Channel Evaluation

Channel evaluation is a multidimensional construct and includes both performance measures of the channel and measures of contribution to consumers by th channel. These measures of channel performance have been grouped under three main dimensions also known as 3Es, i.e., Effectiveness, Efficiency, and Equity. Effectiveness is further subdivided into delivery and stimulation.

• Delivery is defined as a short term measure of how well the channel meets the demand for service outputs placed on it by the consumption sector.
• Stimulation is defined as a long term, goal oriented measure of how well the channel member stimulate latent demand to reach optimum levels of demand.

Efficiency is further subdivided into productivity and profitability:

• Productivity is defined as the efficiency with which output is generated from resources and inputs used. In essence, productivity is a measure of physical efficiency.
• Profitability is a general measure of financial efficiency of channel member, in terms of return on investment, liquidity, leverage, growth patterns in sales and profits, growth potential in sales and profits, market share, average inventory maintained, etc.

Equity is the extent to which marketing channels serve problem-ridden markets and market segments, such a disadvantaged or geographically isolated consumers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures

Defining Issues & Priorities

Ensure that the key issues facing business have been realistically defined in light of the current and rapidly changing business environment. There is nothing new about this requirement, but the fact is that very few management teams actually take the time and apply the discipline necessary to objectively define and prioritize the key issues that can make or break their business. The issues of inferior quality, higher cost products, lower productivity, and nonresponsive service plague manufacturers for the better part of the recent past. Many companies in industries such as steel, automotive, machine tool, textile, farm and construction equipment suffer badly as a result. Only few companies address these issues in effective ways. Most are unable to clearly identify the key issues, set priorities, and develop the necessary business plans to overcome the underlying problems.

While the specific issues vary for different companies and industries, the management mindset should not vary. To deal effectively with an increasingly turbulent environment, priorities must be set so the business can survive unexpected blows, adapt to sudden dropping changes, and then capitalize on smaller windows of opportunity that develop and close much more quickly than they have in the past.

Many progressive managers kick off their planning process with a session aimed specifically at getting agreement on key issues and priorities. Accepting these priorities require a shift in the way most managers think and act, such as:

• Liquidity becomes a more important objective, often more important than reported earnings. It provides the flexibility to deal more effectively with unexpected events than is possible when everything is tied up in fixed and slow moving assets.
• Productivity gains per dollar of capital and per employee must be achieved annually. These reductions must exceed inflation and achieve demonstrably lower costs.
• Innovation must never stop. Demonstrable product and process improvements must be achieved year after year.
• All cycle and response times must be continuously reduced.
• A “frightened” sense of urgency must be the way of life in all parts of the business.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Closing the Customer Gap

The gaps model says that a service marketer must first close the customer gap between customer perceptions and expectations. To do so, the provider must close the four provider gaps, or discrepancies within the organization that inhibit delivery of quality service. The gaps model focuses on strategies and processes that firms can employ to drive service excellence.

Customer perceptions are subjective assessment of actual service experiences. Customer expectations are the standards or reference points for performance against which service experiences are compared and are often formulated in terms of what a customer believes will or should happen.

The sources of customer expectations consist of marketer-controlled factor (such as pricing, advertising, and sales promises) as well as factors that the marketer has limited ability to affect (innate personal needs, word-of-mouth communications, and competitive offerings). In a perfect world, expectations and perceptions would be identical: customers would perceive that they receive what they thought they would and should. In practice these concepts are often separated by some distance. Broadly, it is the goal of service marketing to bridge this distance.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Appointing a Dealer

1. The Branch Manager perceives a need for an additional dealer in an area. Need occurs if any existing dealer leaves or is removed. It could also happen when the company expands into new territory.
2. The Branch Manager has to convince the general manager of the division about the need for anew dealer.
3. The selection process for the dealer begins with placing advertisements in newspapers and trade magazines inviting applications. Applications for dealership are directed to the concerned branch manager.
4. The branch manager then reviews the application forms and prepares a shortlist if necessary. The company has not laid down any concrete guidelines for shortlisting at this stage. The branch manager is allowed to exercise his discretion.
5. The shortlisted applicants are interviewed by the branch manager along with the regional sales manager of the division. Whatever additional information is required is obtained from the applicants during the interview. The dealers are evaluated on:
   1. Prior business record
   2. The capability of maintaining and running his own showroom
   3. Financial strength
   4. Inventory: The dealer must have enough working capital for maintaining specified level of inventory. This condition is however is applied only in the case of dealers whose territories are located considerably away from a branch office. This is because there is a company owned warehouse along with every branch office and for dealers located in the same cities there is no necessity to maintain separate inventory
   5. Contacts with customers
   6. Availability of salesforce to service customer effectively. In addition, technicians also need to be present to meet the after-sales service requirements of the products
6. The final selection decision is made after talking with the bankers of the applicant. This is done to check the veracity of information regarding financial strength and prior business experience. It is only after the company is satisfied regarding all aspects of he information, that it sends the dealer an appointment letter
7. The appointment letter lays down several terms of the contract that have to be fulfilled by the dealer. The company expects the dealers not to sell any competitors’ products. The dealer is also expected to conduct his business only within the clearly demarcated sales territory allocated to him by the company.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Soft Customer Standards

