In addition to performance appraisal of individual dealers, the firm must also carry out periodic reviews of the dealer network as a whole. Removal of weaknesses in the network is the objective of such a review. Some weaknesses that are noticed commonly in dealer networks are listed further. All such weaknesses must be overcome if the channel has to function as a vital instrument of marketing.
Dealer Training and Development:
Dealer training is another important part of dealer management. The primary purpose of dealer training is to improve the performance of the dealers through a sharpening of their sales skills and product knowledge. Upon the dealers rests the responsibility of sensing, serving and satisfying the needs of the customers. The dealers cannot fulfill this role unless they are equipped with the requisite knowledge, skills, technique and attitudes. Any progressive firm will, therefore, make dealer training an integral part of its channel management endeavor.
The content and methodology of dealer training should be framed so as to suit the background of the dealers and the contextual requirements. The prime purpose of the training is to impart to the dealers knowledge about customers, about products, about competition, and about merchandising and sales techniques. In addition, essentials of inventory management, credit management and sales promotion can also form part of the training content.
When competing companies match each other in the market place in every aspect, it is the training provided to the dealers that makes them different. And that’s why most companies are now concentrating their energies on dealer training. They now consider it a necessary investment.
Hyundai Motors India, for example, took all its 70 dealers to Korea before the launch of its Accent model. Daewoo and Hyundai both conduct regular in-house training programs for their dealers. Concorde, a Telco-Jardine Matheson JV, created for setting up the dealer network for Indica, conducts in-house training for Indica dealers. And, Maruti has tied up with National Institute of Sales for training its dealers.
Weaknesses Commonly Noticed in Dealer Networks are given below:
* The network is inadequate size-wise
* The network is inadequate, qualitatively
* The network is not properly spread out
* The interior markets are not covered properly
* A part of the network is inactive
* Quite a few links in the network are unviable
* The network is excessive for the task on hand
Resolving Channel Conflicts:
Sometimes, there may be unhealthy competition and conflicts among the different channels/channel tiers employed by a firm. There may also be conflicts among the channel members within a given channel type/channel tier. These conflicts must be handled with tact and fairness.
In managing marketing channels, firms will usually encounter some ‘bottom-up pressure’. The retailers would exert pressure on the wholesalers/stockists and the latter would pass it on to the firm. Sometimes, the wholesalers/stockists may have their own problems with the firm. Wise firms anticipate the pressures that can emerge from the different layers of the channels and formulate appropriate channel policies.
Tackling dealer conflicts-Wipro-Infotech:
Wise firms follow a sound policy with regard to dealer conflicts. Wipro-Infotech Group (WIG) can be cited as an example. In the first place, it makes a conscious effort to reduce the scope for conflicts among dealers through dealer/product class/marketing segment alignment. It has reduced the scope for conflicts among dealers by explicitly defining the territories of operation of each. Often, there is stiff competition among WIG dealers and they frequently under-cut each other. The under-cutting is compounded by the fact that different dealer categories have varying margins. For example, an A+ category dealer will be able to easily under-cut a B category dealer. This de-motivates the smaller dealers. So, the company strictly enforces the sales territories. The scope for cannibalization is also removed. And when conflicts do occur, WIG tries to resolve them in a fair and firm manner. When overlapping does occur, then it negotiates with both the dealers, evaluates as to which of them is capable of satisfying the needs of the particular customer more efficiently and entrusts the customer with him. And while doing this, it takes care to protect the sentiments of the losing dealer.