Selecting the Channel Members
Channel Member Selection
The last phase of channel design
Selection may or may not be the result of channel design.
Firm may need additional
outlets to allow for growth
To replace channel
members that have left
Selection & Distribution Intensity
The greater the intensity of distribution
The less the emphasis on selection
The Selection Process
3. Securing the
1. Finding prospective to determine the prospective
channel members channel members
1. Field sales
7. Other sources 2. Trade sources
6. Trade shows 3. Reseller inquiries
5. Advertising 4. Customers
Field Sales Organization
Salespeople are the
best positioned to BUT:
know about potential
• They are often able to • The manufacturer must
pick up information adequately reward
about likely salespeople for their
intermediaries. time & effort
• They may have lined up establishing connections.
• Industrial Distribution
• Trade associations magazine
• Trade publications • The Verified Directory
• Directories of Manufacturers’
• Trade shows Representatives
• Firms selling similar • The National Association
products of Wholesaler-
• The “grapevine” Distributors
• The National Retail
• The Encyclopedia of
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.
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.
Manufacturer obtains information about
Trade magazine advertising
can generate a large number
of inquiries from prospective
It therefore can provide a large
pool from which to make selections.
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.
1. Chambers of commerce, banks, & local real
2. Classified telephone directories or the yellow
3. Direct-mail solicitations
4. Contacts from previous applications
5. Independent consultations
6. List brokers that sell lists of names of
7. Business databases
8. The Internet
• Credit & Financial • Sales Performance
Condition • Management Succession
• Sales Strength • Management Ability
• Product Lines • Attitude
• Reputation • Size
• Market Coverage
Adapting Selection Criteria
Because no list of criteria is adequate
for a firm under all conditions,
the channel manager should be flexible when
using selection criteria.
Who Selects New Members?
Producers & Manufacturers
Securing Channel Members
• Manufacturers ask:
– Why should this
company carry my
• Intermediaries ask:
– Why should they
want to distribute
products through us?
Good, profitable product line
Advertising & promotional support
Fair dealing policies &
Product line inducements:
1. Manufacturer offers good product line with
strong sales & profit potential
2. Stress value of good product line from
channel members’ perspective
Advertising & Promotion
Advertising & promotion inducements
Gain immediate credibility by using a strong program
of national advertising.
Gain recognition by using a strong program of
trade paper advertising.
Management assistance inducements:
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
Fair Dealing &
Channel Leader’s Responsibility:
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