Channel Management Theory

1. THEORITICAL BACKGORUND OF THE STUDY

Channel management, as a process by which a company creates formalized programs for selling and servicing customers within a specific channel, can really impact your business—and in a positive way! To get started, first segment your channels by like characteristics (their needs, buying patterns, success factors, etc.) and then customize a channel management program that includes:

1. Goals. Define the specific goals you have for each channel segment. Consider your goals for the channel as a whole as well as individual accounts. And, remember to consider your goals for both acquisition and retention.

2. Policies. Construct well-defined polices for administering the accounts within this channel. Be sure to

Channel management is a technique for selecting the most efficient channels or routes to market for your products and services, and deriving the best results from those channels by applying appropriate financial, marketing or training resources. Channels to market include such distribution methods as direct sales from a website, sales force or call center and indirect sales through distributors or retailers. You analyze the effects of channel management by measuring factors such as changes in your share of the market or the volume of sales via certain channels, the changing costs of going to market through certain channels, and varying levels of customer satisfaction achieved by certain

As a managerial activity, early conceptions of logistics focused on its role in the distribution of products and as a way to support an organization’s business strategy and to provide time and place utility. Prior to the 1980s, logistics was primarily concerned with the outbound flow of finished goods and services, with an emphasis on physical distribution and warehouse management. During the 1980s, industry globalization and transportation deregulation led to the expansion of logistics beyond outbound flows to include recognition of materials management and physical distribution as important elements. In 1986, the CLM (considered by many to be the pre-eminent professional organization for academics and practitioners in the logistics field) defined logistics as: “the process of planning, implementing, and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information flow from point of origin to point of consumption for the purpose of conforming to customer requirements” (see www.clm1.org). During the 1990s, accelerated market changes due to shrinking product lifecycles, demand for customization, responsiveness to demand, and increased reliance on information technology led to logistics being defined as “the process of strategically managing the procurement, movement