Channel Management B2B Marketing
The report analyzes the case studies of Lotus Development Corporation, Aqualisa Quartz Shower and Atlantic Computer. The report defines the problem statements and identifies the alternatives in the case, and the report provides recommendations to assist the companies to make effective decisions. The Lotus was facing challenges whether to discontinue with its distributor and dealers and use its saleforce to deal directly with its corporate users. The report recommends that the Director of Sales Operations should continue using its distributor and dealers; however, the company should use its saleforce to deal directly with corporate users demanding for direct services.
However, the report recommends that the Harry Rawlinson (HBS) should use 2 or 3 minutes TV ads to demonstrate the innovation leap of Aqualisa Quartz Shower. The promotion strategy will assist the company to enjoy the sales advantages from the Aqualisa Quartz Shower. In the third case, the report recommends that the company should use cost-plus pricing approach to fix the new pricing.
Lotus Development Corporation Case
Lotus Sales Corporation is well-known for its development of a spreadsheet package Lotus 1-2-3, which dominated the software market in 1980s. In 1985, Lotus was a clear leader in the computer industry with sales of $225 Million, followed by Ashton-Tate and Microsoft with sales of $100 million to $125 million respectively. In 1980s, the Lotus was able to achieve powerful sales using its distributors and dealers. Thus, the company offered extensive training to its dealers using promotion called “Dealer Demo Days” to achieve powerful sales in the market.
The case Lotus “Channel Choice: Direct vs. Distribution” discusses the preoccupation of Director of Sales Operations of Lotus Development Corporation, John Shagoury on the decision whether to bypass the company distributor and dealers and deal directly with saleforces in order to sell the company products to large corporate users. While the decision has some benefits, there are still several shortcomings associated to deal directly with salesforces. Shagoury attempted to make this radical decision because the company sophisticated corporate buyers were starting to demand for direct servicing. However, the buying trends in the industry made this decision very difficult to implement. (Harvard Business School, 1994).
The paper analyzes the alternatives facing Shagoury in order to make effective decision on Direct vs. Distribution.
A list of alternatives
In 1980s, Lotus relied on its distributors and dealers to make major sales and in 1985; the company realized 47% of its sales through its distributor, who later sold to retail dealers authorized by Lotus. Typically, approximately 70% of large and medium businesses buy directly from distributors and dealers making Lotus to enjoy several benefits:
First, the company was able to sell large quantity of its stock through dealers and distributors since the distributors always had product in stocks, and this assisted the company products to reach retailers and corporate clients. With the sales assistance from dealer and distributor, the company net income was $14.3 Million in 1983, $36 Million in 1984 and $38.1 Million in 1985.
In 1986, the Lotus sale force consisted of 90 personnel and they included account representatives (reps) and systems engineers. However, 75 of sale personnel handled sales responsibilities while other 15 personnel served as technical consultant to potential buyers. Formerly, Lotus 1-2-3 were sold through distributor and dealers and as industry evolved, dealers were competing with Lotus’s salesforce. However, in 1984, the company discontinued with saleforce because of the pressure from the company’s dealers and distributors.
With growth of the industry, corporate users were increasingly demanding for direct sale services from the company, and increasing number of companies were requesting for direct delivery from the company locations. Although, Lotus managers were aware of recent changes in the market trends, however, they were helpless because company’s distribution logistics were not geared towards distributing small lots since Lotus preferred dispatching its product in large batch in pallet loads of 500 units. John Shagoury believed that with the changes in the market trends, the sale force would be better serving the corporate users than using distributors and dealers since largest percentage of Lotus users were corporate organizations.
This report recommends that Lotus Development Corporation should continue using distributors and dealer. However, the company should develop a small unit of saleforces to cater for the corporate users insisting for direct sale services. Radical switching from distributor and dealers to the company Saleforce at this time could totally jeopardize the company market advantages because the company did not have enough Saleforce to serve the entire corporate user. The company should also consider the costs of switching radically from distributors to the Saleforce. The company will incur the costs of recruiting more Saleforce. Moreover, the company will also incur the cost of training. Additionally, the company would need to re-plan its distribution logistic systems to sell in smaller batch, and the implementation costs might be enormous.
