Transcript Roger`s Vision for the Next Three Years

4MD3 Business to Business
Marketing
Lecture 10
Steve Howse
March 9, 2009
Wilson’s Social Style Matrix
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PREVIEW OF DISTRIBUTION
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BM/CM differences
the basic distribution decision
making that decision
middleman types for indirect channels
finding middlemen
website-induced channel conflict
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BRIEF REVIEW OF CHANNEL
TERMS
• direct channel
• indirect channel
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BM/CM DIFFERENCES DISTRIBUTION
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direct channel dominant by dollar sales
but not by other measures
many middleman types unique to BM
no retailers!
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THE BASIC DISTRIBUTION
DECISION
• indirect channel or direct?
• get the decision right, because ..
• it determines who does the critical PS
• and it’s hard to reverse…
o e.g. indirect channel to direct
o e.g. direct channel to indirect
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FAVOUR THE DIRECT CHANNEL
WHEN YOUR PRODUCTS ARE…
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expensive
technical or complex
custom designed
new to the market
in need of strong support services
a high-risk purchase for your customer
purchased at high level
bulky or heavy
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FAVOUR THE DIRECT CHANNEL
WHEN YOUR CUSTOMERS ARE…
• few, large or close together
• buying steadily year-round
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FAVOUR THE DIRECT CHANNEL
WHEN YOUR OWN FIRM…
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wants to control "customer interface"
wants focused sales attention
has wide product range
has necessary time and money
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INDIRECT-CHANNEL
TERMINOLOGY
• principals
• wholesalers
o meaning
o always independent
o merchant and agent wholesalers
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MERCHANT
WHOLESALERS
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AKA (industrial) distributors
buy the manufacturer’s product
and usually physically possess it too
their reward is margin
usually “full function” middlemen
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TYPES OF MERCHANT WHOLESALER
AKA (INDUSTRIAL) DISTRIBUTOR
o dealers
o contractor-dealers
o paper merchants
o steel service centres
o trading companies
o drop shippers - AKA desk jobbers
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AGENT WHOLESALERS
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don’t buy the manufacturer’s product
and seldom physically possess it
reward is commission plus expenses
usually not “full-function”
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TYPES OF
AGENT WHOLESALER
o manufacturers' agents AKA reps
o selling agents
o brokers
o export management companies
o commission merchants
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THE PROS OF
DISTRIBUTORS VS. REPS
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distributors are more “locked in” to you
are bigger and more stable
are more likely to provide national coverage
are best for "catalogued products"
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THE CONS OF DISTRIBUTORS VS.
REPS
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distributors try to shave selling expenses
favour bigger, more-established customers
and more-established products
have more channel control than reps
carry more product lines
carry competing products
give inferior market feedback
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FINDING MIDDLEMEN
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check directories
run ads in trade publications
exhibit at or visit trade shows
consult Canadian Trade Commissioners
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MINIMIZING WEBSITE INDUCED
CHANNEL CONFLICT
• use Web for communication only
• alternatively..
o don’t price lower on Web
o don’t sell all products on the Web
o don’t sell to all customers
o use different brand name for Web sales
o involve middleman in website
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