[MUSIC] Welcome back, today we are going to explain what are the key factors in channel management. We will find out what important decisions we need to take into account. After a company has reviewed its channel alternatives and determined the best channel design, it must implement and manage the chosen channel. For that, it has to select, motivate and evaluate the intermediaries for the channel. And also modify the channel design and arrangement over time. As the company grows it can also consider channel expansion in the international markets. So the first management factor is to select. We need to define what characteristic distinguish the better intermediaries. And that would be, for example, number of years in the business. Or other lines that they carry, o growth and profit record, or financial restraints, or service reputation. If you are talking about sales agents we need to evaluate, for example, the number and character of other lines and the size and quality of the sales force. A second factor is to train and motivate. We determine needs and wants and tailor the channel offering to provide them with superior value. So implementing training, marketing research, capability building programs can motivate and improve intermediaries' performance. We need to constantly communicate that intermediaries are crucial partners in a joint effort to satisfy the end customer. A third factor is evaluation. We will periodically evaluate the intermediary's performance against the standards. Such as sales quota attainment, average inventory levels, customer delivery time, treatment of damaged and lost goods, cooperation in promotional and training programs. And as the company grows, we will take channel modification decisions and global channel considerations. Regarding these channel modification decisions, we have to acknowledge that customer buying patterns change, that markets expand, new competitors arise, and innovative distribution channels emerge. And the product moves also into later stages in the product cycles. So companies, for example like Avon, pioneer of the door to door sale, took a channel modification decision when women enter into the workforce. And they have started to include, for example the online marketing. Okay, there is a second aspect that is important. If we refer to global channel consideration, international markets pose a distinct challenge, including variation in customer shopping habits. For example, Smart, when they enter into the US market they had their own dealership and they didn't succeed until they decided to share their dealership with Mercedes Benz. So now, once that we know the decisions that we need to take into account, when managing a distribution channel. Next, we will explain the importance of the marketing logistics in the supply chain management. [MUSIC]