INSEAD Library

Includes index

Digitized

Managing Channels of Distribution The Marketing Executive's Complete Guide Contents List of Exhibits Preface Acknowledgments Chapter 1 Pivotal Marketing Channel Concepts Why Manufacturers Use Indirect Channels Why Customers Buy From Indirect Channels Direct vs. Indirect Channels of Distribution Channel Definitions Indirect Channels That Take Ownership Direct Channels That Take Ownership Indirect Channels That Do Not Take Ownership The Channelmaster's Job The Primary Business Challenge Know What Your Customer Desires Find Out What Your Distributor Desires Select a Market Coverage Strategy Structure Your Sales Organization to Either General or Niche Markets Understand and Nurture Channel Relationships Make Sure Your Corporate Culture Supports the Decision to Expand Into Indirect Channels o Have the Direct Sales Force and the Indirect Channel of Distribution Report to One Functional Manager Observe the Total Channel Equation Why Channels Programs Fail Case: The Conflict Eternal: Direct vs. Indirect Channels of Distribution 24 25 xv xix xxi 1 2 4 7 9 13 Part I: Crafting Your Channel Chapter 2 Channel Design Sequence The Uses and Benefits of Effective Channel Design The Channel Design Sequence Step 1: Identify the New Market You Want to Penetrate or New Product You Need to Launch Step 2: Verify the Need for a New Channel of Distribution or Some Form of Channel Reorganization Step 3: Evaluate All Macro Market Conditions Step 4: Conduct a Competitive Channel Analysis Step 5: Research and Rank Customer/End User Satisfaction Requirements Step 6: Specify and Rank the Tasks You Want Your Channel Partner to Perform Step 7: Investigate All Possible Channel of Distribution Structures Step 8: Decide Upon Eagle Channel Partners Step 9: Obtain Internal Corporate Recommitment Step 10: Approach and Sign the Selected Distributors Step 11 : Monitor and Evaluate the Channel Structure Tying It All Together Case: New Product = New Markets = New Marketing Channels Chapter 3 Marketing Channel Macroinfluences and Internal Variables End User Buying Behavior The Economy Technology Target Channel Variables Competitors Political Factors International Factors Your Company Considerations Case: The Enemy Within Chapter 4 Competitive Analysis and Strategy Uncovering Direct and Indirect Competition The Three Steps of Direct Competition Analysis Developing the Profile Evaluating the Competition and Anticipating Competitive Moves Basing Your Competitive Strategy on the Market Life Cycle 27 29 29 31 38 38 41 43 43 44 45 45 46 46 47 49 51 52 54 60 Differentiating Your Product or Service Rating Your Competitor Intelligence Case: A New Renegade Channel Appears Chapter 5 Discovering Customer Satisfaction Requirements Conducting a Segmentation Analysis Uncovering Other Marketing Nuggets Chapter 6 Channel Selection Criteria What Are Channel Selection Criteria? Critical Channel Selection Criteria Business and Operational Criteria Sales and Marketing Criteria " Coup de Grace" Factors That Indicate a Motivated Candidate Composing Your "Wish List" Case: A Channel Change of the Highest Order Chapter 7 Eagles Don't Flock: Locating Channel Member Candidates Locating Channel Candidates Choosing a Market Coverage Strategy Is Bigger Always Best? Finding the Eagles Trade Publications Trade Organizations End User/Customer Testimonials Advertising by Manufacturers Advertising by Distributors Trade Shows/Seminars Your Direct Field Sales Force VIP Business Contacts Complementary Manufacturers' Catalogs and Literature Other Distributor Referrals Your Competitor's Channels of Distribution Special Industry Surveys Your Local Library's Business Reference Section Channel Search Firms Marketing Channel Consultants Case: WhereDo the EaglesNest? Chapter 8 Channel Candidate Enticements and Inducements: Business Policies That Bond Your Channel to You Finding Out and Confirming What the Distributor Needs Building Channel Trust Knowing What Your Competition's Channel Program Contains 62 63 64 67 68 69 71 72 72 85 86 89 90 90 93 94 98 99 101 Preparing Your Package of Enticements 1. Adequate or Superior Discounts/Margins 2. Quality Product 3. Full Product Line/Mix 4. Consistent and Responsive Sales and Marketing Support 5. Rapid or Timely Delivery 6. Drop Shipment Capability 7. Price Protection 8. Product Warranty 9. Dead on Arrival Priority Order Replacement 10. Comprehensive Cooperative (COOP) Advertising 11. Competitive End User/List Pricing 12. Free Product Literature 13. No-Penalty Stock Rotation 14 . Market-Knowledgeable Manufacturer Management 15. New Product Development