A frequent temptation for
corporate marketing
executives, particularly those
just back from a trip abroad,
is to rearrange their foreign
distributorships. One firm
should be let go, another
hired, and so on. The itch to
change is easily inflamed by
disagreement on strategy,
disappointment in results, or
by meeting someone who might
do better as a distributor.
But changing distributors
can be costly, both in
immediate expenses (training,
set-up cost, legal
difficulties, etc.) and loss
of momentum in the market as
the new distributor takes
over. To avoid hasty
decisions, one manufacturer
has launched a procedure for
executives recommending a
distributor change. The
executive must fill out forms
that detail not only what was
wrong with the old and right
with the new distributor, but
give enough information about
the territory involved for a
headquarters vice president to
make a decision. Since
introducing the procedure the
company has found that many
ideas for changing
distributors are now abandoned
halfway through filling out
the forms; it considers this a
sign that executives are
carefully thinking out the
implications of their
proposals.
Significantly, the
questionnaires require the
advocate to deal in specific
facts. The form for
cancellation buries its
"reasons for
recommendation" question
toward the end of a series of
questions that bring out any
positive points against a
change and hint at the
difficulties involved in a
cancellation.
The forms are normally
filled out by the field sales
manager for the region. The
principle points covered:
1. Products handled, for
how long, and degree of
involvement (sales, service,
assembly, licensee, etc.).
2. Products recommended
canceled.
3. Sales, by product, over
past three years.
4. Orders in progress.
5. Credit experience,
including amount now owed,
amount past due, speed of
payment, any credit
difficulties.
6. Reasons for
recommendation to cancel.
7. Documented record of
efforts to advise distributor
that his performance is
unsatisfactory.
8. Who will personally
inform distributor of
cancellation?
9. Contractual terms for
cancellation.
10. Recommendation, if any,
for a new distributor.
