Selecting and motivating intermediaries

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Channel partners are frequently criticized by manufacturers because they do not stress a given brand or because their salesman's knowledge of the product is not adequate or because they neglect certain customers. Shortcomings from the manufacturer's point of view may be understandable from the intermediary's viewpoint, since distributors:

■ are independent companies

■ serve their own customers

■ control market information

■ focus on product assortments.

Consequently, there is no point in manufacturers developing a mismatch of hastily improvised trade deals, uninspired dealer contests and unjustifiable discount structures. A more sophisticated approach is to forge a long-term partnership with distributors. This means that manufacturers should have a clear idea of what they expect from their distributors and what the distributors can expect from manufacturers in terms of:

■ market coverage

■ product availability

■ market development

■ technical advice

■ service and marketing information.

By cultivating a sense of partnership in the distribution channel it may be possible to convince intermediaries, retailers in particular, that they make profits through being part of a marketing system linking manufacturer, distributor and buyer and that it is not always necessary to seek profits primarily on the buying side through an adversarial relation with the supplier.

In the short term, there are a number of things the organization can do to improve the motivation of its distributors:

■ More frequent and timely deliveries.

■ Stricter sales quotas for each product line for various channels.

■ Creating better profit opportunities for distributors - easier terms, more advertising and promotion support, etc.

■ More powerful incentive systems for sales people.

■ Problem-solving sessions where manufacturers and distributors forge joint plans to eliminate weaknesses in the system.

■ Sanction poor performers.

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