P

op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
Channel Management

op
y
o
po
s t
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
op
y
o
po
s t
 Learning Objectives

ts
po
o
y
op
tc
• Role of private labels.

no
do
ah
• Conditions for using different distribution strategies.

Bo
sh
ka
• Channel power and conflict.

Bi
av
u
So
so
es
of
P
of
ty
e
op
P
 Private Labels

ts
po
• To Retailers

o
y
op
• High Profit Margins

tc
no
• Increase in Bargaining Power

do
ah
• Differentiation

Bo
• Store Loyalty

sh
ka
Bi
• Attract Price Sensitive and Deal Prone Customers

av
u
• To Manufacturer
So
so

• Capacity Utilization
es
of

• Target Price Sensitive Customers

P
of

• Competitive advantage.
ty
e
op

• Cannibalization.
P

• Category Schema
 Distribution Strategies Decisions

t
Broad Distribution Selective Distribution Exclusive Distribution

s
po
o
y
op
tc
no
Convenience Goods Shopping Goods Luxury and speciality Goods

do
(Low Effort, Low Risk)

ah
Bo
sh
High purchase frequency Occasional Rare Occasions

ka
Bi
av
u
So
so
Impulsive/Unplanned purchase Planned Purchases Planned Purchases.
es
of
P
of
ty
e

Low Dealer Loyalty High Dealer Loyalty. Best for Dealer Loyalty.
op
P
 Channel Power and Conflicts

ts
po
o
y
op
tc
no
do
• Vertical and Horizontal

ah
Bo
sh
ka
Bi
• Multichannel Conflict

av
u
So
so
es
of
P
of
ty
e
op
P
 Horizontal Conflict

ts
po
o
y
op
tc
• One appliance manufacturer.

no
do
• Four lines: Fan, Lights, Domestic Appliances and Kitchen Appliances.

ah
Bo
sh
ka
• Problem

Bi
av
• Dumping (Bill today sell tomorrow)

u
• Area Infiltration So
so

• Pricing (selling at lower prices)

es
of
P
of
ty

• Major problem is scheme variations.

e
op
P
 Solution

ts
po
o
y
op
tc
• Reduce number of company owned dealers.

no
do
ah
• Remove all schemes. Same prices for all.

Bo
sh
ka
Bi
• Reduce inventory to only 15 days.

av
u
So
so

• One distributor sells all products.

es
of
P
of
ty

• Reach retailers.
e
op
P
Mobile Handset Distribution in Western India (Vertical Conflict)

ts
po
o
y
op
•

tc
Company

no
• National Distributors (A large national distributor).

do
ah
• Market developers

Bo
• Retailers

sh
ka
Bi
av
• Retailers are of three types
u
• Multi-brand (Single vs. Chain Stores) So
so

• Single Brand
es
of
P
of

• Solution: Xiaomi (Going directly to consumers).

ty
e
op
P
 Learning Objectives

ts
po
o
y
op
tc
• Selecting Appropriate Channels.

no
•

do
Channel Conflict and alignment.

ah
• Double Marginalization Problem.

Bo
• Common Agent Problem.

sh
ka
• Omni Channel Distribution.

Bi
av
u
So
so
es
of
P
of
ty
e
op
P
 Selecting Appropriate Channels

t
s
po
Short Channel Long Channel

o
y
op
Business Users Consumers

tc
no
do
Geographically Concentrated Geographically Diverse

ah
Bo
Market Factors

sh
Extensive Technical Knowledge and Little Technical Knowledge and Regular

ka
Regular Servicing Required Servicing Required

Bi
av
u
So
so Perishable Durable
es

Product Factors
Complex Standardized
of
P
of
ty

Expensive Inexpensive
e
op
P
 Short Channel Long Channel

ts
po
o
y
op
Manufacturer has adequate resources to Manufacturer lacks adequate resources to

tc
perform channel functions. perform channel functions.

no
do
ah
Bo
Product Factors

sh
ka
Bi
av
u
So
Channel control important.
so Channel control not important.
es
of
P
of
ty
e
op
P
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
op
Aligning Channel Interest

y
o
po
s t
Revenue Sharing.
 Possible Solutions

ts
po
o
y
op
tc
no
do
• Revenue Sharing

ah
Bo
sh
ka
• Competition among retailers.

Bi
av
u
So
• Suggested retail price.
so
es
of
P
of

• Franchising.
ty
e
op
P
 Franchising vs. Company Owned

ts
po
o
• Resource constraint (Weak Explanation)

y
op
tc
• Local knowledge

no
do
• Principle agent problem (Vertical Agency)

ah
Franchisees do not shirk (i.e., reduce effort) because their income is tied to their effort.

Bo
sh
Employee managers, in contrast, will shirk because they do not possess strong ownership

ka
incentives (Rubin, 1978).

