Discuss the channel evaluation criteria.

1. Economic criteria Decision has to be made whether to use the organization’s sales force or use sales agencies. Most marketing managers believe sales representatives can sell more as they concentrate on the firm’s products, are better trained to sell its products, more aggressive because their future depends on the company and customers prefer dealing with directly with the company.
- On the other hand the sales agency could conceivably sell more than the sales force because: the sales agent has his own sales force which and some customers prefer to deal with agents who represents several manufacturers rather than sales representatives from one company. Agency has also extensive contacts whereas the sales force would build them up from scratch as they have better local market knowledge. Estimation of the cost schedules for either the sales force or sales agencies –sales agents are paid a higher commission than sales force.
2. Control criteria: use of sales agency poses more control problems as it is an independent business organization interested in maximizing profits. The channel should have high level quality management competition . The agent’s sales force may lack the technical know-how concerning the company product or handle its promotion materials effectively.
3. Adaptive criteria : Each channel involves some duration of commitment and loss of flexibility due to environmental changes such as other means of selling e.g. direct mail , may become more effective , but the manufacturer is not able to drop the channel . A channel involving long commitment should be greatly superior in terms of economic and control criteria.
4. Market coverage : the extent by which the market channel covers the market.
5. Partnership willingness : some well established organizations forge long-term partnership with their middlemen (i.e. distributors). The producer seeks a clear sense of what it wants from its distributors and what its distributors can expect in terms of market coverage, product availability, market development, account solicitation, technical advice and services and market information. The producer seeks an agreement form its distributors on these politics and may base compensation on their own adhering to them
6. Loyal /cooperation i.e. cooperativeness: a climate of co-operations is perhaps the most desirable within a channel system. This cooperation must be worked on and cultivated with positive co-operation signs and signals. Cooperation can be defined as “ similar or complementary coordinated action taken by a firm in interdependent relationships to achieve mutual outcomes or singular outcomes with expected reciprocation over time” This means you scratch my back and I’ll scratch yours, and both of us shall be better off.
7. Other considerations:
- Length of experience in business
- Growth and profit records i.e. performance records
- Financial ability i.e. solvency
- Reputation in the market
- Number of products handled

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Lellah answered the question on November 8, 2021 at 05:19