A. Discuss the importance of choosing appropriate channel members.
Distribution channel entail the means through which good or services are passed from the manufacturer to the consumer. The success of any manufacture depends on the difference between expenses and revenues. Hence choosing the right channel member is key for success (Lamb, Hair & McDaniel, 2011). The importance of choosing appropriate member includes:
Choosing the right channel member leads to increased efficiency in the distribution channel. For example, it would be cumbersome for a manufacture to deal direct with consumers amid competition. Having the right channel member will help in reaching the customer more easily and effectively.
Choosing appropriate channel member minimizes the cost of distribution since they carry out routine transactions. The frequency of delivery and payment transactions are harmonized hence no need for bargains at each level of transaction (Pride & Ferrell, 2006). Transactional costs are thus reduced as the transactions become often.
Choosing the right channel member also helps in eliminating the gap created between extrication of products by producers and the ones required by consumers. Normally, manufacturers produce in mass of few like products while the demand in the market is of small amounts of assorted products (Lamb, et al., 2011). Thus, having an appropriate channel member facilitates the flow of goods and services in an effective manner.
Finally, appropriate channel members help in relieving the search process by buyers and manufacturers. Manufacturers are constantly seeking to establish the needs of the consumers while consumers are always looking for specific products.
B. Identify and list at least 5 criteria that the manufacturer should use when evaluating potential intermediaries for the firm`s distribution channels.
i. Competitive strength and intermediaries` ability
ii. Cooperativeness and repute of the intermediaries
iii. Consumer expectation
iv. Size and quality of the intermediaries
v. Intermediaries` growth and profits record
C. Discuss each criterion that the car audio manufacturer should use when evaluating potential intermediaries for the firm`s distribution channels.
Competitive strength and intermediaries` ability: The car audio maker should establish the competitiveness of the potential agents before settling on them. This is crucial as it would exhibit the intermediaries` ability to take on competitors in audio manufacturing (Irani, Shahanaghi & Jandaghi, 2011). A competitive intermediary will be the one that can make enough sales within a short time for the manufacturer to make others.
Cooperativeness and repute of the intermediaries: the audio manufacturer should know how the intermediary is perceived by customers. The support of customers is paramount for the success of any agent. Establishing a relationship with an agent with a bad reputation is harmful to the image of the manufacturer hence can destroy the manufacturer`s market share (Irani, et al., 2011).
Consumer expectation: Consumers expect the intermediaries to be easily reachable and readily available (Pride & Ferrell, 2006). The car audio manufacturer will need to establish the physical locality of the intermediary. Intermediaries that are inaccessible or far from main cities may not be ideal for distribution of the product.
Size and quality of the intermediaries: the car audio maker should be aware of the size of the intermediary. This is important because the manufacturer can know if the agent is in a position to handle the capacity of his/her products (Pride & Ferrell, 2006). An intermediary with a small store and inexperienced workforce may not be able to distribute the product to the manufacturer.
Intermediaries` growth and profits record: An effective and efficient agent should portray evidence of growth and profits which should be on an upward trajectory (Irani, et al., 2011).
Irani, H.R., Shahanaghi, K., & Jandaghi, G. (2011). Develop a framework for selection of intermediary in marketing channel, Iranian Journal of Management Studies, 4, (1), 25-42.
Lamb, C., Hair, J. & McDaniel, C. (2011). MKTG4: Student edition. Mason, OH: South-Western Cengage Learning.
Pride, W. & Ferrell, O. (2006). Marketing: concepts and strategies. Boston: Houghton Mifflin Co.