Risk Management

Good management is all about anticipating events and planning for action before the events happen. This is where understanding the sorts of risks which are likely to arise is very important. The risks may be of one or more of the following types:

• The usual product risks, political risks, economic risks, etc. that exist in any international marketing operation – these are not being explored here
• A chosen channel member may turn out to be a misfit. This is where careful planning and selection of the right partners is vital. A good channel member of yesterday may not be a good channel member tomorrow. A mutual understanding of the roles of the channel members and their responsibilities to each other is a must.
• At least one channel member is not pulling their weight. The performance expectations must be made clear right from the start. Mutual monitoring of performance is vital to the continuing success of the ‘venture’. Mutual reliance must be recognized. All campaign planning must be undertaken jointly so that no motivation is lost due to inadequate planning.
• Breakdown of the ‘relationship’ – where independent members form a significant part of the channel, the relationships are based on individuals, their interpersonal behaviour, trust, mutual understanding of a set of common objectives and other objectives based on the needs of the parties concerned. ‘Mutuality’ of interest must be maintained to avoid the risk of damaging the position of the two parties.

In all these cases, rapid contingency planning is crucial to safeguard the company’s position.

Elements of Dealer Motivation

• The trade margin
• Special incentives
• Harmonious relations
• Effective communication

Dealer Motivation

• The firm should constantly motivate its dealers lists the
• Elements of dealer motivation