Description
It about Stocking, order billing, transaction, sale credit, b2b buying, challenges, channel choices, structures, pricing
MANUFACTURER – CUSTOMER DISCONNECT
Manufacturer’s Needs Delivery convenience Bigger Lot size Few large customers Std business practices Immediate Payment Customer’s Needs Delivery convenience One – off requirement Market of one Flexible offers Credit
?
? ? ? ? ?
?
?
Physical Possession Ownership Promotion Negotiation Financing Risking Ordering Payment
? ?
? ?
High Volume
Low Volume
Capital Equipment
On Agreed Upon Delivery Schedule
On Agreed Upon Delivery Schedule
MRO Supplies
On Agreed Upon Delivery Schedule
Ex-Stock
Order
Order
Manufacturer
Material Title
Distributor
Material Title
Customer
Order
Order
Manufacturer Title (Billing)
Distributor Title
Customer
Material (Shipping)
Order
Order
Manufacturer
Distributor
Customer
Material Title
Manufacturer
Order
Customer
Sale Credit
Distributor
Material Title
Enquiry Generation ? Follow up for Order / Demo Support/ Payment ? Credit Risk by Channel Partner ? Installation / After Sales Support ? Account/Territory Protection
?
?
Direct
› Large Order › Multi-Location
?
Indirect
› Small Routine
Orders › Strategic Account › Customer Insistence › Technocommercial Complexity
Orders › Brand / Firm loyalty is high › Dealer equity high › Inconsistent Business Practices
Process
Need Recognition Specs / Qty Vendor short listing Inviting Bids Bid Evaluation Negotiation
Manufacturer
Yes Yes Yes Yes Yes Yes
Channel
Yes Yes Yes Yes Yes Yes
Order Execution
Relationship Mgmt
Yes
Yes
Yes
Yes
Replication of Company’s Efforts ? Organization Structure ? Techno Commercial Skills ? Money Management ? High Credibility
? Business Markets have several instances of employees turning entrepreneurs by becoming dealers
?
?
Taking over a customer
› Customer grows / Dealer ineffective
Pricing
› Large deal prices where customers may get
lower than dealer price
?
Sales Support
› Joint calls with competing dealers
?
Training
› Cost / Infrastructure /People
All Products/Full line
Company A sells Industrial oil Only through channels
Some Products/Speciality
Entire Market
Company B sells ball valves through channels
Segment
Company C sells its products direct in India but through an agent in Europe
Company D sells a low end ERP solution to small enterprises only through channels
Full Line – Entire Market ? Specialty - Entire Market ? Full Line - Segment ? Specialty - Segment ? Manufacturers Agent
?
Manufacturer (HMT)
Manufacturer (Amul)
Direct Sales force (CNC M/c)
Distributor Network (All Products)
Mass Market Distribution
Manufacturer (Amul)
Direct Sales (CSD Canteen)
Distributor Network (All Products)
Segmented Distribution
Manufacturer (Sage Publishing)
Direct Sales ( to TAPMI )
Distributor Network ( Book Stores)
Direct Marketing ( Catalogue Sales)
Sub-segmented Distribution
Manufacturer (Titan)
Direct Sales ( Institutional) Retail Outlets (COCO)
Distributor Network ( Traditional)
Direct Marketing ( Database )
Agents (Exports)
?
? ? ? ?
Time Frame Status Investment Responsibility Payment / Credit
?
? ? ? ?
Joint Programs Incentives Inventory Termination Confidentiality
?
Consumer Markets
› MRP ( all inclusive prices )
?
Business Markets
› Base Price + Excise Duty + Sales Tax + CESS +
Freight + Insurance + Octroi etc
?
B2B Channels
› Have less linkages › Are Hybrid
› Operate more like a manufacturer
› Stocking/Warehousing not very important › Negotiation / Personal Selling are important
doc_246264665.ppt
It about Stocking, order billing, transaction, sale credit, b2b buying, challenges, channel choices, structures, pricing
MANUFACTURER – CUSTOMER DISCONNECT
Manufacturer’s Needs Delivery convenience Bigger Lot size Few large customers Std business practices Immediate Payment Customer’s Needs Delivery convenience One – off requirement Market of one Flexible offers Credit
?
? ? ? ? ?
?
?
Physical Possession Ownership Promotion Negotiation Financing Risking Ordering Payment
? ?
? ?
High Volume
Low Volume
Capital Equipment
On Agreed Upon Delivery Schedule
On Agreed Upon Delivery Schedule
MRO Supplies
On Agreed Upon Delivery Schedule
Ex-Stock
Order
Order
Manufacturer
Material Title
Distributor
Material Title
Customer
Order
Order
Manufacturer Title (Billing)
Distributor Title
Customer
Material (Shipping)
Order
Order
Manufacturer
Distributor
Customer
Material Title
Manufacturer
Order
Customer
Sale Credit
Distributor
Material Title
Enquiry Generation ? Follow up for Order / Demo Support/ Payment ? Credit Risk by Channel Partner ? Installation / After Sales Support ? Account/Territory Protection
?
?
Direct
› Large Order › Multi-Location
?
Indirect
› Small Routine
Orders › Strategic Account › Customer Insistence › Technocommercial Complexity
Orders › Brand / Firm loyalty is high › Dealer equity high › Inconsistent Business Practices
Process
Need Recognition Specs / Qty Vendor short listing Inviting Bids Bid Evaluation Negotiation
Manufacturer
Yes Yes Yes Yes Yes Yes
Channel
Yes Yes Yes Yes Yes Yes
Order Execution
Relationship Mgmt
Yes
Yes
Yes
Yes
Replication of Company’s Efforts ? Organization Structure ? Techno Commercial Skills ? Money Management ? High Credibility
? Business Markets have several instances of employees turning entrepreneurs by becoming dealers
?
?
Taking over a customer
› Customer grows / Dealer ineffective
Pricing
› Large deal prices where customers may get
lower than dealer price
?
Sales Support
› Joint calls with competing dealers
?
Training
› Cost / Infrastructure /People
All Products/Full line
Company A sells Industrial oil Only through channels
Some Products/Speciality
Entire Market
Company B sells ball valves through channels
Segment
Company C sells its products direct in India but through an agent in Europe
Company D sells a low end ERP solution to small enterprises only through channels
Full Line – Entire Market ? Specialty - Entire Market ? Full Line - Segment ? Specialty - Segment ? Manufacturers Agent
?
Manufacturer (HMT)
Manufacturer (Amul)
Direct Sales force (CNC M/c)
Distributor Network (All Products)
Mass Market Distribution
Manufacturer (Amul)
Direct Sales (CSD Canteen)
Distributor Network (All Products)
Segmented Distribution
Manufacturer (Sage Publishing)
Direct Sales ( to TAPMI )
Distributor Network ( Book Stores)
Direct Marketing ( Catalogue Sales)
Sub-segmented Distribution
Manufacturer (Titan)
Direct Sales ( Institutional) Retail Outlets (COCO)
Distributor Network ( Traditional)
Direct Marketing ( Database )
Agents (Exports)
?
? ? ? ?
Time Frame Status Investment Responsibility Payment / Credit
?
? ? ? ?
Joint Programs Incentives Inventory Termination Confidentiality
?
Consumer Markets
› MRP ( all inclusive prices )
?
Business Markets
› Base Price + Excise Duty + Sales Tax + CESS +
Freight + Insurance + Octroi etc
?
B2B Channels
› Have less linkages › Are Hybrid
› Operate more like a manufacturer
› Stocking/Warehousing not very important › Negotiation / Personal Selling are important
doc_246264665.ppt