1. MathSoft Distribution Channel Strategy Spring 2000

2. Marketing Errors in MathSoft Misidentification of major decision influence among buying group members Ineffective reaction to field sales reports Lack of appreciation of : –advertising potential –the distributor/ retailer role Absence of adequate marketing research

3. Buying Group Identification Misperception of MIS role in Buying Group –Key decision makers were individual end-users –Each end-user had a budget for soft-ware –Fostering creativity among engineers is more important than saving pennies on software that may be seen as inappropriate –MIS managers were not in a position to evaluate the capability of the software –Finance managers were largely out of place

4. Ineffective Reaction to Slow Sales Sales force early inability to close sales was not recognized as a serious problem –Inability to close large volume sales of MathStation was a warning shot off the bow –MathStation product had not won plaudits –Nine sales may have involved discounting Assessment of a longer sales period not backed by detailed sales call analysis

5. Sales Force Economics Initiation of account relationships has high start-up costs, requires multiple sales calls Time consuming prospect identification seriously reduces sales force efficiency The absence of repeat sales opportunities prevents capitalizing upon front end costs Detailed tracking of early sales force call activity sheds light on sales cycle

6. Potential for Advertising Millions of potential buyers plus students Decisions made individually according to each buyer's needs Buyers highly qualified to judge product Word-of-mouth important from early adopters Only a small portion of the market tapped Continuing potential for upgrades

7. Economics of Pull Marketing Typical telemarkers & resellers have limited capability to deliver intensive information Continuous advertising required because of competition from other information sources Planned promotional programs –provide an important spark to maintain reseller interest in supplier –Offset aggressive pressure by major resellers for price advantage

8. Assortment & Information Broad-assortment resellers (such as the distributor channel) facilitate: –easy accessibility across the market –end-user product selection and availability Broad-assortment distribution systems – seldom provide intensive information to end-users –Price, convenience are the bases for intra-brand competition among these resellers VARs, w/ narrow assortments are more effective in using persuasive information

9. Telemarketing's Effectiveness Product availability must not be critical End-users must have good product evaluation capability to offset risk Weaker end-users require strong-return product guarantees, product support Enhanced by catalog mailers, demonstration diskettes to visualize product Depends upon a continuous stream of high- quality leads

10. Telemarketing & Relationships Conflict potential of telemarketing –High with regard to information (pre-sale) service channels –Low with regard to logistic-service channels Telemarketing provides opportunity for the sale of complementary products –Build up of end-user information files over time provides basis for cross-selling –Opportunity to develop cooperative marketing programs with other sellers, e.g., Sun

11. Ingersoll Rand Deja Vu Background of executive chosen to choose the channel may determine channel choice –Executive ability to transcend channel boundaries is limited –Culture of a direct channel often antithetical to the indirect –Knowledge, relationships, attitudes of sales executives derived from prior channel experience