Applying Performance Criteria, Essay Example

The criteria for evaluating the performance of channel members are difficult to establish. This is especially so in cases where the manufacturer is dealing with several channel members (Spriggs 327). There are multiple criteria combined informally and multiple criteria, which are formally. Each criterion has its advantages and disadvantages, but when other factors are into consideration when selecting channel members, then it is possible to have a fair and equitable performance criterion for evaluating channel member performance (Spriggs 335). These factors include nature of the product, number of channel, members’ involved, relative importance attached to each channel member, as well as degree of control by the manufacturer.

The performance criteria used should address possible sources of conflict between manufacturers and channel members for it to be fair and equitable (Spriggs 338). The nature of the product is to evaluate the volume of sales depending on whether the sales margins are high or slim. The channel members want to carry products, which fetch high sales, and the targets set by manufacturers should correspond to the demand of the product in the respective market. The manufacturer should also consider that channel members are independent businesses with their individual profit goals and mandates. The performance criteria should consider whether the channel member is independent or is part of the manufacturer’s business for fair control in terms of setting targets and goals.

The performance criteria should take into consideration the number of distribution channels being used by the manufacturer (Spriggs 343). In case of multiple channel members with limited market, the manufacturer should allow the various retail channels to come up with their own price and level of service. The customer has liberty to choose from which retail format to purchase making it unfair for the manufacturer to expect all channel members to perform the same.

Works Cited

Spriggs, Mark T. “A framework for more valid measures of channel member performance.” Journal of Retailing, 70. 4 (2005): 327–343. Print.