Engr 245 Session 05 Channel

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Engineering 245The Lean Launch Pad<br />Session 5: Channels<br />Professors Steve Blank, Ann Miura-Ko, Jon Feiber<br />htt...

Channels<br />How does each customer segment want to be reached?<br />Through which interaction points?<br />1<br />

Test Hypotheses: Channel<br />2<br />

Two Critical Questions about Channels<br />First one is obvious: How do you want to sell your product?<br />3<br />1<br />...

How Do You Want to Sell Your Product?<br />Yourself<br />Through someone else<br />Retail<br />Wholesale<br />Bundled with...

How Does Your Customer Want to Buy Your Product?<br />Same day<br />Delivered and installed<br />Downloaded<br />Bundled w...

Nature of Product Impacts Channel: Atoms or Bits?<br />Access to customers changes dramatically<br />Logistics related to ...

The Sales “Channel”<br />7<br />Web<br />System Integrators<br />Your Company<br />Your Customers<br />Direct Sales Force<...

Types of Channels<br />OEM<br />VAR<br />Reseller<br />Distributor<br />8<br />Direct<br />Indirect<br />Licensing<br />

The Channel as a Customer<br />Some products are embedded in others (OEM)<br />Some products are resold by others (VARs)<b...

Distribution Complexity<br />10<br />Evangelists<br />Global Systems<br />Systems Integrators<br />WANs<br />Mainframes<b...

How Are Channels Compensated?<br />Commission<br />Percentage of sales price<br />Discounted pre-purchase<br />11<br />

How Are Channels Motivated or Incented?<br />Money! – what makes them the most?<br />Training<br />Marketing to the channe...

Channel Economics: “Direct” Sales<br />13<br />ListPrice<br />Revenue<br />Cost of Goods(Supply Chain)<br />Profit + SG&A ...

Channel Economics: Resellers<br />14<br />ListPrice<br />Revenue<br />Cost of Goods(Supply Chain)<br />Profit + SG&A + R&D...

Cost of Goods(Supply Chain)<br />Profit + SG&A + R&D<br />Channel Economics: Distributors/Resellers<br />15<br />ListPrice...

Channel Economics: OEM or IP Licensing<br />16<br />ListPrice<br />Revenue<br />EU Discounts<br />Reseller<br />Distributo...

Example: Book Publishing<br />17<br />Publisher<br />National Distributor<br />Printer<br />Wholesaler<br />Retailer<br />...

Book Publishing<br />18<br />Publisher<br />National Wholesaler<br />Distributor<br />Retailer<br />Customer<br />Percent ...

Book Publishing Economics<br />19<br />Publisher<br />National Distributor<br />Wholesaler<br />Retailer<br />Customer<br ...

Book Publishing Delivery<br />20<br />Publisher<br />National Distributor<br />Printer<br />Wholesaler<br />Retailer<br />...

Print orders

Bundle counts

Film</li></ul>Merchandise titles<br />Determine allocations<br />Sell magazines<br />Deliver orders<br /><ul><li>Establish...

Create demand</li></ul>Prepare galleys<br />Print and ship magazines<br />Acknowledge returns<br />Dispose of returns<br />

Bits vs. Atoms<br />21<br />Channel<br />Web<br />Physical<br />Bits<br />Product<br />Physical<br />

Product and Channel Are Bits<br />22<br />Channel<br />Web<br />Physical<br /><ul><li>Rapid Agile and Customer development

Fastest to acquire early customers and scale</li></ul>Bits<br />Product<br />Physical<br />

Web 2.0 – Product and Channel Are Bits<br />23<br />Channel<br />Web<br />Physical<br /><ul><li>Google

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