Question

Milwaukee is a famous name in industrial quality power tools. Its products are renowned for their rugged design and reliability. Most of its products are sold through wholesalers (industrial distributors) to a wide variety of power tool users including factories, contractors, mechanics, schools, government agencies, and many others. Milwaukee claims that almost 80% of its distributors have been associated with it for 25 years or more. Milwaukee describes itself as a consistent and reliable partner to distributors. The company says, “Our business succeeds when your business succeeds.”

     Comment on this statement in terms of its possible implications for 'channel design'. Please explain in more detail.

Answer 1

Channel design decisions are critical because they determine a product's market presence and buyers accessibility to the product. Channel decisions have additional strategic significance because they entail long-term commitments. It is easier to change prices or promotion than to change marketing channels.

Producers and manufacturers, wholesalers and retailers all face channel design decisions. Producers and manufacturers 'look down' the channel. Retailers 'look up' the channel . While wholesale intermediaries face channel design from both perspectivies.

Here, the statement "our business succeeds when your business succeeds" shows that the organisation has placed its trust on the channel members and has been successful in developing an effective channel which is responsible for attaining the desired objectives for the organisation.