Amity Business School

Channel Member Selection

• This is the last phase of channel design.
• Generally, the greater the intensity of distribution, the less the
emphasis on selection.
• In an intensive distribution pattern , the intermediaries are
“selected” only to the extent that they have the probability of
paying the bills.
• On the other hand, in case of selective distribution the
selection decisions become more critical & are carefully
scrutinised.
 The Selection Process Amity Business School

Consists of three steps :-

 Finding prospective channel members
 Applying the selection criteria to determine the
suitability of prospective channel members
 Securing the prospective channel members
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Finding prospective channel members

Variety of sources in order of importance are:-

4. Field sales force
5. Trade sources
6. Reseller enquiries
7. Customers
8. Advertising
9. Trade shows
10.Others
 Amity Business School

Applying the selection criteria

• Here the appraisal of the prospects happen in light of the
selection criteria.
• However , no list of criteria, no matter how carefully
developed, is adequate for a firm under all conditions. Some
flexibility can also be adopted certain times.
• Lot of attempts have been made to specify the same, of which
most prominent one’s are those of Brendel, Hlavacek & Mc
Cuistion, David Shipley & Pegram. The most classic &
famous are those of Brendel & Pegram
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Brendel’s list of 20 selection questions

1. Does the distributor really want our line or is he or she after it just
because of present day shortages ?
2. How well established is he or she?
3. What is his reputation with his customers?
4. What is his reputation among manufacturers?
5. Is he or she aggressive?
6. What other allied lines does the distributor handle?
7. What is the distributor’s financial position?
8. Has he the ability to discount his bills?
9. What is the size of his plant (facilities)?
10. Will he maintain adequate inventory for services?
11. To what important customers does the distributor sell?
12. To which one does he not sell?
 Contd. Amity Business School

13. Does he maintain stable prices?

14.Does he disclose the annual sales figure for the past five years?
15.What territory does the distributor actually cover with his sales force?
16. Are the distributor’s sales people trained?
17. How many field personnel does he have?
18. How many internal employees he has?
19. Does the distributor believe in active co operation, sales training & sales
promotion?
20. What facilities does he have for these activities?

Hlavacek & Mc Cuistion augmented this by emphasizing that the coverage

should be not only be in geographical terms but also in market segment
terms. Also according to them financial capacity should not be over
emphasized as at times less financed but more “ hungry ” ones also prove
better.
Pegram’s criteria Amity Business School
Quality
Quantity
Sales Competency
strength

Competitive
Compatible
Product
lines Complementary
Quality

Reputation

Management Market
succession coverage
Sales
performance
 Amity Business School

Securing the prospective channel members

The supplier produces , the distributor sells& each is dependent on the
other. Together they form a team and team work is essential for the
association to become mutually beneficial
Specific inducements for securing channel members
Prospective channel members are always keen to know “ what is in it for
them” if they join the manufacturer’s marketing channel.
Most of them would fall within the following 4 areas :-
6. Good profitable product line
7. Advertising & Promotional support
8. Management Assistance
9. Fair dealing policies & friendly relationships ( not just an economic
/business relationship but a human relationship as well
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