CHAPTER 7

Question 1

Channel Member Selection

Answer 1

Last phase of channel design

• Selection may or may not be the result of channel design
• -To replace channel members that have left
• -Firm may need additional outlets to allow for growth

Question 2

The greater the intensity of distribution, the ____ the emphasis on selection.

Answer 2

less

Question 3

The Selection Process

Answer 3

1. Finding prospective channel members
2. Applying selection criteria to determine the suitability of prospective channel members
3. Securing the prospective channel members as actual channel members

Question 4

Finding members

Answer 4

1. Field Sales Organization
2. Trade Sources
3. Reseller Inquiries
4. Customers
5. Advertising
6. Trade Shows
7. Other Sources

Question 5

Salespeople are the best positioned to know about potential intermediaries

Answer 5

• They are often able to pick up info about likely intermediaries
• They may have lined up perspective intermediaries
  BUT The manufacturer must adequately reward salespeople for their time & effort establishing connections.

Question 6

Trade Sources

Answer 6

Trade associations
Trade publications
Directories
Trade shows
Firms selling similar products
The “grapevine”

Question 7

Reseller Inquiries

Answer 7

• Many firms learn about direct inquiries from intermediaries interested in handling their product.
• This is the main source of information about potential new channel members for some manufacturers.
• Firms receiving the highest number of inquiries are the more prestigious in their industry

Question 8

Customers

Answer 8

Customers are willing to give frank opinions
about the intermediaries who call on them.
->Manufacturer conducts formal or informal surveys of customers’ views of various distributors.

Question 9

Advertising

Answer 9

Trade magazine advertising can generate a large number of inquiries from prospective Members. It therefore can provide a large pool from which to make selections.

Question 10

Trade Shows

Answer 10

Wholesale and retail trade associations
hold annual conventions.
->Attending manufacturers have access to a
wide variety of potential channel members
**Small manufacturers meet face-to-face with wholesalers & retailers.

Question 11

Other Sources

Answer 11

1. Chambers of commerce, banks, & local real estate dealers
2. Classified telephone directories or the yellow pages
3. Direct-mail solicitations
4. Contacts from previous applications
5. Independent consultations
6. List brokers that sell lists of names of businesses
7. Business databases
8. The Internet

Question 12

Offering Inducements

Answer 12

• Good, profitable product line
• Advertising & promotional support
• Management assistance
• Fair dealing policies & Friendly relationships

Question 13

Product Line Inducements

Answer 13

1. Manufacturer offers good product line with
   strong sales & profit potential
2. Stress value of good product line from channel members’ perspective

Question 14

Advertising & promotion inducements

Answer 14

Consumer Market:
Gain immediate credibility by using a strong program of national advertising
Industrial Market:
Gain recognition by using a strong program of
trade paper advertising.

Question 15

Management assistance inducements:

Answer 15

Prospective members want to know whether the
Manufacturer will help with the following:
• training programs
• financial analysis & planning
• market analysis
• inventory control procedures
• promotional methods

Question 16

Manufacturers Responsibility

Answer 16

To convey to prospective channel members that
he or she is genuinely interested in establishing a good relationship based on trust and concern for their welfare as both business Entities and as people