Is Channel Management an Oxymoron?

Thomas P. Gale writes in Modern Distribution Management that "for some people, channel management is an oxymoron, because they are using the same pricing and marketing formulas in place 10 or 20 years ago. But we found others who are finding some good dollars by thinking about the way they manage channels differently than the way it always has been.

Companies who are differentiating from competitors with unique marketing programs, channel incentives, and innovative use of technology tools are competing with the premium brand manufacturers they used to rely on to define themselves in the marketplace. They've adapted to the market realities, redefined how they create value for customers, and are seeing some results.

Distributors used to define their roles by how well, how fast, and too often how cheap they could get what their customers wanted. But most distributors still in business have learned how to say no, both to improve their own profitability as well as the profitability of their customers and suppliers. That's a big role shift – a major redefinition of the value of local market intelligence, customer relationships, application knowledge and sales, service and marketing skills.

Perhaps a good litmus test today is to ask yourself whether the partner you are going to market with, whether distributor or manufacturer, thinks channel management is indeed an oxymoron. If so, you may want to find a different, more flexible and creative way to new markets." (4/11/07, 'Is Channel Management an Oxymoron?', www.mdm.com)