Summary

A smart distribution strategy has been one of the key success factors for many high-tech firms, which have managed to survive and even thrive during the recent economic downturn.

Marketing channels decisions are very crucial decisions facing marketers [28]. The first decision is to choose how to balance push and pull marketing, because this choice has a significant impact on the other elements of the marketing mix.

Selecting distribution channels for high-technology products depends upon the size of the market, the cost of the distribution network, the product characteristics, the level of control on the network, and its flexibility. Many high-tech products require distributors to make use of marketing, financial, and human resources that are superior to those needed for more traditional products. The marketing manager must therefore know how to select, manage, and evaluate distributors.

When a sales force directly sells high-tech products, preliminary prospecting is needed, followed by teamwork that facilitates a salesperson to call upon numerous specialists, and finally, an emphasis on customer follow-up in order to reassure them of a new technology. The importance of a technology similarly shapes the salesperson's support activities, for communication, as well as for information processing and logistics.

Selling high-technology products often demands a high level of competency and as a result a higher profile and education compared to other industries. The company should take this into account when recruiting, managing, and evaluating its sales force.

Finally, high-tech firms can earn more revenue and profit from aftersales activities since those services can achieve profit margins double that of the profitability of the goods originally sold. In after-sales, the price is less an issue than consideration;the key issues are reliability, swiftness of delivery, and availability of repair and maintenance services. The most effective organization is to set up an independent business, such as a service center or an after-sale department with its own marketing and sales organization, dedicated to after-sales solutions.

References

[1] Wheeler, S., and E. Hirsh, Channel Champions, How Leading Companies Build New Strategies to Serve Customers, New York: John Wiley & Sons, 1999.

[2] Coughlan, A., E. Anderson, and L. W. Stern, Marketing Channels, 6th ed., Upper Saddle River, NJ: Prentice Hall, 2001.

[3] Anderson, E., G. S. Day, and V. K. Rangan, "Strategic Channel Design," Journal of Product Innovation Management, Vol. 15, No. 5, 1998, pp. 472-473.

[4] Rosenbloom, B., Marketing Channels: A Management View, Hinsdale, IL: Dryden Press, 1999.

[5] Mudambi, S., and R. Aggarwal, "Industrial Distributors: Can They Survive in the New Economy?" Industrial Marketing Management, Vol. 32, No. 4, 2003, pp. 317-326.

[6] Moriarty, R. T., and U. Moran, "Managing Hybrid Marketing Systems," Harvard Business Review, Vol. 68, No. 6, 1990, pp. 146-156.

[7] Mitchell, T., "Cisco Resellers Add Value," Industrial Marketing Management, Vol. 30, No. 2, 2001, pp. 115-119.

[8] Cross, S., Changing Channels: Increase Your Revenue With Lessons Learned in the High-Tech Trenches, Princeton, NJ: Xlibris Corporation, 2002.

[9] Dayal, S., T. D. French, and V. Sankaran, "The E-Tailer Secret Weapon," The McKinsey Quarterly, No. 2, 2002, pp. 72-80.

[10] Li, Z. G., W. L. Murray, and A. Efendioglu, ""Marketing PCs to China," Business Horizons, Vol. 45, No. 6, 2002, pp. 60-66.

[11] Gilliland, D. I., "Towards a Business-to-Business Channel Incentives Classification Schemes," Industrial Marketing Management, Vol. 32, No. 1, 2003, pp. 55-68.

[12] Mehta, R., A. J. Dubinsky, and R. E. Anderson, "Marketing Channel Management and the Sales Manager," Industrial Marketing Management, Vol. 31, No. 5, 2002, pp. 429-439.

[13] Mehta, R., B. Rosenbloom, and R. Anderson, "Role of the Sales Manager in Channel Management: Impact of Organizational Variables," Journal of Personal Selling and Sales Management, Vol. 20, No. 2, 2000, pp. 81-89.

[14] Abratt, R., and P. M. Kelly, "Customer-Supplier Partnerships. Perceptions of a Successful Key Account Management Program," Industrial Marketing Management, Vol. 31, No. 5, 2002, pp. 467-476.

[15] Napolitano, L., "Customer-Supplier Partnering: A Strategy Whose Time Has Come," Journal of Personal Selling and Sales Management, Vol. 17, No. 4, 1997, pp. 1-8.

[16] Thull, J., Mastering the Complex Sale: How to Compete and Win When the Stakes Are High, New York: John Wiley & Sons, 2003.

[17] Kadish, J. E., Global High-Tech Marketing, Norwood, MA: Artech House, 1993.

[18] Richardson, L., Stop Telling, Start Selling: How to Use Customer-Focused Dialogue to Close Sales, rev. Ed., New York: McGraw-Hill, 1997.

[19] Kevin, D., andE. Wolfe, Socratic Selling: How to Ask the Questions That Get the Sale, New York: McGraw-Hill, 1995.

[20] Bishop, S., "The Strategic Power of Saying No," Harvard Business Review, Vol. 77, No. 6, 1999, pp. 50-58.

[21] Waterhouse, S., The Team Selling Solution: Creating and Managing Teams That Win the Complex Sale, New York: McGraw-Hill, 2003.

[22] Parinello, A., and D. Waitley, Selling to VITO (The Very Important Top Officer), 2nd ed., Holbrook, MA: Adams Media Corporation, 1999.

[23] Morgan, A. J., and S. A. Inks, "Technology and the Sales Force," Industrial Marketing Management, Vol. 3, No. 5, 2001, pp. 463-473.

[24] Dubinsky, A. J., R. Mehta, and R. E Anderson, "Satisfaction with Sales Manager Training—Design and Implementation," European Journal of Marketing, Vol. 35, No. 1, 2001, pp. 27-50.

[25] Knecht, T., R. Leszinski, and F. A. Weber, "Making Profits After the Sale," The McKinsey Quarterly, No. 4, 1993, pp. 79-86.

[26] Whitney, L. A., et al., "The Secret Life of Factory Service Centers," The McKinsey Quarterly, No. 3, 2002, pp. 106-116.

[27] Bundschuh, R. G., and T. M. Dezvane, "How to Make After-Sales Services Pay Off," The McKinsey Quarterly, No. 4, 2003, pp. 116-128.

[28] A. Coughlan, E. Anderson, and L. W. Stern, Marketing Channels, 6th ed., Upper Saddle River, NJ: Prentice Hall, 2001.

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