Directorate of distance education

Securing Channel Members 
Unless the manufacturer has a product and a reputation that sells 
itself, then they may need to use some type of inducement or incentive 
to attract desired channel members. The main aim is to communicate to 
the prospective channel member that the manufacturer will provide them 
with good support and that the partnership will be mutually beneficial. 
Specific inducements that will attract channel members include: 
➢ A quality, profitable product line
➢
Promotional support - advertising, cooperative advertising, 
promotional allowances, promotional materials
➢ Management support and assistance - training, financial analysis, 
market analysis, business planning etc.
➢ Fair dealing policies and good relationship - cooperation, fairness, 
trust and goodwill.
Developing a marketing channel comprised of quality intermediaries 
and characterized by good relationships is critical to distribution success.

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Notes
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Evaluating Channel Performance
The producer must continuously evaluate each channel member’s 
performance against standards such as sales quotas, average inventory 
levels, customer delivery time, and treatment of damaged and lost goods. 
Cooperation in company promotion and training programs, and service 
to the customer, Intermediaries having excellent performance should 
be recognized and rewarded by the company. Intermediaries having 
unsatisfactory performance should be helped, if not possible, replaced. 
While channel efficiency emphasizes controlling costs incurred by 
intermediaries while performing channel functions, channel productivity 
is concerned with maximizing outputs for a given level of inputs. Channel 
effectiveness deals with the intermediary’s proficiency in satisfying cus-
tomer needs and channel equity measures the distribution of accessibility 
of the channel among customers.
While performance at a macro- level is evaluated through societal 
contributions of intermediaries, a micro- level evaluation involves assessing 
the performance of individual intermediaries in terms of achieving the 
manufacturer’s objectives of goal attainment, integration, adaptation and 
pattern maintenance. The performance of intermediaries is measured on 
three scales, namely facet, global and composite scales.
In addition to an intermediary’s performance in meeting supplier 
aims, his or her channel profitability that is concerned with his or her 
financial performance is also evaluated. Thus, the success of a channel and 
its efficiency are determined by the efficiency of channel intermediaries 
in delivering goods and services to customers and the quality of services 
offered in the process. An effective distribution channel can provide 
channel services demanded by customers and extend its capacity within 
the constraints of the market environment. 
A company may, from time to time, set new qualification for its 
intermediaries and trim the weaker ones. For example, when IBM first 
introduced its PS/2 personal computers, it re-evaluated its dealers and 
allowed only the best ones to carry the new models. 

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Notes
108
Each IBM dealer had to submit a business plan, send a sales and 
service employee to IBM training classes and meet new sales quotas. Only 
about two-thirds of IBM’s 2.200 dealers qualified to carry the PS/2 models, 
Finally, manufacturers need to be attentive to their channel 
members. Treating channel members lightly may result in loss of their 
cooperation or may even invite legal problems.
Beat plan: This plan is generated for the various product categories 
i.e. diary dry,diary wet, Dhara and ice cream. A weekly schedule is prepared 
for various marketsand the retailers the turnover for each of the product is 
calculated for the wholesaledealers.
Cumulative performance: The performance of the dealers is 
averaged out over aperiod of three years where a comparison is made of 
the present performance vis-à-vis the previous ones.
Target versus achievement: The performance and the targets are 
compared andtherefore the gaps are identified which help in evaluating 
the WD and planning for the next year as well. This is done for each of the 
product category.