The most successful firms view their channel members in the same way they view their end users. This means determining their intermediaries' needs and then tailoring the channel positioning to provide superior value to these intermediaries. To improve intermediaries' performance, the company should provide training, market research, and other capability-building programs. And the company must constantly reinforce that its intermediaries are partners in the joint effort to satisfy customers.
More sophisticated companies go beyond merely gaining intermediaries' cooperation and instead try to forge a long-term partnership with distributors. The manufacturer communicates clearly what it wants from its distributors in the way of market coverage, inventory levels, marketing development, account solicitation, technical advice and services, and marketing information. The manufacturer then seeks distributor agreement with these policies and may introduce a compensation plan or other rewards for adhering to the policies. For example, Dayco Corporation, a maker of engineered plastics and rubber products, strengthens channel partnerships by running an annual week-long retreat with 20 distributors' executives and 20 Dayco executives.
Still, too many manufacturers think of their distributors and dealers as customers rather than as working partners. Up to now, we have treated manufacturers and distributors as separate organizations. But many manufacturers are distributors of related products made by other manufacturers, and some distributors also own or contract for the manufacture of in-house brands. JCPenney sells national brands ofjeans by manufacturers such as Levi Strauss in addition to a line ofjeans under the Original Arizona Jeans company private label. This situation, which is common in the jeans industry and in many others, complicates the process of selecting and motivating channel members.
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