Plans 16. U.S. Manufacture 17. Major Account Sales Support 18. Equitable and Swiftly Enforced Policy Decisions 19. Payment Terms 20. Product Customization/Private Label Capability 21. Your Corporate International Expertise 22. A Media Communications Program That venerates Qualified Sales Leads 23. Special Pricing Assistance 24. Regional Warehousing 25. An Effective and Frequent Channel Communications Program 26. Meaningful Product and Sales Training 27. Territorial Integrity 28. Demonstration Equipment at a Reduced Cost Preparing a Business Policy Statement Reconfirming Your Company's Commitment Making a Convincing Presentation to the Distributor Hidden Authority and the Inner Circle Signing the Channel Agreement Proceeding With the Channel Design Sequence Case: The Channel Seduction 102 112 113 114 117 120 120 Part II: Managing Your Channels Chapter 9 Channel Management and Communication Ramping Up a New Distributor Guidelines for a Great Channel Partnership Golden Rule 1: Be Honest and Accurate--Even If It's Painful Golden Rule 2: Communicate With Every Level of Personnel to Ensure the Most Complete and Accurate Transmission of Your Channel Information Flow Golden Rule 3: Consider the 123 125 126 128 Needs of Your Channel Before You Implement New Policies Golden Rule 4: Use the Channel Telegraph Judiciously Golden Rule 5: Communicate With Other Friendly Channel Marketing Managers in Your Industry or Marketplace Effective Channel Communications Mechanisms Field Visits by Manufacturer Personnel Joint Sales Calls Channel Advisory Councils A Media Communications Program Five Channel Management Mechanisms Sales Force Management A Minimarketing Plan The Critical Event Chart Reducing Conflict Between Direct and Indirect Channels Evaluating Your Channel The Channel Audit Audit, Then Evaluate Changing Channels Case: Be True to Thyself, Channel master Chapter 10 Channel Conflict and Power Channel Power Building and Applying Power Channel Conflict The 20 Percent/80 Percent Consideration How to Deal With Channel Conflict Oversaturation/Overdistribution Stocking Levels Direct vs. Indirect Channels Regional vs. National Distributors Large-Account Coverage Split Compensation Sales Quotas Territories: Geographic, Product-Specific, or MarketSpecific? Market Life Cycle Channel Transition New Market Development New Product Launches Channel Tasks to Be Performed Technology Required Training Channel Border Skirmishes The Phantom Channel Refusal to Be Locked Into One Supplier Overselling Without Regard to Availability Bureaucratic vs. Entrepreneurial Business Philosophies Pricing Issues Size of Profit Margins! Compensation Competition Over Resources Transshipping Assigned Markets Case: If You Dance With the ChannelBear,theBear Leads 163 151 150 144 145 147 148 139 141 141 130 136 Chapter 11 Channel of Distribution Motivational Concepts and Processes Push and Pull Strategies Incentive Programs Your Channel's Motivational Personality Four Key Elements of a Sales Motivational Program Checklist for a Successful Promotion Promotional Trade Organizations o Cobranding Sales and Product Training 1. What Are the Training Program Objectives? 2. Who Should Be Trained? 3. How Much Training Is Needed? 4. Who Should Conduct the Training? 5. When Should the Training Take Place? 6. Where Should the Training Take Place? 7. What Is the Content of the Training? 8. What Are the Teaching Methods Used in the Training? 9. How Do You Evaluate Your Training Program? Other Training Guidelines Case: The Two-Cadillac/One-Boat Distributor Syndrome Chapter 12 Legalities Principal U.S. Antitrust Laws The Legal Meter Key Legal Issues and Potential Transgressions Collusive Actions Dual Distribution Exclusive Dealing Full-Line Forcing Preferential Treatment/Secretive Behavior Price Discrimination Price Fixing Refusal to Deal Resale Restrictions Tying Agreements Vertical Integration How to Communicate Legally Terminating a Distributor International Antitrust Legislation Export Trading Company Act of 1982 Other Pertinent Laws Case: Watch Your Legalities Antitrust Laws: Summary for Managers Chapter 13 New and Different Channel Forms and Trends The Internet Information Technology and Channels of Distribution Synthetic Channels of Distribution Situationally Adaptive Channels Integrated Supply Distributors 165 165 168 177 187 189 189 191 193 202 206 207 209 211 227 227 233 234 236 International Channels Export Intermediaries Foreign Distributors Appendix A. Channel of Distribution Words of Wisdom Glossary Appendix B. International Laws Affecting Channel of Distribution Relations Index 237 245 249 257