1. 4MD3 Business to Business Marketing Lecture 10 Steve Howse March 9, 2009

2. 2 Wilson’s Social Style Matrix

3. 3 PREVIEW OF DISTRIBUTION BM/CM differences the basic distribution decision making that decision middleman types for indirect channels finding middlemen website-induced channel conflict

4. 4 BRIEF REVIEW OF CHANNEL TERMS direct channel indirect channel

5. 5 BM/CM DIFFERENCES - DISTRIBUTION direct channel dominant by dollar sales but not by other measures many middleman types unique to BM no retailers!

6. 6 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… oe.g. indirect channel to direct oe.g. direct channel to indirect

7. 7 FAVOUR THE DIRECT CHANNEL WHEN YOUR PRODUCTS ARE… 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

8. 8 FAVOUR THE DIRECT CHANNEL WHEN YOUR CUSTOMERS ARE… few, large or close together buying steadily year-round

9. 9 FAVOUR THE DIRECT CHANNEL WHEN YOUR OWN FIRM… wants to control "customer interface" wants focused sales attention has wide product range has necessary time and money

10. 10 INDIRECT-CHANNEL TERMINOLOGY principals wholesalers omeaning oalways independent omerchant and agent wholesalers

11. 11 MERCHANT WHOLESALERS AKA (industrial) distributors buy the manufacturer’s product and usually physically possess it too their reward is margin usually “full function” middlemen

12. 12 TYPES OF MERCHANT WHOLESALER AKA (INDUSTRIAL) DISTRIBUTOR odealers ocontractor-dealers opaper merchants osteel service centres otrading companies odrop shippers - AKA desk jobbers

13. 13 AGENT WHOLESALERS don’t buy the manufacturer’s product and seldom physically possess it reward is commission plus expenses usually not “full-function”

14. 14 TYPES OF AGENT WHOLESALER omanufacturers' agents AKA reps oselling agents obrokers oexport management companies ocommission merchants

15. 15 THE PROS OF DISTRIBUTORS VS. REPS distributors are more “locked in” to you are bigger and more stable are more likely to provide national coverage are best for "catalogued products"

16. 16 THE CONS OF DISTRIBUTORS VS. REPS 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

17. 17 FINDING MIDDLEMEN check directories run ads in trade publications exhibit at or visit trade shows consult Canadian Trade Commissioners

18. 18 MINIMIZING WEBSITE INDUCED CHANNEL CONFLICT use Web for communication only alternatively.. odon’t price lower on Web odon’t sell all products on the Web odon’t sell to all customers ouse different brand name for Web sales oinvolve middleman in website