EXPLAIN THE NATURE AND SCOPE OF

CANNEL MANAGEMENT

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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?

CHANNEL MARKET TASKS

• Group 1 – Manufacturer

• Marketing

• Packaging

• Financing

• Group 2 - Wholesaler

• Storage

• Delivery

• Group 3 – Retailer

• Merchandising

• Personal Selling

The tasks are handled by different groups

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 Needs2. Set Channel Objectives3. 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.