How should we address the most pernicious habits and misconceptions?
The road to master the Distribution Channel is undeniably uphill, arduous and thorny. To ensure it does not become also frustrating, managers need to be schizophrenically minded: focus on the big picture and be paranoiac about the implementation. Along their journey they will need to find sound answers to critical questions and be aware of the multiple conceptual traps. For example, shall a vendor grant unconditional incentives? If yes, why and when? What is the ideal proportion of performance-based pay-outs? When is it appropriate to include sunk and opportunity costs in the analysis? Why is elasticity often over-estimated and why do targets sometimes fail to reach their initial objectives?
This chapter addresses the most relevant pitfalls and provides concrete solutions to real-life dilemmas from pricing execution to incentives decisions, contribution margins, revenue drivers, credit policies, targets setting.
While reading the 9 topic-dedicated paragraphs of this section you will visualize, anticipate and correct organizations’ most frequent methodological flaws. You will dispose of several answers to common problems and develop the right mind-set to solve specific issues that might appear within your company.