Chapter 7Chapter 7

Selecting the Channel Members

Channel Member SelectionChannel Member Selection

Selection may or may not be the result of channel design.

The last phase of channel design

Firm may need additional outlets to allow for growth

To replace channel members that have left

Selection & Distribution Selection & Distribution IntensityIntensity

The greater the intensity of distribution

The less the emphasis on selection

The Selection ProcessThe Selection Process

1. Finding prospective channel members

1. Finding prospective channel members

3. Securing theprospective

channel membersas actual

channel members

3. Securing theprospective

channel membersas actual

channel members

2. Applying selection criteriato determine the

suitability of prospective

channel members

2. Applying selection criteriato determine the

suitability of prospective

channel members

Finding MembersFinding Members

1. Field salesorganization

1. Field salesorganization

7. Other sources7. Other sources

5. Advertising5. Advertising

6. Trade shows6. Trade shows

2. Trade sources2. Trade sources

3. Reseller inquiries3. Reseller inquiries

4. Customers4. Customers

Other SourcesOther Sources

1. Chambers of commerce, banks, & local real estate dealers

2. Classified telephone directories or the yellow pages

3. Direct-mail solicitations4. Contacts from previous applications5. Independent consultations6. List brokers that sell lists of names of

businesses7. Business databases8. The Internet

1. Chambers of commerce, banks, & local real estate dealers

2. Classified telephone directories or the yellow pages

3. Direct-mail solicitations4. Contacts from previous applications5. Independent consultations6. List brokers that sell lists of names of

businesses7. Business databases8. The Internet

Selection CriteriaSelection Criteria

• Credit & Financial Condition

• Sales Strength• Product Lines• Reputation• Market Coverage

• Credit & Financial Condition

• Sales Strength• Product Lines• Reputation• Market Coverage

• Sales Performance• Management

Succession• Management Ability• Attitude• Size

• Sales Performance• Management

Succession• Management Ability• Attitude• Size

Who Selects New Members?Who Selects New Members?

Producers & Manufacturers

Wholesale Intermediaries

Retail Intermediaries

Securing Channel Members

• Manufacturers ask:– Why should this

company carry my products?

• Intermediaries ask:– Why should they

want to distribute products through us?

Offering InducementsOffering Inducements

Good, profitable product line

Advertising & promotional support

Management assistance

Fair dealing policies & Friendly relationships

Product LineProduct Line

Product line inducements:

1. Manufacturer offers good product line withstrong sales & profit potential

2. Stress value of good product line fromchannel members’ perspective

Advertising & PromotionAdvertising & Promotion

Consumer Market:Gain immediate credibility by using a strong program

of national advertising.

Advertising & promotion inducements

Business Market:Gain recognition by using a strong program of

trade paper advertising.

Management AssistanceManagement Assistance

Prospective members want to know whether the Manufacturer will help with the following:

• training programs• financial analysis & planning

• market analysis• inventory control procedures

• promotional methods

Management assistance inducements:

Fair Dealing & Fair Dealing & Friendly RelationshipFriendly Relationship

Channel Leader’s Responsibility:

To convey to prospective channel members thathe or she is genuinely interested in

establishing a good relationship based on trustand concern for their welfare as both business

Entities and as people