Evaluating and Controlling Channel Members

The producer must regularly monitor the channel's performance against agreed targets such as sales quotas, average inventory levels, customer delivery time, treatment of damaged and lost goods, co-operation in company promotion and training programmes, and services to the customer. The company should recognize and reward intermediaries that arc performing well. Those which are under-performing should he helped, remedial actions should he taken or, as a last resort, the intermediary should he replaced. The firm must periodically 'requalify1 its intermediaries and prune the weak performers, allowing only the best ones to cam'its products.

Finally, manufacturers need to he sensitive to their dealers. Those which treat their dealers lightly risk not only losing their support, but also confronting legal problems. Disputes with dealers are counterproductive and create bottlenecks that can frustrate a company's growth. The experience of the brewery group Anhenser-Buseh is insightful.

If you ask for a Budweiser in a bar in America or Asia, you will get a light beer from Anheuser-Busch, the world's largest brewer. Ask the same question in a European bar and you are likely to be served a stronger, hoppier beer from the Czech Republic's Budejovieky Budvar brewery. If you want the American version, you will have to ask for a 'Bud', unless you are in the United Kingdom, where both variants share the Budweiser name. But Budvar has now started selling its own Dud in the Czech Republic, an extra strong lager, which it hopes also to sell to big-drinking Germans, However, it will have to win the right to use the name Bud in Germany, a privilege also denied to the American brewer Anheuser-Buseh. which sells its beer in the country as plain 'B'. Anheuser-Busch, began selling Budweiser beer in 1876, some I1) years before Budejovieky Budvar, the Czech brewer was established. Following an agreement in 1911, Budvar won exclusive rights to use the Budweiser name throughout most of Europe, while Anheuser-Busch gained the rights in North America, South America and most of Asia. Currently, Budvar has the exclusive rights to use the name Budweiser in 42 countries, in addition to the l.'K, while Anheuser-Busch sells under that name in 11 European countries, and the name Bud in a further 9. Budvar, however, had registered the name Bud in 1950 in a few countries, including the former Soviet Union, Czeehoslavakia, Hungary and Austria. Both brewers are keen to expand sales of their Budweiser/13ud brand in Europe, especially the big drinking markets like Germany. After the Velvet Revolution in 1989, Anheuser-Busch started a concerted campaign to gain a 34 per cent stake in findvar and resumed trademark negotiations, Anheuser-Buseh, however, had to divorce the purchase of the stake in Budvar from a resolution of the trademark dispute, which was hampering the brewer's plans to market Budweiser in other important European markets. Jack Pnrncll, chairman and chief executive of Anheuser-Buseh International, said he hoped that separation of the investment from the trademark dispute would advance progress in both issues. The delicate relations between Budvar and Anheuser-Busch have made the Czech government procrastinate with privatization, originally scheduled for the end of 1996. So, while the government would eventually decide on how Budvar should be privatised, Anheuser-Busch pursued further negotiations on reaching trademark agreements elsewhere. The American brewer terminated negotiations in September 1996 after securing favourable trademark rulings in Spain, Greece, Sweden, Finland, Norway, Lithuania and Latvia. Meanwhile, Anheuser-Ruseb is prepared to appeal against any unfavourable decisions (e.g. if Budvar succeeds in its claim to the Bud name in Germany) which hampers the development of its Budweiser business in Europe."5

The key to profitable channel management lies in creating win-win outcomes for all in the channel system - a symbiotic relationship that yields co-operation, not conflict, among channel participants will invariably result in higher channel performance.

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