Functions The Principals Have To Perform

Building the Brand: Dealers always want their principals to provide them a winning brand. Discriminating dealers give far more emphasis to the firm’s performance on the brand front rather than the trade margin offered by the firm. They hesitate to take dealership of weak brands even if they offer very attractive margins. And, they are happy to deal strong brands even if the margins offered are low.

Functions, the Principals have to Perform

• Supply quality products
• Build the brand and keep it a winner
• Regular, adequate and prompt supply of the product
• Effective servicing
• Advertising and sales promotion support

They overwhelmingly vote for products/brands that move from the shelf without any need for pushing. Likewise, they vote for products and brands that make their customers come back to their shops with enthusiasm. They also prefer products/brands that provide them volume margins rather than value margins. Dealers have to put in a lot of their time. Effort. shelf space and money on the various products that they deal in, and they certainly do not want to get stuck with a weak brand. In particular, when a company offers a new brand the dealers want to be sure that the company would continue with the brand and build it well.