Channel Management B2B Marketing
The report analyzes the case studies of Lotus Development Corporation, Aqualisa Quartz Shower and Atlantic Computer. The report defines the problem statements and identifies the alternatives in the case, and the report provides recommendations to assist the companies to make effective decisions. The Lotus was facing challenges whether to discontinue with its distributor and dealers and use its saleforce to deal directly with its corporate users. The report recommends that the Director of Sales Operations should continue using its distributor and dealers; however, the company should use its saleforce to deal directly with corporate users demanding for direct services.
However, the report recommends that the Harry Rawlinson (HBS) should use 2 or 3 minutes TV ads to demonstrate the innovation leap of Aqualisa Quartz Shower. The promotion strategy will assist the company to enjoy the sales advantages from the Aqualisa Quartz Shower. In the third case, the report recommends that the company should use cost-plus pricing approach to fix the new pricing.
Lotus Development Corporation Case
Lotus Sales Corporation is well-known for its development of a spreadsheet package Lotus 1-2-3, which dominated the software market in 1980s. In 1985, Lotus was a clear leader in the computer industry with sales of $225 Million, followed by Ashton-Tate and Microsoft with sales of $100 million to $125 million respectively. In 1980s, the Lotus was able to achieve powerful sales using its distributors and dealers. Thus, the company offered extensive training to its dealers using promotion called "Dealer Demo Days" to achieve powerful sales in the market.
Problem Statements
The case Lotus "Channel Choice: Direct vs. Distribution" discusses the preoccupation of Director of Sales Operations of Lotus Development Corporation, John Shagoury on the decision whether to bypass the company distributor and dealers and deal directly with saleforces in order to sell the company products to large corporate users. While the decision has some benefits, there are still several shortcomings associated to deal directly with salesforces. Shagoury attempted to make this radical decision because the company sophisticated corporate buyers were starting to demand for direct servicing. However, the buying trends in the industry made this decision very difficult to implement. (Harvard Business School, 1994).
The paper analyzes the alternatives facing Shagoury in order to make effective decision on Direct vs. Distribution.
A list of alternatives
In 1980s, Lotus relied on its distributors and dealers to make major sales and in 1985; the company realized 47% of its sales through its distributor, who later sold to retail dealers authorized by Lotus. Typically, approximately 70% of large and medium businesses buy directly from distributors and dealers making Lotus to enjoy several benefits:
First, the company was able to sell large quantity of its stock through dealers and distributors since the distributors always had product in stocks, and this assisted the company products to reach retailers and corporate clients. With the sales assistance from dealer and distributor, the company net income was $14.3 Million in 1983, $36 Million in 1984 and $38.1 Million in 1985.
In 1986, the Lotus sale force consisted of 90 personnel and they included account representatives (reps) and systems engineers. However, 75 of sale personnel handled sales responsibilities while other 15 personnel served as technical consultant to potential buyers. Formerly, Lotus 1-2-3 were sold through distributor and dealers and as industry evolved, dealers were competing with Lotus's salesforce. However, in 1984, the company discontinued with saleforce because of the pressure from the company's dealers and distributors.
With growth of the industry, corporate users were increasingly demanding for direct sale services from the company, and increasing number of companies were requesting for direct delivery from the company locations. Although, Lotus managers were aware of recent changes in the market trends, however, they were helpless because company's distribution logistics were not geared towards distributing small lots since Lotus preferred dispatching its product in large batch in pallet loads of 500 units. John Shagoury believed that with the changes in the market trends, the sale force would be better serving the corporate users than using distributors and dealers since largest percentage of Lotus users were corporate organizations.
Recommendations
This report recommends that Lotus Development Corporation should continue using distributors and dealer. However, the company should develop a small unit of saleforces to cater for the corporate users insisting for direct sale services. Radical switching from distributor and dealers to the company Saleforce at this time could totally jeopardize the company market advantages because the company did not have enough Saleforce to serve the entire corporate user. The...
Channel Management B2B marketing In mid-1980's, the PPCo's vice president studied how to deal with the ever-increasing "gray market" for their hard drives. He held a meeting with managers to evaluate and resolve the problem. This report documents a good case study of how gray market developed in the disk industry. It dwells on the pricing policies, management of sales force and strategies of distribution. The main issues PPCo disk drive
This is called becoming a trusted advisor to the customers, and while there are many books written on this topic every year, the concept of the trusted advisor is that the members of a distribution channel form a team to assist customers in assessing their needs, modifying products to specifically meet those needs, and creating a strong foundation of support. AMR Research (2003) in defining the complexity of fulfilling
Sustainable Marketing LED Bulb - Marketing Plan Marketing Situation Analysis Desired Outcomes Marketing Strategies Action Plan Implementation, Controls, and Evaluation LED technology has made many breakthroughs in recent years. The most notable of which is its level of cost effectiveness. However, the initial investment required to implement LED light bulbs still exceeds the alternative market choices. Yet the total cost of ownership offers consumers sizable gains. The market segment that this marketing plan is catered to is
The majority are in the Developing Phase (45%) with just 3% in Optimizing. This indicates that there is a strong need for greater integration of social networking, permission marketing and customer information management in many e-commerce strategies today. The results shown in Figure 3 also indicates there is significant upside potential for companies who attempt to grow quickly through the integration of social networking, trust-based permission marketing based on
direct marketing help companies deliver their objectives? The principles of direct marketing help companies deliver their objectives Times are changing, the economies, laws and rules are also changing, however, the principles of marketing remain the basic driving factor of success for any business. The marketing strategies are changing, from manual to digital. Nonetheless, the challenge in understanding and executing the principles of direct marketing remains with the business enterprises. Marketing strategy
These three strengths of their content methodology, depth of expertise in the Asian manufacturing sector, and commitment to being a leader in electronic enablement and IT form a defensible competitive position. As a result, the company is well positioned to attract investors. In supporting the contention that Global Sources is well positioned to attract investors based on the three unique strengths of a scalable content collection and management methodology, expertise
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now