Bi
av
• But create horizontal agency problem

u
• Free riding So
so
es

• Solutions: Include both discrete and relational terms in a contract.

of
P
of

• Relational contracts include more dispute resolution items such as (a) annual meetings
ty

of franchisees, (b) a franchise council, (c) a franchise association, (d) arbitration, and
e
op

(e) advertising committees (Leblebici & Shalley, 1996).

P
 Service Channel- A Deal Breaker

ts
po
o
y
op
tc
• Morgan Stanley (S&P 500 Index Fund)

no
do
Load: 5.25%

ah
Bo
Annual Fees: 0.73%

sh
ka
Bi
av
u
• Vanguard (S&P 500 Index Fund) So
so

Load: 0%
es
of
P

Annual Fees: 0.18%

of
ty
e
op
P
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
op
Common Agent Problem

y
o
po
s t
 How to Deal With Common Agent Problem?

ts
po
o
y
op
tc
no
do
ah
Bo
• Microsoft Solution.

sh
ka
Bi
av
u
So
• Direct to Consumer Advertising (Intel inside).
so
es
of
P
of
ty
e
op
P
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Recap

Bo
ah
do
no
tc
op
y
o
po
s t
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
Salesforce Management

op
y
o
po
s t
 Learning Objectives

ts
po
o
y
op
tc
no
do
• How to identify your best salesperson.

ah
• Salesperson Turnover

Bo
sh
• How to Motivate your salesperson.

ka
•

Bi
Incentivizing your Salesforce.

av
• Ratcheting Effect

u
So
so
es
of
P
of
ty
e
op
P
 How Difficult is Sales?

ts
po
o
y
op
tc
no
do
• Globally 37% of the salespeople are consistently effective.

ah
Bo
sh
ka
• 9.1% of sales meeting results in Sales.

Bi
av
u
So
• 1 out of 250 meet or exceed their targets.
so
es
of
P
of

(Reference: Lynette and Iain 2010)

ty
e
op
P
 Identifying your Best Salesperson

t
Closers (13%) (Big

s
po
Experts (9%) Consultants (15%)
Deal Pullers)

o
y
op
tc
Dos

no
Dos Dos

do
1.Salespitch
1.Salespitch 1.Salespitch

ah
2.Outperform Peers 2.Outperform Peers

Bo
2.Outperform Peers
3.Rapport

sh
3.Company 3.Rapport

ka
4.Customer
4.Customer

Bi
Representation
Interactions

av
4.Rapport Interactions

u
So
5.Rising to the
Don’ts
so
Don’ts Challenge
es

1.Storytelling
1.Storytelling
of

(-)
P

Don’ts
of

1.Company
ty

(-) 1.Storytelling
e

Representation
op

1.Customer (-)
2.Rising to the
P

Interactions 1.Company
Representation Challenge
2.Rising to Challenge
 The Rest

t
Socializers

s
Narrators

po
Storytellers (7%) Aggressors (7%) Focusers (19%)
(15%) (15%)

o
y
op
tc
no
do
ah
Bo
Are customer

sh
ka
focused and love to

Bi
provide case

av
Attribute Focused Focus on Overly

u
studies, but they
often “talk through
Approach sales So not customer customer dependent
so
meetings purely as focused. interaction on scripts.
es

the sale” and waste

price negotiations.
of

time in long rather than

P
of

meetings that don't sales.

ty
e

yield results.
op
P
 Salesperson Turnover (Courtesy : Prof. V Kumar)

ts
po
Relative Past

o
Own Effect Performance

y
op
(-)

tc
no
do
Customer

ah
Probability of
Satisfaction

Bo
(-) Salesperson

sh
Turnover

ka
Bi
av
Goal Realization

u
So
so
es
of
P

Peer Turnover
of
ty

(+)
e
op

Variance of Peer
P

Peer Effect
Performance
(-)
 Motivating Salesperson (It Depends)

st
po
o
y
op
tc
no
do
Exploration Stage Establishment Stage Maintenance Stage Disengagement Stage

ah
(Difficult to Motivate) (Difficult to Motivate)

Bo
sh
ka
Bi
av
u
So
Increase in Pay Promotions
so Promotions Formal Recognition
es

Leadership Behaviour Personal Growth Formal Recognition

of
P

Personal Growth Formal Recognition

of
ty
e

Formal Recognition
op
P
 Research Findings

ts
po
o
y
op
tc
• Commissions generally is more effective if there is a smoother sales

no
pattern.

do
ah
Bo
sh
ka
Bi
av
• Bonus Scheme does better if salespeople has to perform more diverse
u
So
task rather than immediate short term goals (visiting non users).
so
es
of
P
of
ty
e
op
P
 Challenge

ts
po
o
y
op
tc
no
do
• Company U is in the business of app based taxi service.

ah
Bo
sh
• The company adopts a bonus based structure.

ka
Bi
av
u
• You do x trips you get y, you do x+k trips you get Y+l
So
so
es
of

• Can you foresee a problem?

