Magazine article Marketing

Keeping It Formal and under Control

Magazine article Marketing

Keeping It Formal and under Control

Article excerpt

One reason why people get distribution wrong, as we discussed earlier, is that the distribution system rests on a plethora of different agreements made at different times. It's easy to guard against this by making clear and standardised agreements, and getting everything down in writing.

Once you have decided on the right distribution networks and determined the type and number of intermediaries you need, consider what you expect from channel members and what they can expect in return. Then put it in writing.

Too often suppliers maintain vague and informal agreements with intermediaries hoping that this provides flexibility. This is a mistake. A deliberately unclear policy is more likely to produce misunderstanding, distrust and conflict.

One can never expect any longterm business relationship to be immune from conflict but dealing with it when it does occur is easier and more effective when the expectations of both parties are clearly stated. This also encourages suppliers and intermediaries to think of each other as partners and so recognise the benefits of maintaining effective working relationships.

Some of the issue to consider when formulating a statement of policy include:

Suppliers' commitments

* Degree of exclusivity

* Sales and marketing support

* Ad and promotional support

* Technical assistance

* Training

* Incentive programmes

* Terms and conditions

* Direct selling policy

* Communication system

Intermediary's commitments

* Sales targets

* Product ranges and stocks

* Facilities and systems

* Staffing levels and competencies

* Customer service

* Enquiry handling

* Delivery

* Complains handling

* Sharing market information

* Business planning

Organisational impact

Clearly any use of intermediaries has an impact on the sales and marketing organisation and structure of the supplier. Strong management and firm support keeps intermediaries committed and well motivated. Remember, their needs are different from those of end-users and this must be recognised in the structure and skills of the sales and marketing functions.

A salesforce trained in end-user, product-based selling is ill equipped to deal with the commercial issues of stockturn and margins which are of primary importance to intermediaries. …

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