IIBF JAIIB | RBWM | CHANNEL MANAGEMENT & ITS LEVELS | MODULE C – SUPPORT SERVICES – MARKETING OF BANKING SERVICES AND PRODUCTS
These RBWM notes are very important for the students who are finding the text of the IIBF prescribed books for JAIIB MAY 2023 Exams very difficult to understand. We hereby, provide you short notes on the topic – Support services i.e Channel Management from the Latest JAIIB RBWM Syllabus 2023 which has been prescribed for JAIIB MAY Exams 2023.
So, prepare from the notes & we will assure you that you will understand the subject matter more easily.
IIBF JAIIB RBWM FREE SUPPORT SERVICES – MARKETING OF BANKING SERVICES | MODULE C
DEFINITION: CHANNEL MANAGEMENT
A process used to direct and manage techniques of marketing and the parties who are involved in the channel of distribution by the company is defined as channel management.
The main use of channel management is to reach a broader range of customers via various sales channels and marketing techniques.
CHANNEL MANAGEMENT: MEANING
A manufacturer’s job is not limited to the production of goods, it just starts with the production. Once the goods are ready for delivery, the next thing he needs to do is look and decide what would be the efficient channel through which the products can be sold in the market.
It includes deciding the channel partners too, as they are important, for they put in place a channel of communication between the company and its customers.
Channel management mainly includes deciding what would be the best and most efficient channel partners as well as different routes through which your products could be made available in the market with the main focus to get maximum results from the channels.
Different channels could be selected for the different customer bases. Channel management would be very effective if you know the buying pattern and the requirements of the customers.
Let’s understand this with an example, take a product which is available for adults, one would consider selling this online and offline channels whereas to sell grocery products one would like to go foodie well-established stores in comparison to online channels.
PROCESS OF CHANNEL MANAGEMENT
As per the Module C of RBWM JAIIB Syllabus, the process of channel management is explained below:
Business success depends to a great extent only on intermediaries who actually present products in the market. It makes it important to have a healthy relationship with these intermediaries. Therefore, to provide motivation to the intermediaries so that they will promote the products of manufacturers, a channel manager has to decide both financial and non-financial benefits that could be offered to the intermediaries.
STEPS OF CHANNEL MANAGEMENT
It includes 6 steps which are discussed below:
IDENTIFICATION OF SOURCES
The first step of Channel management involves identifying the references. As a new business in the market, he would be required to do research to identify what are the distribution channels available in the market and then decide which would be the best for one’s business.
While, a well-established business, usually, gets contacted by the distributors themselves. In those cases, it would be beneficial to do a proper background check before entering into a contract with them.
PREPARING A SELECTION CRITERION
There could be a distributor who is well-established but he might be selling competitors’ products or less enthusiastic about his methods while a smaller distributor although less popular and might have lower Salesforce but could be better at his work.
This way, one has to decide so many things while selecting a channel.
SELECTION OF INTERMEDIARIES
Choosing the right channel or intermediaries is important for the success of the business. There are many intermediaries on different scales. New and small scale intermediaries might be inexperienced, it could be the case that they might be willing to sell your products with enthusiasm and might also have better skills and resources of selling. Also remember, this small-scale intermediary might be ready to sell your products at lower margins with fewer incentives.
Whereas one would have to convince large scaled and established intermediaries by giving them incentives.
This way, one has to decide what would be beneficial for their own business.
PROVIDING REQUIRED TRAINING TO INTERMEDIARIES TO SELL
Once you have decided which channel management partner you would be going for, you need to impart needed training to them so that these intermediaries cancel the products efficiently and effectively.
With training, you can provide important information in relation to your products and your business.
To make sure that the channel partners can use the information about your products effectively, you should impart information in the areas of financial management, sales, marketing, personnel management, stock control, etc. That training would most probably be appreciated by the small-scale intermediaries.
MOTIVATING INTERMEDIARIES WHENEVER REQUIRED
The next important step in the process of channel management is to drive your channel partners. This drive could be of financial nature on non-financial nature.
Motivation in the form of financial nature could be an increased margin on the sales of products while non-financial motivation could be in the form of granting the territorial rights for some areas.
Motivation could also be in the form of verbal appreciation and recognition for the efforts they have made as well as providing them with the latest products, solving their problems, and maintaining regular contact with the intermediaries.
Instilling the motivation is an important step that should not be avoided even by mistake because business success depends on the performance of the channel partners.
Important Topic:- IIBF RBWM STUDY MATERIAL 2023 – PRINCIPLES AND PRACTICES OF BANKING
ASSESSMENT OF INTERMEDIARIES
The last step in the channel management process is assessing the intermediaries. It is important because it will help in the review decision as to which channel partner should be retained and which channel partner should be dropped.
There are different factors that need to be considered in assessing the channel partner which are sales skills, customer’s response, competencies, quality of service that is being provided to the customers, the quantity of stock that is being purchased, the position of display in the stores, etc.
Once all the factors have been considered, one can make their decision and decide with which intermediary they want to continue their business with and with which they don’t.
LEVELS OF CHANNEL
Level of channels referred to as the consumer marketing channels or industrial marketing channels. A factor that is common in the channel levels is that both the channels include the producer and the end customer.
ZERO-LEVEL CHANNEL / DIRECT MARKETING CHANNEL
This channel contains a manufacturer that sells its products directly to the end consumer. This could be in the form of direct mail or telemarketing or even door-to-door sales.
Example: Dell online sales (laptops, Computer LEDs)
ONE LEVEL CHANNEL
And at this level of the channel, there is one intermediary working between the producer and the consumer.
Example: Insurance agent (between company and the customer), eCommerce (company tie up with e-Commerce portals to sell in the market)
The two-level channel involves moving the goods from the company godowns to intermediaries, then from intermediary to another intermediary, and then finally to the consumer or the customer. In the FMCG (fast moving consumer goods) this is popularly known as ‘breaking the bulk’.
The widely used two-level marketing channels especially in the industry of FMCG consists of wholesalers and a retailer. This way the goods move from the company to distributor, distributor to retailer, and then finally from retailer to consumer.
As it is observed in the FMCG and consumer durable industry, the three-level channel of marketing combines a role of a distributor with the dealer and retailer.
In this channel, distributors keep the stock and then distributed it to dealers, for distribution to retailers for selling to consumers.
Example: Ice-cream market, it has C&F agents stalk ice cream in refrigerated cold rooms, which are then transported to locate distributors again have refrigerated cold rooms. These local distributors then transport it to local dealers who have 10 to 12 small freezers and then finally to company retailers.
These are the perfect representations for different channel levels that come or are installed between consumers & producers.
IIBF JAIIB STUDY MATERIAL 2023 | LATEST IIBF PRESCRIBED SYLLABUS FOR MAY 2023
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