B2B- VL1

• Sales Management involves the design of the channel system and the management of the sales channels.
• Channel Design examines the organization of the distribution channel system and the rationale for having intermediaries such as sales force agents, distributors, wholesalers, and retailers.
• Channel Management examines how channel systems can be managed once they are in place.
• The course provides examples for contextual differences in service output demand levels, such as family versus office employee.
• The course also explores the concept of Service Outputs, including six core services of a sales channel: Bulk-breaking, Spatial convenience, Waiting or delivery time, Product variety, Customer service, and Information provision.
• The course also discusses the performance implications of designing multiple channels to fit with strategy and environment.
• The Performance Implications of Designing Multiple Channels to Fit with Strategy and Environment is a course taught by Professor Dirk Totzek during the Winter Term 2023/2024.
• Transaction costs can incur before the contract formation (ex ante transaction costs) as well as after the contract formation (ex post transaction costs).
• Processing costs include management costs for coordination and leadership, settlement costs, and others.
• Reasons for the emergence of transaction costs include initiation costs such as search costs, travel expenses, communication costs, consulting fees, and others.
• Adaptation costs include amendments, interim appraisal, redefinition of objectives, and others.
• Agreement costs include the costs of negotiation, legal consultation, coordination costs, and others.
• Control costs include monitoring, enforcement of the convention, and others.
• A Distribution/Sales Channel is a set of businesses that facilitates the movement of goods and services from the point of production to the point of sale to the customer.
• Nike uses a multi-channel system with consumer direct sales via the internet, indirect sales via online dealers, and offline dealers such as Foot locker.
• Depth of the Sales System refers to the number of direct sales channels.
• Opportunities of multi-channel systems include higher market coverage, increased sales potential, and fulfillment of different needs.
• Differentiated multi-channel system is the most common type of multi-channel system, with 17.24% of companies using it.
• Depth of the Sales System (3) refers to the number of indirect sales channels.
• Sales Channel Expansion (1) involves literature review.
• Risks of multi-channel systems include confusion of the customer, loss of control, and sub optimization.
• The majority of B2B companies employ indirect sales channels and even almost 90% of the companies are using multi-channel sales systems.
• Travelling sales representatives are a type of office-based sales representatives.
• Sales force orientation has shifted from short-term seller needs to short-term customer and buyer needs.
• Sales strategy should align with business strategy and include elements such as customer strategy.
• Sales strategy is the broad principles by which the firm expects to achieve its sales objectives for its target market.
• Critical tasks of salespeople include taking orders, delivering goods, convincing buyers to buy products, matching available offerings to buyer needs, and creating new alternatives by matching buyer needs and seller capabilities.
• The role of a salesperson is provider, persuader, problem solver, and value creator.
• A sales strategy matched with the business and marketing strategy enhances effectiveness and has a superior effect on business performance.
• Activities of salespeople include informing customers, influencing customers, adapting to customers, building and maintaining relationships, and providing value.
• The role of a salesperson has evolved from making sales to satisfying customer needs, building relationships, and creating value.
• Business strategy defines the long-term plan of action a company may pursue to achieve its goals.
• Marketing strategy is the broad principles by which the business unit expects to achieve its marketing objectives in a target market.
• Indirect distribution offers effectiveness of marketing through assortment formation, area-wide market presence, efficiency gains through demand pooling, and avoidance of high capital requirements but lacks the benefits of customer retention, access to market information, decision latitude and flexibility in market cultivation and independence from dealers.
• Under monopoly, profit is $16 on 4 units at a retail price of $8 and a marginal cost of $4.
• Direct distribution offers the possibility of customer retention, access to market information, decision latitude and flexibility in market cultivation, independence from dealers, area-wide market presence, efficiency gains through demand pooling, and avoidance of high capital requirements.
• Collusion could be implemented by a contract specifying a maximum resale price, which may or may not be legal under antitrust laws.
• Everyone is worse off under Double Marginalization, with consumers losing $12 on 2 units at a retail price of $10 and a marginal cost of $4.
• Two-Part Tariffs involve the wholesaler setting the wholesale price at marginal cost to maximize the size of industry profits and then using the franchise fee to capture the bulk of this additional value created.
• The length of the sales system is determined by the product category.