P
of
ty
e
op
P
 Ratcheting Effect

ts
po
o
y
op
tc
• “Incentive ratcheting can be defined as the practice of setting next

no
period goals, piece rates or any other key incentive parameter based on

do
ah
current-period performance” (Brahm and Poblete 2018).

Bo
sh
ka
Bi
• Based on such systems, salesperson may strategically game the system

av
u
and only achieve quotas but not exceed them.
So
so
es
of
P
of
ty
e
op
P
 ts
po
o
y
op
tc
no
Mathewson (1931): “I have learned through sad experience that the more

do
ah
your superiors find they can get out of you the more they come to expect.

Bo
The only way to protect yourself is never to work at anything like full

sh
ka
capacity. I know that most restriction is due to the worker’s desire to save

Bi
av
and protect herself and not to any other motive” (p. 65).
u
So
so
es

Ratcheting make salespeople immune to monetary incentives and

of
P

reduce productivity.
of
ty
e
op
P
 Who Reduces Effort?

ts
po
o
• Geographically cities where market share is higher and loyalty is high

y
op
salesperson ratchet (Brahm and Poblete 2018).

tc
no
do
• Experienced salespeople ratchet more (Brahm and Poblete 2018).

ah
Bo
sh
ka
How do you address this problem? (Chung, Steenburgh and Sudhir 2014)

Bi
• Quotas based not on an individual’s performance but on the performance of a larger

av
group of sales-people,

u
So
so
• Overachievement commissions and cumulative annual quotas (Specially for high
es

performers)
of
P
of

• Quarterly bonuses (low performers)

ty
e
op
P
 Recap

ts
po
o
y
op
tc
• Role of private labels.

no
do
ah
• Conditions for using different distribution strategies.

Bo
sh
ka
• Channel power and conflict.

Bi
av
u
• Salesforce Management So
so

• How to identify your best salesperson.

es
of

• Salesperson Turnover
P
of

• How to Motivate your salesperson.

ty

• Incentivizing your Salesforce.

e
op
P
 Omni Channel Distribution

ts
po
o
y
op
tc
no
do
ah
Bo
“We are not opening stores because we want them to be big sales centres.

sh
It is a great way to do branding for us and to provide the touch-and-feel

ka
Bi
experience to consumers. In future, stores can also help us deliver products

av
u
faster to (online) consumers.” Ananth Narayanan, CEO Myntra.
So
so
es
of
P
of
ty

Courtesy: Economic Times

e
op
P
 Pepperfry

ts
po
o
y
op
tc
no
do
“Before making any purchase, the consumer would do a lot of

ah
research and consulting with friends and family. Through the

Bo
studio, we enter into the consumer journey early, where they can

sh
ka
see and feel the products. The store doesn’t have salesmen but

Bi
av
interior designers who help the customers (to) make the right choice,”
u
So
Ashish Shah, co-founder and chief operating officer, Pepperfry, said
so

in an interview.
es
of
P
of
ty

Courtesy: Mint
e
op
P
 Four Major Questions

ts
po
o
y
op
tc
• What happens when online retailers shift offline and vice versa?

no
do
ah
Bo
• How consumers behaviour may change across channels?

sh
ka
Bi
av
• Should the assortment be similar across channel?
u
So
so
es
of

• Should you eliminate channels?

P
of
ty
e
op
P
 Omni Channel Distribution (Courtesy: Koen Pauwels and Scott Neslin)
• Should online retailer add offline channel?

ts
po
• Positives

o
y
op
• Cross Selling

tc
no
• Targeting Non-users.

do
ah
Bo
• Negatives

sh
• Cannibalize online sales,

ka
Bi
• Integration challenges across channels reducing trust in the brand,

av
u
• Local competition.
So
so
• Offline to Online
es
of

• Reduce Cost,
P

• Increase accessibility,
of
ty

• But also increase risk because loss of touch and feel.

e
op

• Return (Higher in online as product uncertainty has not been completely mitigated).
P

• Virtual showrooms reduce uncertainty for online consumers.

P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Bo
ah
do
no
tc
op
y
o
po
s t
 Omni-Channel Consumer Behaviour (Li et al. 2015)

t
s
po
o
y
op
tc
no
Innovators Early Adopters Early Majority Late Majority Laggards

do
(2.5%) (13.5%) (34%) (34%) (16%)

ah
Bo
Technological Opinion Leaders Pragmatic Risk Averse May not Switch at

sh
Enthusiast all

ka
Bi
av
u
So
so
1. Late majority only switch a portion of their purchases online.
es

2. However, early adopters and early majority tend to buy more.

of
P
of
ty
e
op
P
 Full Integration or Partial Integration or No Integration (Umut

ts
po
Konus, Scott Nelsin and Peter Verhoef)

o
y
op
tc
no
do
• Full integration

ah
• Reduces Perceived Risk.

