1. Server Distribution Channel & Strategy By DilipAlavane -2009E02 Dhiraj Surana -2009E12 KirshnakantPandey -2009E25

2. Agenda Server Manufacturing Process Distribution Strategy Channels of Distribution. Indirect Distribution. Direct Distribution. Measuring Channel Performance

3. Server Manufacturing Process

4. Distribution Strategy Selective Distribution It’s distribution of a product through only a limited number of channels and markets. Reduces total distribution cost so that net profits are higher and often induces company’s rule for advertising, pricing and displaying. Cooperative advertising can also be utilized for mutual benefit. Focused effort

5. Customers MANUFACTURER RESELLER DISTRIBUTOR VAR OEM’s ISV’s

6. Channel Function Reseller Pursue Volume based Business Model. Extends manufacturer’s reach in the market Provides directly to end-user with service Stock inventory Rapid and convenient delivery. Aggressively solicit new accounts. Ex: Data Care Corp., BitScan, Eletech MANUFACTURER RESELLER DISTRIBUTOR VAR OEM’s ISV’s

7. MANUFACTURER RESELLER Other Distributor and / or Customer DISTRIBUTOR VAR OEM’s ISV’s Distributor Supply to corporate resellers and other distributors. Carry large quantities of different products, to increase their leverage when dealing with their customers. Provide specific software, peripherals, etc, as well as service. e.g. Ingram Micro, Tech Data, Computer 2000, and Santech .

8. VAR’s (Value Added Resellers) Focus entirely on designing ,developing , and delivering complete business problem solutions to end users. Solution may include hardware ,software and services. Completely customizing the solution to the needs of the customer. Also known as System Integrators from hardware’s perspective , specialized in selling and integrating the product for complex solutions Companies that combine computer components to build a complete system. Eg SI : Cisco, Symantec NetBackup Series Ex: Infowrold,Informatica, Innovative Interfaces, Unisys. MANUFACTURER RESELLER Other Distributor and / or Customer DISTRIBUTOR VAR OEM’s ISV’s

9. MANUFACTURER RESELLER Other Distributor and / or Customer DISTRIBUTOR VAR OEM’s ISV’s OEM’s Refers to companies that make products of there own using manufactrer’s component in it , for others to repackage and sell Imbedding manufacturer’s products into large systems. Manufacturer’s component represents a small portion of the total product Ex: Blade Server Chasis , MTS Systems, Mango DSP

10. MANUFACTURER RESELLER Other Distributor and / or Customer DISTRIBUTOR VAR OEM’s ISV’s Source of Application Solutions and does not directly sell hardware paltforms. They influence end users purchasing behaviour by recommending such platforms. Ex: Wipro, Oracle, Microsoft , Novell, Redhat etc. ISV’s

14. Extremely low inventories.

15. Rapid response to customer changes.

16. Strong relationship with customers and suppliers.

17. bringing new products to market quickly, enabling it to increase

18. High market share and achieve high returns on investment.

19. direct sales and build-to-orderLimited audience (not everyone has it or will use it for shopping) Lack of one-to-one interaction, impersonal Cannot touch, feel, products, concerns about colors, not tangible Fear of fraud, ID theft, security Weakness of Direct model

20. Strengths of indirect model Very wide distribution, size, exposure, volume, Product availability Delivery Performance. Ease of Doing Business. Expertise Focused customer base, Broad network Can offer bundled pricing Carry our inventory, cost sharing Offers aggressive marketing, upsell opportunity. Can offer personal consumer assistance, service Don’t know end-user No control of product presentation Limited product focus Unmanageable; have own agenda Very independent, difficult to control No direct customer contact by you If they leave, you lose the customer They also represent others—focus is limited Less loyalty Weakness of Indirect model

21. 14 Measuringchannelperformance Channel Performance measures Efficiency Effectiveness Equity

23. Stimulation of demand: What are the efforts made by the channel member to increase customer base or increase the usage of the product.Equity : Extent to which “channel serves problem ridden markets and market segments”. Eg: disadvantaged or geographically isolated consumers. Efficiency:Output / Input Productivity : The efficiency with which the output is generated from the resources and inputs. Operational efficiency.

25. Cost ,

27. (b) Corporate Profitability Channel segmentation Direct channel Indirect channel Territory segmentation East West East West A B C A B C A B C A B C Product segmentation (b)Segmentation analysis by channel, territory and product category

29. Direct selling cost

30. Indirect selling cost

31. Advertising

32. Sales promotion

33. Transportation

34. Storage and shipment