When devising a channel strategy, it is necessary to be realistic about the intermediary's motives. What is "cherry picking" and how does it affect careful selection of a channel strategy?

Question

What will be an ideal response?

Answer 1

Selection of agents is very important in the success of a channel strategy. These agents sometimes engage in what is called cherry picking, the practice of accepting orders only from manufacturers with established demand for certain products and brands. Cherry picking can also take the form of selecting only a few choice items from a vendor's product lines. The cherry picker is not interested in developing a market for a new product, which is a problem for an expanding international company. Manufacturers should provide leadership and invest resources to build the relationship with a desired distributor. A manufacturer with a new product or a product with a limited market share may find it more desirable to set up some arrangement for bypassing the cherry-picking channel member. In some cases, a manufacturer must incur the costs of direct involvement by setting up its own distribution organization to obtain a share of the market. When the company's sales finally reach critical mass, management may decide to shift from direct involvement to a more cost-effective, independent intermediary.
An alternative method of dealing with the cherry-picking problem does not require setting up an expensive direct sales force. Rather, a company may decide to rely on a distributor's own sales force by subsidizing the cost of the sales representatives the distributor has assigned to the company's products. This approach has the advantage of holding down costs by tying in with the distributor's existing sales management team and physical distribution system.