Aqualisa Quartz Shower Case
Harry Rawlinson (HBS) had just launched the Aqualisa Quartz shower, which was the first significant product innovation in the UK shower market. Despite that Quartz shower was a technological leap and was a bound above other showers in the UK market, however, the company was not achieving market advantages from the product despite that the product was a technological leap in term of ease of installation, use, water pressure and design. However, the company was facing challenges to choose an appropriate market strategy that could assist the company record high market sales from Aqualisa Quartz shower. ( Moon, 2006).
The paper recommends an appropriate market strategy that could assist the company to record sales for the new product. Analysis of the alternatives assists in providing an appropriate solution for the company
A list of alternatives
The UK shower market consisted electric showers, mixed shower valves and integral power showers. Electric shower instantaneously heat cold water supply from the tap water. Electric shower also eliminates the needs for boiler and it is convenient for small bathroom. On the other hand, mixed shower consisted of manual and thermostatic use blended hot and cold water to create a comfortable temperature. The Aquavalve 609 was one of the companies that produced electric shower, and plumbers regarded it as a top quality and having a reliable mix shower with state-of-art technology. A unit price was generally between â‚¬675 and â‚¬750.
However, Integral power shower combined booster pump and a thermostatic mixer valve that delivered 18 liters blended water per minute. The Aquastream Thermostatic was a primary Aqualisa’s product in this category with price of â‚¬670, and the company recorded a sale of 20,000 units per year.
Generally, the channel of distribution of the UK showers consisted of trade shops, show room, Do-it-yourself and (DIY) retail outlets. Despite the various types of showers available in the UK market, the shower manufacturers lacked innovation and ingenuities in the shower deign. The Harry Rawlinson (HBS) attempted to fill this gap by introducing the Aqualisa Quartz shower in the UK market. The Aqualisa Quartz shower integrated the electronic devices that mixed water remotely away from the shower. The system also integrated maximum pressure and convenient water temperature at 41Â° [Celsius]. With Quartz technology, the temperature was controlled automatically. Despite â‚¬5.8 million spent to complete the project, the Aqualisa Quartz shower was not recording sales. The company projected a sale of between 100 and 200 a day. However, the company recorded the actual sales of between 30 and 40 units a day. To boost the sales of the Aqualisa Quartz shower, the sales manager proposed different sales strategies, which include:
Targeting Consumers Directly
The report recommends that the company should use the option of targeting customer directly. The print ads that company was implementing were not an appropriate advertising technique that the company should use for a product such as Aqualisa Quartz shower. The company should use the combination of TV and print ads. Virtually all households in the UK has at least one television, and the company should subscribe to two or three minutes TV ads to demonstrate the ease of installation, use, water pressure and design quality of Aqualisa Quartz. Using this promotion strategy, the customer all over the UK would gradually switch from other showers to Aqualisa Quartz shower. The major reason that made the company not recording sales was that people and plumbers had already developed negative attitudes towards electronic showers. To change these attitudes, the company will need to provide “3 or 6-Month Money Back Guarantee” in case the product damages after 3 or 6 months. The strategy will assist the company to increase the sales of Aqualisa Quartz shower.
Atlantic Computer Case
Atlantic Computer was a large company specializing in manufacturing of servers, and the company just manufactured a new server, which was specifically suited for the U.S. emerging marketplace. Jason Jowers, a young MBA graduate was assigned the responsibility of fixing the pricing for the new product.
The challenge facing the company is the ability to fix the right price for the product in order to achieve a market success and not to lose market to the competitors. Although, the Atlantic Computer was the largest player in the computer industry with 30-year of selling high quality servers, however, the company was facing a stiff competition from Ontario Computer. Typically, Ontario Computer focused its market effort on low-end server market. Unlike Atlantic Computer, majority of Ontario Computer’s sales were generated online, and overview of Ontario business model reveals that the company focused on operational excellence.
