BERMAN15.PPT 42KB Jun 05 2011 09:30:17 PM

MARKETING CHANNELS
Evaluation of Channels
Berman Chapter 15
Version 3.0
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Channel Assessment and Control
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1. Introduction
2. Overall Measures of Performance
3. Financial Performance Measures
4. Distribution Cost Analysis
5. The Channel Audit
6. Improving Channel Productivity
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1. Introduction to
Channel Assessment and Control
• three different levels
– product category for a given channel reseller
• relative profitability of a private label brand vs a
national brand
• contribution to overall profits of specific products

– profitability of a channel unit
– profitability of specific channels
• relativity of direct vs indirect channels
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2. Overall Measures of
Channel Performance
• A. Measures used by Dealers
– outcomes based measures
• volume, profit, margins, turnover, market share

– behavior based measures
• service, warranty/claims, buildings, facilities, office
systems, incentive plans

– five measures
• outcome sales, outcome profit, behavior sales,
customer service, market share
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2. Overall Measures of
Channel Performance
• B. Measures used by Suppliers
• 7 components
– sales contribution , profit contribution, reseller
competence, reseller compliance, reseller
adaptation, growth contribution, customer
satisfaction

• 2 measures
– financial - sales, profits, margins, turnover

– behavioral - service, warranty/claims,
competence, adaptation
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3. Financial Performance Measures
A. data envelopment analysis
• efficiency and profit
• expectations and performance
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high/low stars - high E, High P
effectives - high P, low E
underperforming - high E, low P
underperformers - low E, low P
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3. Financial Performance Measures
B. financial ratios
• solvency
• quick ratio, current ratio, liabilities to net worth

• efficiency ratios
• collection periods, inventory turnover, assets to
sales

• profitability ratios
• net profit margin, return on assets, return on net
worth
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4. Distribution Cost Analysis
• Configuration cost and profitability
– direct vs indirect, private vs national brands,
customer types - discounters,upscales, etc

• Full and Direct cost analysis

– natural expenses vs function expenses
– non traceable common costs

• Activity based costing
– vs non-activity - product, channel , customers
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5. The Channel Audit Process
vertical and horizontal audits
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channel structure
relationship marketing
customer service
physical distribution

marketing research
management
information systems

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product
pricing
promotion
technology
service channels
international channels

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6. Improving Channel Productivity
partnerships and customer response
• Channel Partnership Benefits
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reduced channel inventory
electronic data interface among partners
reassigned tasks - i.e.. preticketing
eliminate redundancies
supplier managed replenishments
cross docking and direct store delivery
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6. Improving Channel Productivity
partnerships and customer response

• Efficient Customer Response
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electronic data interchange
point-of-sale registers
bar codes
cross docking
scanning equipment
store replenishment software
invoicing and packaging standards
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