Channel Strategy and Design

Abstract

This chapter is about the relationships between the corporate strategy and the channel strategy. It then goes on to discuss the ways and means of choosing the channel structure appropriate to the company, selecting the channel members and then motivating them to achieve their objectives. The channel is the only sure shot way of differentiation with the competitors these days as all the rest of the variable factors are getting copied easily. The channels must be synchronized with the structures and objectives of the company. For that, proper positioning of the channels are required in the marketplace. The channels are also a function of the product and the market that they operate in. Once the channel design is complete and the channel structure finalized, selection of the channel members are made. There are various sources of locating good prospective channel partners and then recruiting and inducting them in the channel system of the company. This decision is reached after the company and the intermediary have both studied and understood each other and their respective requirements. Once inducted, the intermediary has to provide all support to the company in their efforts to market their products and brands. Similarly, the company is also expected to extend all kinds of support to the intermediaries as they face the challenges in the competitive market place. This may range from extending credit to organizing sales promotion activities along with the intermediaries.