Bo
sh
• Increase Perceived Variety.

ka
Bi
• Increase Perceived Convenience.

av
u
So
so
es
of
P
of
ty
e
op
P
 Channel Elimination

ts
po
o
y
op
tc
• Ryanair in Europe closed airport desk check in.

no
do
ah
• Myntra in India moved from Website to App.

Bo
sh
ka
Bi
• Effect of Channel Elimination

av
u
• Elimination of channel loss in revenue.
So
so
• No wear-out effects even after 2 years.
es
of
P
of
ty
e
op
P
 Mobile Commerce

t
s
po
o
y
op
tc
• A mobile device is different from a desktop on three basic dimensions – screen size, ubiquity, and

no
touch screen (Shankar and Balasubramanian, 2009; Wang et al., 2019).

do
ah
• A smaller screen size of mobile makes it a comparatively inefficient navigation tool (Lee, and

Bo
Benbasat, 2004).

sh
ka
Bi
• Ubiquity (or mobility), on the other hand, gives an edge and a clear distinction to mobile devices over

av
traditional channels (Okazaki and Mendez, 2003). Providing both - convenience and accessibility - a

u
mobile phone provides easier access to online content and spans much fewer constraints of time and
space as compared to a PC. So
so
es
of

• Touch makes for the third dimension of distinction. A touchscreen feature is almost universal for
P

mobile phones (78% of world population used a smartphone in 2020). The feature of touch not only
of

induces higher shopping engagement for a consumer (Chung, Kramer and Wong, 2018), but also leads
ty

to endowment effect through psychological ownership (Brasel and Gips, 2014).

e
op
P
 Mobile Apps

ts
po
o
y
op
tc
no
do
• App Downloads

ah
Bo
• Larger File Size has negative effect on app download

sh
• Number of screenshots have a positive effect on app download

ka
Bi
• Volume and valence of reviews have a positive effect on app download

av
u
• Ranking in different app stores has a positive effect on app download
• So
Contextual quality, content quality and device quality have a positive effect on app
so
es

download and usage.

of
P

• Freemium model is a common way to attract customers.

of
ty
e
op
P
 Where does App help?

ts
po
o
y
op
tc
no
do
• Personalization

ah
Bo
sh
• Affective Targeting: Geotargeting, Targeting consumers in competitors location with

ka
Bi
discount is more effective than targeting in their own location.

av
u
So
so
• Predictions
es
of
P
of
ty
e
op
P
 App Bounce Rate

ts
po
o
y
op
tc
• Slow loading speed

no
do
ah
Bo
• Navigation issues

sh
ka
Bi
av
• Substandard UI/UX
u
So
so
es
of

• Distracting Content
P
of
ty
e
op
P
 Learnings

ts
po
o
y
op
tc
• Role of private labels.

no
do
• Conditions for using different distribution strategies.

ah
Bo
sh
• Channel power and conflict.

ka
Bi
av
• Salesforce Management

u
So
so
• Channel Alignment
es
of
P

• Emerging issues in channels.

of
ty
e
op

• Mobile Commerce
P
 Integrating Two Modules (Strategic and Operational Insights)

ts
po
COMPANY CUSTOMER COMPETITION CONTEXT

o
y
(Political, Economic, Legal,

op
(Developing (Segment based on (Direct vs. COLLABORATORS

tc
Competencies) benefits) Indirect) Cultural, Technological )

no
do
ah
Bo
Dominion Motors GTM

sh
Hot Wheels HP SONOS

ka
Household Product Goodyear

Bi
Limited

av
Growing Markets (Mature Market:
Cooper

u
and Declining Increase Synergies across
Products So
consumption
Channel Selection and
Product, Price
so
NPD Process Management
1. Retention is occasions, Line and Distribution
es

1. Avoid Salesforce
of

more important) Extensions). ECOSYSTEM

Management
P

Behavioural 2. FMA) Declining Market BASED

of

Change 3. Winners Take All (Loss Leader, PERSPECTIVE

ty
e

4. No product is a Market Leaders

op

commodity make money)

P

VALUE CREATION AND VALUE DELIVERY STRATEGIES

 Urgent (require immediate attention) Not Urgent

t
s
po
o
y
op
Important The Operational Activist The Strategist

tc
no
(Fire Fighters)

do
ah
Bo
sh
ka
Bi
av
u
So
so
es
of
P
of
ty
e
op

Unimportant Meeting Goers Time Waster

P
P
op
e
ty
of
P
of
es
so
So
u
av
Bi
ka
sh
Thanks

Bo
ah
do
no
tc
op
y
o
po
s t