What Is Channel Management?

Channel management refers to all activities in which the manufacturer manages existing channels in order to achieve the company's distribution goals, to ensure coordination and ability cooperation between channel members, the company and channel members, and its significance lies in jointly seeking to maximize long-term benefits. . Channel management is divided into: selecting channel members, motivating channels, evaluating channels, modifying channel decisions, and exiting channels. Manufacturers can implement two different degrees of control over their distribution channels, namely absolute control and low-level control.

Channel management

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Channel management refers to all activities in which the manufacturer manages existing channels in order to achieve the company's distribution goals, to ensure coordination and ability cooperation between channel members, the company and channel members, and its significance lies in jointly seeking to maximize long-term benefits. . Channel management is divided into: selecting channel members, motivating channels, evaluating channels, modifying channel decisions, and exiting channels. Manufacturers can implement two different degrees of control over their distribution channels, namely absolute control and low-level control.

Chinese name

Channel management

Foreign name

Channel management

Classification

Select channel members, incentive channels, etc.

Definition

Manage existing channels to achieve goals

As a manufacturer, how do you start a channel, how do you start analyzing and planning, and how to build a management system. How to lead the overall situation: As a channel provider, how can you strengthen your product management, cash flow and information flow management, and how to get more profits in such a period of thinning profits.

1 Corporate strategy changes

2

Channel management work includes:

(I) Inconsistent channels cause conflicts between manufacturers

Enterprises should resolve the conflicts between enterprises and middlemen caused by the narrow market, unify their channel policies, and standardize service standards. For example, in order to quickly open the market, some manufacturers choose two or more in the early stages of product development. General agent, because the two general agents often engage in vicious price competition, so often the situation is very unsatisfactory, although the brand awareness is very high. Of course, the factory-business relationship needs to be managed. For example, inspections should be strengthened to prevent channeling, training should be strengthened to prevent restocking, and reward and punishment measures should be established. Through the effective combination of humanized management and institutionalized management, the relationship between manufacturers that is most suitable for enterprise development should be cultivated.

(2) Management becomes more difficult due to lengthy channels

It should shorten the time for goods to reach consumers, reduce the loss of products, manufacturers effectively control the supply-demand relationship in the terminal market, and reduce the possibility of corporate profits being diverted. In this regard, Haier's overseas marketing channels can be used for reference: Haier directly uses the existing sales and service networks of foreign distributors, shortening the channel chain, reducing channel links, and greatly reducing the cost of channel construction. Now Haier has established a huge distribution network in dozens of countries, with nearly 10,000 marketing points. Haier's various products can flow smoothly in any country at any time.

(3) Extensive channel coverage

Manufacturers must have sufficient resources and capabilities to pay attention to the operation of each region, try to improve the level of channel management, and actively respond to competitors' key attacks on weak links. For example, Haier cooperates with distributors and agents in two ways: store-in-shop and specialty store. These are two distinctive forms of Haier's marketing channels. Haier divides domestic cities into five levels according to scale, namely first-level cities are provincial capitals, second-level cities are general cities, third-level cities are county-level cities and regions, and fourth-level and fifth-level cities and towns are rural. In the first and second markets, shop-in-shop and Haier product counters are the main products. In principle, there are no specialty stores. Specialized stores are established in the third-level market and some secondary markets. The fourth- and fifth-level networks are the second and third-tier sales channels. The extension mainly faces the rural market. At the same time, Haier encourages various retailers to actively explore outlets.

(IV) Lack of criteria for the selection of middlemen by enterprises

When choosing a middleman, you cannot overemphasize the strength of the dealer, and ignore many prone problems. For example, a strong dealer will also run a competitive brand, and use this as a bargaining chip. Will spend a lot of energy to sell a small brand, manufacturers may lose control of product sales, etc .; the relationship between manufacturers should be matched with corporate development strategy, different manufacturers should correspond to different dealers. For companies with low visibility and strong strength, dealer selection and cultivation should be carried out in the early stages of market development, which not only establishes interest, but also emotional and cultural identity; for large companies with well-known brands, there is a set of Practice, so that dealers can stand out in the market competition. Can make dealers loyal. In addition, the low risk and high profit of their product operations have prompted the two to form a partnership. In short, there should be certain criteria for selecting channel members: such as business scale, management level, business philosophy, acceptance of new things, cooperative spirit, service level to customers, the number of downstream customers, and development potential.

(V) The enterprise cannot control and manage the terminal well

Some companies have managed a part of the terminal market themselves, grabbed the business of secondary wholesalers and distributors, reducing their sales, and gradually lose business confidence in their products. At the same time, they will increase the sales and sales of competitive products, resulting in traditional channels. Clogged. If the market operates improperly, the entire channel will be paralyzed by lack of motivation. Today, "channel is king", companies are increasingly feeling the pressure in the channel. How to use the resource advantages in the channel and how to manage the dealers have become the "shangfangbaojian" of the terminal.

(6) Ignore follow-up management of channels

Many companies mistakenly believe that once the channel is built, it can be done once and for all. They don't pay attention to the emotional communication and exchange with channel members, which causes many problems. Because of the overall situation, there are many factors that affect the development of the channel, such as products, competitive structure, industry development, dealer capabilities, consumer behavior, etc. After the channel is completed, it must continue to be adjusted according to the development of the market, otherwise it will There was a big problem.

(7) Blind self-built network

Many enterprises, especially some small and medium-sized enterprises, must build their own sales networks regardless of the actual situation, but the channel is not efficient due to the low degree of specialization; the response is too slow due to the large network; higher management costs; personnel expenses, administrative expenses, advertising Expenses, promotion costs, storage and distribution costs are huge, causing great economic losses to the enterprise. Especially in first-tier cities, manufacturers should build their own channels more carefully. Certain conditions must be possessed by manufacturers' self-built channels: high brand appeal, influence and considerable corporate strength; stable consumer groups, market sales and corporate profits. Xiang Gree has become the industry's leading brand and has considerable brand recognition. And stable consumer groups; After a considerable period of market accumulation, the company already has a relatively mature management model, etc. In addition, the key to self-built channels must pay attention to economies of scale and must reach a certain scale before manufacturers can achieve the entire distribution and Minimize operating costs.

(8) Channel selection of new products is confusing

The successful entry of any new product into the market must maximize the power of the channel, especially in close cooperation with distributors. How to choose an ideal dealer? The author believes that the dealer should have the same business goals and marketing concepts as the manufacturer. In terms of strength, the dealer must have strong distribution capabilities, good reputation, strong sense of service, Terminal management capabilities; especially in the same business category, distributors must distribute exclusive brands without similar products and price conflicts; meanwhile, distributors must have strong financial strength and a fixed distribution network. In short, in the modern marketing environment, after years of market experience, dealers have begun to transform and mature, and their awareness of the right to speak has been gradually strengthened. Therefore, enterprises should re-evaluate and select distributors in the process of promoting new products to the market. First, for existing distributors, strengthen network expansion capabilities and market operation capabilities. After the new products are delivered to their agents, manufacturers fully support them. And training; the second is to resolutely replace the dealers who have no transformation value; the third is to the stronger secondary distributors, they can entrust them to act as agents for new products.