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Should Channel Management be a CXO role?
Yes, it should rank alongside Marketing & Sales
No, It should be part of the CMO/Marketing Director's role
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No, it cuts across all functions
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ROUTES TO MARKET

LOUIS STERN, KELLOGG SCHOOL OF MANAGEMENT: DEALING WITH JUSTICE
Louis W Stern, Professor Emeritus of Marketing at the Kellogg School of Management at Northwestern University, is one of the fathers of modern channel theory and practice. Over his forty years as an academic, he has consulted to a plethora of blue chip companies including IBM, Roche, ExxonMobil, Ford and HP. He is co-author of Marketing Channels, the leading textbook on routes to market. Routes To Market editor Max Hotopf talks to him about what justice really means in channel partnerships, how to segment customers and the dangers of focus groups....

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RTM: I know you have been doing a lot of work on justice in distribution. I have to say that the concept is one I can immediately understand. In my experience, distributors and other partners are constantly looking at, and thinking about, their relationships with suppliers, in terms of justice. Can we talk about that please?

LS: Sure. The bedrock of any relationship is trust. This applies as much to your spouse as it does to how you get on with your distributor. That sounds like motherhood and apple pie, but, recently, there has been a lot of work deconstructing trust and looking at how to engender it.

It turns out that you need three things before you will trust someone. You need to regard them as competent. You have to believe they are capable of delivering what they say they will. And you have to see them as honest. You have to believe they will do what they say they will. But that alone is not enough. If Mike Tyson tells me he is going to bite my ear off I believe he honestly means it and that he is entirely competent to chomp it up! But I certainly wouldn't trust him.

That third vital element is benevolence. I have to believe you have my best interests at heart before I will trust you.

RTM: OK, so how do you achieve that?

LS: Justice is the framework you can use to achieve trust. And it turns out that there are two kinds of justice. First, we have distributive justice, which is how we slice up the cake - what margin do we both get? Both sides have to believe that this is fair.

Secondly, we have something called procedural justice, which is about how we are going to deal with each other, especially in disagreements. This is about how to co-operate with one another on a day-to-day basis to make relationships fluid and sustainable.

RTM: So which is most important?

LS: Most people would say how we slice up the cake is the big issue. Actually, the data show that how we interact and deal with each other is absolutely key. 


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