Written case Format

Name: Shreya Bhattacharya Due Date / Day: 2 feb 2012 Class: B2B(a2) Roll No: 2802415 Subject: B2B case No: 7 Title of the case: alfa networks Signature: (Of the student)

Name (Of the faculty): prof: Avinash Deshpande Signature: Date of Evaluation: Marks out of 10

Remarks (By Faculty):

_________________________________________ ________________________________________ _________________________________________ _________________________________________

Solution: 1. How Suresh kumar will overcome the problems in the existing distribution channel? (a) Improved management (vertical marketing system) of existing channel members (i.e. distributors). (b) Replacing the existing distributors by new distributors. (c) Setting up the company s own selling and service network. (d) Multi-channel marketing To have an effective channel system which would meet customer needs of effective aftersales and debugging services, so as to maintain the leadership position analysis. It is clear from the major findings of the market survey that the existing distributors are not satisfying the company objectives. Hence, the various options are analyzed:

a) In improved management of existing distributors, the company would discuss expectations, customers perceptions, and other issues with the existing distributors. They would work towards a unified system, called vertical marketing system (VMS). But it will take a long-time to change the negative perceptions of some customers about the existing distributors. b) In this alternative, there is no guarantee that new distributors would be better than existing distributors. After all, the company has achieved no. 1 position in terms of market share with the efforts of the existing distributors. Hence, a drastic change of replacing the existing distributors is not at all necessary. c) Setting up the company s own sales and service network would be a highly costly and time consuming proposition. The company does not have any competency in the area of software and hardware support system. Hence, like alternatives (a) and (b), this alternative may not achieve the objective stated earlier. d) In multi-channel marketing, different channels would serve different market segments, depending on customer needs.

Solution 2: Destructive channel conflict is managed through economics and structural controls. Economics motivate the channels to avoid conflict. Structural controls lay the ground rules within which conflict is managed. With each tactic, communication before conflict arises is critical. The right economic solution is dictated by the type of conflict being faced, the manufacturer's market and channel position, and the company's strategic goals. Economic approaches include; Dual compensation applied when conflict exists between direct and indirect channels. The goal is to move the indirect channel from a position of potential adversary for the direct sales force to one of "partner" for the direct sales force. Activity based compensation or discount used to manage cross-channel conflict or conflict between channels of differing cost structures and capabilities. Activity based discounts are applied by paying a channel a specific discount if it performs a measurable task or function. These discounts allow the "high-cost" channel to compete against "low-cost" channels for those customers who value the high support. Shared costs the key difference between this concept and functional discounts is that functional discounts compensate the channel for incremental tasks via a discount on product sold, while shared costs pay directly for the task. Compensation for market share usually applied to direct versus indirect conflict, the direct sales rep is compensated based on total market share in a territory. The goals of the sales rep are based on direct and indirect volume, thus motivating the direct rep to "partner" with indirect channels to maximize territory volume. Structural controls are only as effective as their enforcement. There is no value unless you are willing to clearly spell out the controls at the outset of the channel agreement and enforce the stated penalties to all channel members. The structural controls are typically applied to: Accounts you specify "named" or "house" accounts where indirect channels can expect to compete with your direct channels. Named accounts are usually specified based on end-user sourcing capabilities, channel ability to meet end-user buying requirements, and volume and strategic value. Products channels can qualify for franchising by product line/category across your company's offering. Product qualification is usually based on end-user product support needs, channel support capabilities, "fit" or positioning of the product category in the channel's overall business, and strategic considerations.

Geography as a manufacturer, you can specify those geographies/account types in which you will provide sales support to the channel. These geographies are usually defined by granting the channel a primary area of responsibility. The successful marketer combines the elements of economic and control-related solutions that best address conflict challenges framing them in an understanding of market position, channel position, and strategic goals.