Post on 04-Jan-2016
LogisticsPPS9b
Topic 6
Assessing channel member performance
Assessing channel member performance
Scope and frequency – factors:• Degree of control by M –
strong if have contract with others or have strong acceptance for its products
• Importance of the channel members for M (rely totally on or partly?)
• The more complex the product, the broader the scope of evaluation (unit value and volume)
• Intensive vs selective (number of channel members)
Member performance
Comprehesive performance evaluation =
Channel member
performance audit
Channel member performance audit
Develop performance measurement criteria
Evaluate channel member against those criteria
Take corrective action if needed
Performance measures in marketing channels
Evaluating total channel effectiveness
Determine customer needs for channel service: • Locational services• Lot size• Delivery time• Product variety
Determine which channel institutions are responsible for providing which channel services
Determine how well customer needs are being met
Take corrective action, if needed
Reinforce effective performance
Taking the five steps into consideration, evaluate the effectiveness of the marketing
channel systems for the following:
• FMCG’s• Cellphones
• Medical services
Channel system equity
Channel system productivity
Measure how efficiently an intermediary uses resources i.e.
- Land- Labour- Capital to generate output = sales
volume, gross margin & value-added variables
CHANNEL SYSTEM PROFITABILITY
Distribution
Productivity
Distribution channel environment:Consumer-demand
Technology
Consumerism and trade actions
Legal regulations
Economic conditions
Competitive conditions
Labour unions
Capital and international markets
Distribution channel structure:Number of channel levelsTypes of institutions participating at each level
Number of establishments of each institutional type
Functions performed at each channel level
Extent of routinisation of transactions
Incidence of postponement/ speculation in the channel
Distribution channel member policies:Product assortment to be carried
Market segments and territories to be served
Ordering time and minimum order requirements
Safety margin, never-out-list and other inventory policies
Prices, discounts and buy-lease policies
Advertising and sales promotion obligations
Credit and payment policies
Corrective action
1. Clarify tasks by marketing managers in channel
2. Use of power perhaps necessary to reinforce expectations/ requirements
3. Elimination i.e. YOU’RE FIRED!
Read through
Page 264 – 265 When modification of the existing
channel may become necessary.
case study
Page 266 – 268 and answer questions on page 268