Sales & Distribution Management

Chapter 20: Channel Management

+Recruiting Channel Members

+Criteria for Selecting Channel Partners

+Motivating Channel Members

 Evaluating Channel Members

+Modifying Channel Arrangements

+Managing Channel Relationships

Chapter Summary

Managing channels is one of the most important dimensions of businesses across the world for improving their value in the market. Customers are constantly on the look out for convenience and service, when purchasing goods. Effective channel management helps companies decrease costs and reach potential customers profitably. Effective channel management involves proper recruitment of channel members. Recruiting channel members should be a continuous process. In the recruitment process, screening involves elimination of applicants who do not match the criteria set for the position. After effective screening, the company has to make the final selection based on some criteria. These criteria can be divided into sales factors, product factors, experience factors, administrative factors and risk factors.

After selecting channel members, they have to be constantly evaluated and based on their performance, the company will either retain existing channel members or try to forge relationships with new channel members. Channel members can be evaluated by using parameters like sales quota attainment, average inventory levels, proper management of inventory, channel members’ cooperation in promotional and training programmes, etc. The distribution requirements of a company will keep changing according to changes in the product life cycle. Modifying channels accordingly is essential for the success of the organization. However, care should be taken in dealing with channel members for proper channel management. Conflict management among channel members is another important activity for the management of the organization.

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