[MUSIC] Welcome back. Today, we are going to explain what are the key factors in channel management and how to solve conflict. After a company has reviewed its general alternatives and determined the best channel design, it must implement and manage the chosen channel. It must select, motivate, and evaluate individual intermediaries for each channel. It also has to modify channel design and arrangement over time. As the company grows, it can also consider channel expansion in the international market. The first management factor is select. We need to define what characteristics distinguish the better intermediariaries. For example, number of years in the business, carried, or growth and profit in core, financial strength, service reputation. The second factor is to train and motivate. We determine needs and wants, and tailor channel offering to provide them with superior value. Implementing training, market research, and capability building programs can motivate and improve intermediary's performance. We need to constantly communicate that intermediaries are crucial partners in a joint effort to satisfy the end user. The third factor is evaluation. We will periodically evaluate intermediaries performance against a standard as a sales quarter attainment, achievement levels or customer delivery time, treatment of timely channel of goods, aspects like that. And as the company grows, we will take channel modification decision and global channel considerations. Regarding channel modification decisions, we have to acknowledge that consumer buying patterns change, the market expands, new competitors arise, innovative distribution channels emerge. For example, Avon, pioneering door-to-door selling took a channel modification decision due to women entering the workforce. They started to include house parties and online marketing. If you refer to global channel considerations, international markets pose distinctive challenges including variations in customer shopping habits. As an example, for example, Smart, when they enter in the US, they had their own dealership and it did not succeed until they decided to share the dealership with Mercedes Benz. Now with the proliferation of customer segments and channel possibilities, more and more companies have adapted their multi channel distribution system. Today, most companies distribute through multiple channels. Adding more channels offers many advantages to companies, market coverage, lower channel cost, and customer serving. However, new channels typically introduce conflict, and problems with control and cooperation. No matter how well channels are designed and managed, interests of independent business entities do not always coincide and conflicts among channels emerge as a local consequence of companies growth and maturity. Channel conflict can be caused by goal incompatibility, unclear roles and rights, differences in perception, intermediaries that don't mention the manufacturer. So to minimize conflict, we must establish clear criteria to define boundaries among different channels, for example, geographic or territory exclusivity, segmentation by product line or industry cover or size of customer. Managing channel conflict, some can be constructive and lead to a better attention to a changing environment, but too much is dysfunctional. The challenge is not to eliminate, but to manage it better. So there are diverse mechanisms to manage channel conflict and legal course should be the one to avoid and to use the last. Furthermore, nowadays, the big challenge is to combine the multiplicity of channels in an only channel marketing strategy. Having all the channels integrated are on the customer. Customers want to get products and services when they need them and have these delivered in many different ways. To respond to these needs, marketers need to use different channels, fully integrated, to deliver a seamless customer experience by sharing the data captured through one channel with the rest of the channel. Furthermore, we need to treat every customer as a unique individual. In the next class, we will learn about the channel cooperation. Why? Twin marketing has become so important on how channels are evolving from being clients to partners of the manufacturers. [MUSIC]