A list of alternatives
Jason Jowers contemplated on different pricing decision, and the first strategy was to identify “an exemplary customer from the most viable segment in discussing his proposed pricing strategy.” (Sharadwaj, Gordon, 2007, P 3). Thus, Jason considered the following pricing strategies:
The report recommends that the company should charge price based on cost-plus approach. This approach is the best pricing strategy that the company should employ. Essentially, the company was the largest player in the computer server in the UK. Moreover, the company had already developed the brand advantages over its product. Since the industry norm was to give away software for all the hardware sold, the company should use the cost-plus pricing to determine the pricing strategy. However, the company will need to reduce the cost of software development. Typically, the company spent approximately $2,000,000 on software development. The company should use a trusted external software developer to develop the software needed for the hardware. Using this strategy, the company will be able to decline the costs of software development. The data in the Table and the graphs below revealed that the company was already enjoying product development advantages over Ontario Computer since Ontario Computer was unable to develop high performance computer. The customer would not be able to switch to another company with the new pricing of Atlantic Computer since the company was already enjoy monopoly in some of its product.
Cost Information (Per Server)
Electricity (Annual Costs)
Costs of Software Application Licenses
Number Labor per Server
High Performance Server
Price Per Server
Cost Per Server
Tronn (Basic )
Rada (High Performances)
Harvard Business School (1994).Lotus Development Corporation Channel Choice: Direct vs. Distribution. Harvard Business School Publishing, Boston.
Moon, Y. (2006). Aqualisa Quartz: Simply a Better Shower. Harvard Business School Publishing, Boston.
Sharadwaj, N. Gordon, J.B. (2007). Atlantic Computer: A Bundle of Pricing Option. Harvard Business School Publishing, Boston.
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY!!!
We provide professional writing services to help you score straight A’s by submitting custom written assignments that mirror your guidelines.
Get result-oriented writing and never worry about grades anymore. We follow the highest quality standards to make sure that you get perfect assignments.
Our writers have experience in dealing with papers of every educational level. You can surely rely on the expertise of our qualified professionals.
Your deadline is our threshold for success and we take it very seriously. We make sure you receive your papers before your predefined time.
Someone from our customer support team is always here to respond to your questions. So, hit us up if you have got any ambiguity or concern.
Sit back and relax while we help you out with writing your papers. We have an ultimate policy for keeping your personal and order-related details a secret.
We assure you that your document will be thoroughly checked for plagiarism and grammatical errors as we use highly authentic and licit sources.
Still reluctant about placing an order? Our 100% Moneyback Guarantee backs you up on rare occasions where you aren’t satisfied with the writing.
You don’t have to wait for an update for hours; you can track the progress of your order any time you want. We share the status after each step.
Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.
Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.
From brainstorming your paper's outline to perfecting its grammar, we perform every step carefully to make your paper worthy of A grade.
Hire your preferred writer anytime. Simply specify if you want your preferred expert to write your paper and we’ll make that happen.
Get an elaborate and authentic grammar check report with your work to have the grammar goodness sealed in your document.
You can purchase this feature if you want our writers to sum up your paper in the form of a concise and well-articulated summary.
You don’t have to worry about plagiarism anymore. Get a plagiarism report to certify the uniqueness of your work.
Join us for the best experience while seeking writing assistance in your college life. A good grade is all you need to boost up your academic excellence and we are all about it.
We create perfect papers according to the guidelines.
We seamlessly edit out errors from your papers.
We thoroughly read your final draft to identify errors.
Work with ultimate peace of mind because we ensure that your academic work is our responsibility and your grades are a top concern for us!
Dedication. Quality. Commitment. Punctuality
Here is what we have achieved so far. These numbers are evidence that we go the extra mile to make your college journey successful.
We have the most intuitive and minimalistic process so that you can easily place an order. Just follow a few steps to unlock success.
We understand your guidelines first before delivering any writing service. You can discuss your writing needs and we will have them evaluated by our dedicated team.
We write your papers in a standardized way. We complete your work in such a way that it turns out to be a perfect description of your guidelines.
We promise you excellent grades and academic excellence that you always longed for. Our writers stay in touch with you via email.