DEVELOPING MAJOR STRATEGIES

1
DEVELOPING MAJOR STRATEGIES

• Major Choices
• Relative balance between direct sales and sales
  through
• intermediaries
• Class of intermediary in terms of served
  markets
• Types of intermediary in terms of served
  markets
• Relative intensity of distribution by
  geographic area
• Locus of distribution functions the allocation
  of
• distribution tasks to particular channels in
  the
• distribution system
• Franchise terms and conditions

2

• Channels Functions
• Selling
• Channels support
• Physical distribution
• Product modification and after-sale service
• Risk assumption

3

• CHANNEL MANAGEMENT DECISIONS
• Selecting Channel Members
• Number of years in business, other lines
  carried, growth
• profit record, solvency, duration
• Margins, co-op ad. Allowances, displays sales
  contest,
• long-term partnership
• Evaluation
• Sales quota, average inventory levels, customer
• delivery times, treatment of damaged goods

4
COMPONENTS OF MARKET SEGMENT LEADERSHIP
Product Superiority Product value-added
product functional performance product
line breadth user technical support product
customization Reseller value-added supply
availability product customization
after-sale service
Channels Strength Direct salesforce
end-market presence Intermediaries breadth
of market coverage resellers local
market positions Channels entry barriers
MARKET SEGMENT LEADERSHIP
Installed Base Replacement sales Spare
parts and service revenues Supplies and
related equipment demand
5
CHANNELS PLC
Value Added By Channel
H
L
Decline
L
Intro
Growth Rate
Growth
R
Mature
E. G. Specialty Store Higher Volume (dept.
stores) Lower Cost (mass dist.) Lower Cost
(discounters)