependence The Balance Of Power Imbalanced Dependence

27

Sources of Power

Measuring Dependence

Reasons for International Exchange Relationships

Types of International Exchange Relationships

Multinational Exchange Relationships Global Exchange Relationships Transnational Exchange Relationships

Global Challenges and Opportunities

Sec15.ppt

Success and Failure Factors

Global Partner Selection Factors Develop Flexible Transaction Structures Indirect Marketing Channels

Selecting International Exchange Partners

the Five Cs

International Marketing Channels and the Environment

Sociocultural Factors Technological Factors

28

Managing Conflict to Increase Channel Coordination Managing Conflict to Increase Channel Coordination
Sec16.ppt

Forms of Channel Conflict

Assessing the Degree and Nature of Channel Conflict

Measuring Conflict

Styles of Conflict Resolution

Accommodation Repeated Compromise Competition

When Conflict Is Desirable

When Is Conflict Functional?

Collaboration

Major Sources of Conflict

Conflict Resolution Strategies
Co-optation Third-Party Mechanisms Building Relational Norms Competing Goals Differing Perceptions of Reality

Fuelling Conflict

Clashes Over Domains Multiple Channels

Information Exchange
29

Performance Measurement

Channel Member Evaluation

A Framework for Developing Measures of Channel Member Performance

Performance Measurement
Sec17.ppt

Direct and Indirect Measures

Financial Measures

30

Implementing, Measuring and Assessing the Value Exchange Plan

Key Components of the Plan Implementing the Plan Structures for Implementation

Controlling the Marketing Channels Program Measuring and Assessing Performance

Financial Measures Non-Financial Measures Customer Service Measurement

Effective communication

Implementation - Making the Plan Work Effectively

Sec18.ppt

Dealing with Failure

Strategic Tunnel Vision Perfectionism Success and Commitment

31

Legal Constraints on Marketing Channel Policies

Market Coverage Policies

Pricing Policies
Discounts Legal Issues
Sec19.ppt

Product Policies

Product Line Policies Promotional Allowances and Services

Exclusive Dealing

32

Selection and Termination Policies International Variations

Selection and Termination Policies

Sec21.ppt

Terminating Agents and Distributors

Termination as Strategy

Common Ground Rules Confusion Over Terms

33

Pricing Policy and Methods

Price Cutting Buyer Evaluation

Pricing in Channels
Sec21.ppt

Eight Stages In Establishing Prices

Segmented Pricing

Price and Value

Discounts and Allowances

Common Pricing and Methods

Competition-Based Methods Profit-Based Methods Competition Oriented Pricing

34

Vertical Integration: Owning the Channel Make or Buy: A Critical Determinant of Company Competencies

Degrees of Vertical Integration

Important forms of company-specific capabilities

Deciding When to Vertically Integrate Forward

Vertical Integration: Owning the Channel

Sec22.ppt

Outsourcing as the Starting Point

Vertical Integration Forward When Competition Is Low Six Reasons to Outsource Distribution

35

Channels for Services

Direct Delivery of Value

Delivery of Value via Intermediaries

Independent Service Channels Innovations in Methods of Distributing Services

Channels for Services
Sec6.ppt 36