Chapter 7Channel Policy & Participants Motivation

Teoretical basis of Motivation

Motivation

Refers to how to get people more involved in their work based on the human behavior rule.

Motivator and motivated people

Mcvey (1960) published his essay -- Are the channels

of distribution what the textbooks says ？ -- on Journal of

marketing ,which listed three reasons to explain it.

Identify the Needs & Problems of Channel parcitipants

Method to identify the needs & problems of channel

parcitipants

Channel participants study conducted by the manufacturer

Outsourcing the channel participants study to external agent channel auditing

Channel Auditing

Franchiser Consultant Committee

Significance of Channel Participants

Incentive

Sale Time Sale Space

Information Collection Information Transmission

Method to Motivate Channel Participants

Brand and Product Motivation

Material Motivation

Participation Motivation （ Spiritual Motivation ） Up-growth Motivation

Direct motivation Indirect motivation

Rebate Policy ： criteria/form/time

Price Discount ： amount/grade/ cash/season

Promotion ： goal/content/time/ expense/assessment

helping franchiser with customer and inventory management

helping the retailers with terminal management

delegating the managers

Methods of Channel Incentive Mutual

communication Assist & Support Assist & Support

Supply channel participants with the newest products or service

To show understanding of the difficulties the channel participants encounter

Provide support for management philosophy & management practice

Show the middle and long-term development plan of the enterprise to the channel members

Frequently exchanging operation opinion& providing operation advice

Provide culture-building experience of the enterprise

Regular private contact of higher-level or middle-level management

Concerted effort in channel work planning, source of goods coordination & promotion

Provide suggestion for products innovation or products selling knowledge

Regular information exchange Bear long-term liability(higher exclusive property devotion ）

Provide advertising or promotion support

Frequent negotiation mechanism

Holding channel participants meeting periodically Personnel training

Concern about channel members’ suggestion for channel staff in the enterprise

Financing support

Intensity &Effect of Incentive

Usually franchisers assess the manufacturers from the aspects listed

get best-seller or not

get low price or not

get huge profits or not

get goods distributed in advance or not

get ad support or not

prestige of the manufacturer

get training or not

can fully display its ability or not

Case Study A

Sanjiu Refined Chemical Co., Ltd. is a core enterprise ,which afiliated to Sanjiu Group, with three main product categories involed in household , individual and car care. Because of failing to make CRM norms,it treated the more than 1000 wholesellers equally ,regardless of its size and sales,which dampened the enthusiasm of the large customers.

The company began to treat the wholesellers diffirently

through the adjustment.It will help to train the backbone salesmen,build 15 image counters in its shopping center and provide at least 15 salesgirls for wholesellers grades as AAA with annual sales of more than 4 million. But for A,it just provide only one assistant.

Case Study B

In 2000 ,Kodak launched its China investement plan with 1.2 billion dollars. Faced with the small locative entrepreneurs,it promises to buy their equipment with 99, 000.Now there are more than 5600 branch stores in 250 cities

In 1998 ,Hualong launched its 100 millionaires plan.

Easy to be a boss with only 100,000

Case Study C

Incentives for the wholesalers

Channel Participants Incentives by a beer manufacturer

Providing a foreign trip for those who have completed annual sales indexGiving 4% of actual sales to those whose annual sales reaching 1,20 0,000 boxes by the end of settlement

Giving 3% of actual sales to those whose sales reaching 200,000 boxes with a timely settlement

Incentives for the retailersGiving 3% of actual sales to those who complete the annual

sales with a timely settlement

Incentives for hotel staffGiving 3% of cash to the staff who recommend its beer to

customers with the bottle lid as evidence and Giving the hotel 10 bottles of beer once its sales reaching 1,000 bottles

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