Not all customer priorities can be counted, timed, or observed through audits. As Einstein once said, “Not everything that counts can be counted, and not everything that can be counted, counts.” Understanding and knowing the customer is not a customer priority that a standard that counts, times, or observes employees can adequately capture. In contrast to hard measures, soft measures are those that must be documented using perceptual measures. We call the second category of customer-defined standards soft standards and measures because they are opinion-based measures that cannot be observed and must be collected by talking to customers, employees, or others. Soft standards provide direction, guidance, and feedback to employees in ways to achieve customer satisfaction and can be quantified by measuring customer perceptions and beliefs. These are especially important for person-to-person interactions such as the selling process and the delivery process for professional services.

Home Office – Emerging Possibilities

Advances in technology and the downsizing of organizations offer opportunities for micro enterprises particularly for extending professional services, apparel design, crafts manufacturing and sales, catering, computer programming, copy editing, financial planning, graphic art & design, insurance agency, interior decoration, interior design, event management, realting, research, tailoring, travel agency, tutoring, and data entry/typing. You can also offer home/office cleaning services, or an errand service. The more you know about the business that you may undertake, the better.

 Subcontracting is another option. Procure orders and sublet to experts.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Be Inquisitive in Customer Service

Desire quality, efficiency, and precision

• Focus on the customer’s need for accuracy and efficiency by methodically outlining steps, processes, or details related to a product or service.
• Communication should be tied into facts, not feelings.
• Have details and information prepared in advance and be thoroughly familiar with them
• Approach encounters in a direct, businesslike, low-key manner.
• Avoid small talk and speaking about yourself.
• Ask specific open-ended questions about customers’ background or experiences related o the product or service.
• Present solutions in a sequential fashion stressing advantages, value, quality, reliability and price. Also, be prepared to point out and discuss disadvantages.
• Have documentation available to substantiate your claims.
• Don’t pressure customer decisions and follow through on promises.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures

Selection of Dealers

• The company does not advertise for new dealers. Whenever the need to appoint a new dealer for an area is felt the word is spread around. This is being used as the type of dealer who sell pumps and motors are mostly concentrated in a locality in every town or city
• The interested dealers are asked to present before the branch manager and the group marketing manager as to how they would be able to serve the company
• The selection is then done on the basis of following criteria:

1. Financial Strength: The capability of the dealer to be able to hold sufficient stock as per the potential of the area, both in the present and in the future, and whether he will be able to pay the companies dues in time.
2. Manpower: the strength of the workforce for handling sales, delivery, store handling, after sales service etc. the quality of the workforce in terms of educational qualifications, technical competency, and experience is also seen.
3. Contacts: As the business for these types of products is done on  the basis of contacts that form a major basis for selection and include the present customers of the dealers, experience in dealing with such customers, and overall contacts in the society
4. Floor space: Depending on the quantity of products to be stocked for the targeted sales, the floor space of the godown should be sufficient and located close to the market
5. Location: Location and ambiance of the outlet are not important.

• Feedback from the market is obtained through the market network and the present dealer network. The feedback is sought for things like authenticity of the claims and the reputation of the person to be appointed.
• Appointment is given to the elected dealers after they give a security deposit. Every dealer is required to make a deposit with the company, which works out to roughly around three months of expected sales.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Exceeding Customer Expectations

We often focus on meeting customer expectations by closing the gap between customer perceptions and expectations. There’s a difficulty in meeting expectations because of all the factors that must be coordinated to deliver on the firm’s service promises. However, an increasingly popular service maxim urges companies to “exceed customer expectations.”—to delight, excite, surprise, and otherwise amaze. According to this formulated belief, merely meeting customer expectations is not enough; a company must exceed them to retain customers. This is an appealing slogan as well as one that sets a high performance standard for employees, but it holds the potential to overpromise to both customers and employees. In attempting to exceed customer expectations, a company must understand a) what type of expectations can and should be exceeded, b) what customer group or segment is to be targeted, and c) the impact exceeding  expectations has on future expectations of customers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Operating Leverage

It is a financial thought quite similar to break-even analysis. Both fixed and variable costs are used in the production and marketing of products. The higher the operating leverage, the faster the speed of increase of total profits after the sales crosses the break-even volume. Likewise, those firms with high operational leverage will suffer losses at a faster rate after the sales volume drops under the break-even point.

Organizations with high operating leverage gain more from sales from organizations that have low operating leverage. Organizations with high operating leverage are more responsive to drop in sales volume, losses will occur at a faster speed.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.