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Objective 1:
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The importance of channel member performance equals that of employee evaluations within the firm. Except
1. The channel manager works with individual firms rather than with individual employees. 2. The setting is interorganizational rather than intraorganizational.
Objective 2:
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1. Degree of the manufacturers control over channel members 2. Relative importance of channel members 3. Nature of the product 4. Number of channel members
Degree of Control
Control that a producer, manufacturer, or franchisor has over members is based on strong contractual agreements Manufacturer lacks strong market acceptance for its products & strong channel control based on contractual commitments
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Evaluation of channel members is more comprehensive for manufacturers who sell all of their output through intermediaries than for manufacturers who rely less on intermediaries. Why?
Because the firms success in the market is directly dependent on the channel members performance
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The more complex the product, the broader the scope of evaluation
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For products of very high unit value, the gain or loss of a single order is important to the manufacturer
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Objective 3:
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Overall performance reviews that give management a complete & objective analysis of each distributors operations
Appraisals that assist management in maintaining current operating control of distributors efforts
Objective 4:
Performance Audit
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Three Phases 1. Developing criteria for measuring channel member performance 2. Periodically evaluating the channel members performance against the criteria 3. Recommending corrective actions to reduce the number of inadequate performances
Objective 5:
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Sales Performance
Criteria channel manager should use to evaluate sales data:
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1. Comparisons of the channel members current sales to historical sales 2. Cross comparisons of a members sales with those of other members
Inventory Maintenance
Key Criteria for evaluating member inventory performance: 1. Total level of channel members inventory 2. Shelf or floor space devoted to inventory 3. Shelf or floor space provided relative to competitors inventory 4. Breakdown by particular products in units & dollars 5. Comparison of figures with channel members estimated purchases of related & competitive lines 6. Condition of inventory & inventory facilities 7. Amount of old stock on hand & efforts made to move it 8. Adequacy of channel members inventory control & record-keeping system
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Selling Capabilities
Manufacturer who obtains sales records for channel members salespeople should examine the following factors: 1. 3. Number of salespeople the channel member assigns to manufacturers product line 2. Technical knowledge and competence of channel members salespeople Salesperson interest in manufacturers products
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Negative ones often addressed after they have contributed to poor performance
Competition
Channel manager should consider two types of competition:
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2. Competition from other product lines carried by the manufacturers own channel members
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Objective 6:
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Three Approaches
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Commonly used when the number of channel members is very large & when criteria are limited to no more than sales performance, inventory maintenance, & possible selling capabilities
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5 Steps 1. Criteria & associated operational measures are decided on 2. Weights assigned to each of the criteria 3. Each member evaluated is rated on each of the criteria 4. Score on each criterion multiplied by weight for that criterion 5. Weighted criterion ratings summed to yield overall performance rating for each member
Objective 7:
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1. Develop concrete & practical approaches to actively seek information on member needs and problems 2. Programs of member support must be congruent with member needs & problems 3. Constraints imposed by interorganizational setting of marketing channel must be understood