The cover story of 360 Magazine’s latest issue, dated January 31, 2006, elaborates the growing trend of manufacturers to establish a better working relationship with their end-customers. Now, while this is a welcome move in itself and will definitely help the buyer, it’s important that they don’t do this by alienating their distribution partners.
But it is more important for the partner to realize that this move does not threaten his position in anyway. Over the years, the job description of the distributor has evolved. Earlier, when the market was just opening up, the distributor had a dual responsibility – brand awareness and logistics. Now the roles are well-defined: the manufacturer creates awareness and the distributor ensures the products are in supply.
However, there is a slight spoke in the wheel that could disrupt this smooth system. In their haste to reach the end-customers, some manufacturers are bypassing a bit too many layers in the channel. What’s even more disturbing is the tendency of manufacturers to discount the importance of their channel players once the brand has picked up market share. Dishonoring backend commitments, not creating adequate service infrastructure, and violating warranty agreements are issues that most manufacturers should stay clear off.
The ecosystem of the channel is frail and completely interdependent. It’s crucial for both the manufacturers and the partners to realize that each is a means to the end and not the end in itself.