CHANNEL BASICS
50
level of intensity and at what cost, helps channel
managers design channel sys-
tems that provide targeted segments with the exact level of service outputs they
demand, at the lowest cost.
SIDEBAR 2.1
CDW and PC Purchases by Small- and Medium-Sized Business Buyers:
Channel Functions and Equity Principle Insights
8
The success of CDW (cdw.com), a $15-billion, multi-brand technology solutions provider,
lies in
serving small- and medium-sized business customers with a superior provision of service outputs.
Its ability to do so rests on its strategic performance of key channel functions, in a more efficient
(lower-cost) and effective (better at producing service outputs) manner than other channel part-
ners can. Key channel
functions for CDW include physical possession,
promotion,
negotiation,
financing, and
risk. In addition, CDW offers flexibility to its buyers;
not all buyers are required
to pay for or solicit all of the functions that CDW offers. Instead, CDW provides differentiated
function “packages” to the market, through one overall channel structure.
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