Ch. 9 Stewarding Multiple Channels I.Meaning II.The Underlying Reasons I.Market Maturation II.Sales Growth Goals III.Evolution of Customer Demand IV. Availability of Internet

Ch. 9 Stewarding Multiple Channels III. Coordinating Multiple Channels 1. Set Product Boundaries 2. Set Market (Customer) Boundaries 3. Promote Price Convergence 4. Compensate for Cost Difference

Ch. 9 Stewarding Multiple Channels IV. Channel Raiding and Cisco’s Responses 1. Construct Penalties or Incentives 2. Rationalize Distribution Intensity V. Organizing for Multiple Channels 1.Key: Know why you need multiple channels 2.Coordination between salesforce and independent distributors  Delegate Channel Control

Ch. 10 Internet as a Channel I.Initial Impetus: (Transaction) Cost Savings cf) Benefit Enhancement II. How and Where the Internet Works 1. Supplier side: Concentrated vs. Fragmented 2. Customer side: Concentrated vs. Fragmented

Ch. 10 Internet as a Channel Market Maker Fragmented Customers Concentrated Concentrated Fragmented Suppliers Seller’s Agent (Customer Aggregator) Buyer’s Agent (product aggregator) Directed Channels

Ch. 10 Internet as a Channel I.Directed Channel: Provides additional utility (cost savings) to the same of group of customers II. Seller’s Agent: Few, Large suppliers serve Fragmented customers ex) Auction III. Market Maker: Many sellers meet many buyers Ex) E-bay IV. Buyer’s Agent: Fragmented suppliers sell to few, Large buyers

Ch. 10 Internet as a Channel III. Three Myopias on Internet Channel 1.View the Internet solely as a way to squeeze out channel costs. Ex) Online grocery shopping 2. See the Internet as an unbounded opportunity To expand revenues. Ex) Air travel channel 3. Generate revenue based on Internet’s ability To overcome information asymmetry. Ex) Car buying information by Autobytel