Elements of Channel Information System

Data of Channel Partners. Channel information system contains com­plete information about the profiles of channel members such as address, bank account, sales turnover, number of salespersons, infrastructure, facil­ities offered, financial strength, legal approvals, and taxation numbers, etc. CIS also comprises information about the channel member’s history of orders, payment schedules,and product sales. It also has information about the distribution of competitive companies’ products by the channel partner.

Primary Sales. Primary sales is the sales of products from the company to the intermediaries. It is easy to get the information about primary sales as it is available with the company. Primary sales data contains information about total sales, distributor-wise sales, and product-wise sales. Primary sales is not the right indicator of the actual sales in the market as salesper­sons usually overbook their channel partners to achieve their sales targets and this may result in high inventory level at the distributor level.

Secondary Sales. Secondary sales is the sale of products from the chan­nel partners to the consumers. It is the right indicator of the actual sales happening in the market. Secondary sales data contains information about total sales, distributor-wise sales, and product-wise sales. Usually, salespeo­ple collect this information about secondary sales for the previous month from the channel partners in the first week of the next month. For exam­ple, information about secondary sales of January will be collected from the channel partners in the first week of February.

Pricing Trends. Companies follow different promotional strategies like bonus offers and price discounts to increase the sales of their products. It is vital to keep an eye on the pricing trends as pricing is directly linked to the profits. Some salespersons may sell more by compromising the pricing of different products in their territories. This may also result in channel conflict at few places. CIS will have complete data about the selling price of different products in different territories.

Promotions Evaluation. A good CIS contains information about the history and impact of different advertising and sales promotions. A com­pany can evaluate the effect of different product promotions at the level of distributors and retailers. This information can be used in future planning and scheduling of promotional campaigns.

Logistic Costs. Logistic costs include freight, inventory-carrying costs, shrinkage, insurance, local taxes, and storage costs. Logistic costs consti­tute an important component of total selling expenses so it is important tokeep these costs at an optimum level without compromising with the deliv­ery schedules. It is important to ensure the availability of right product in the right quantity at a right transportation costs with the channel  members. Information about the logistic costs can also help the company to look into the possible efficiency issues.

Market Information. Market information is essential to make effective decisions related to the different sales territories, salespersons, and chan­nel members. Market information contains the data about the potential customers, market potential, competition activities, and activities of the other channel members. This information is collected by the sales force team from the channel partners.

Competition Mapping. Competition mapping is all about collecting the information about the different competition activities like new product launches, sales promotions, sales contests, pricing strategies, change in packaging, number of salespersons, customer coverage, etc.

Statutory Data. Companies need to maintain record of statutory data like sales tax, value-added tax, income tax, and information related to other legal approvals like sales tax registration at their warehouses/depots. This data is important for the day-to-day function of the distribution system and can be checked by the government officials from time to time.

Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.

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