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    Alternative Channel Distribution

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    I am needing assistance with the below task. I understand the basic concept alternative channels as there are agents, wholesalers, basically channel intermediaries which are between you (the business) and your customer which assist in product/service delivery. However, where I am having difficulty/struggling is this is primarily a service oriented company thus I am unsure which alternative distribution channel would be best suited or even fit into the situation. I would think it would be the internet as it would increase opportunity to reach a wider target market, initial setup would be low and availability to track delivery (or schedules/transactions/sales in this case I would think) would be increased due to the technology. But as with anything in business or personal alike increased dependency on technology (internet) could also have its drawbacks/disadvantages. There could increased dependency which could hinder I would think possibly creativity and customer orientation. But I am unsure what form of what is referred to as channel conflict other than these there could be which could be aided by a channel captain or if one is even needed. As per my course information "channel members can be independent entities with individual goals and profit objectives, it is not unusual for channel conflict to arise. Channel conflict can be resolved with the right incentives and motivations. Channel members have to meet the overall channel goals and objectives, and their performance is reviewed periodically." However, with utilization of the internet - where does this conflict fit in - how does this fall in place - what goals/profit objectives - possibly agents which are assisting in selling the service or taking the order for services in other locations?? Sorry I am just confused and in need of assistance.
    And how does this knowledge help in applied marketing management decisions? Is it because it allows you to make more strategic decisions based upon the customer and organization needs, deliver a quicker and more customer focused product and decrease budgetary spending for the organization?


    You have just been hired as the new Marketing Manager at ITO Company. ITO(or Information Technology Outsourcing)is a five year old, US$10 million company, with 100 employees. The company outsources its full-time information technology professionals who may work at clients' sites, from regional offices or from the company's Chicago headquarters.

    You are excited about this new job since this is your first management position, having come from a large marketing department in an architectural/engineering/construction professional services company. While you performed a wide variety of marketing functions in your old position, you never set marketing strategy nor were you in a position of management there. You feel challenged to meet ITO's corporate goals.

    While you are comfortable marketing services, you recognize the difficulty in marketing in a sluggish economy, considering how heavy the competition is, particularly from Canada and India, which offers well-educated and well-trained information technology professionals at prices well below ITO's costs.


    Besides selling directly to the end user, how could ITO use distribution channels to sell its services and grow its business? How long do you think it would take to set up these distribution channels and when could ITO expect to see revenue from these distribution channels? Why did you feel it would take this long and why would it be worth the effort? Use the Internet to research how similar companies sell their services. In addition, how do overseas firms who provide IT outsourcing services sell their services to U.S. companies, especially when they are located so far away? What distribution channels do they use and do these distribution channels differ from U.S. IT outsourcing companies and why? Be sure to prioritize your recommendations.

    This can be an interesting and creative task. I trust your insight and creativity and believe you will deliver an exemplary product in the provided timeframe. I just ask that the information that is pulled from outside sources not be excessive and be quoted according to APA guidelines both in text and end of paper. It should be a task compiled from inner creativity, knowledge and backed up with references and facts. Please avoid paraphrasing too much throughout the paper. It should be one that showcases your own knowledge, creativity and writing skills coupled with references and facts. You should showcase your knowledge and skill but support it with proper research and facts. Please also refrain from utilizing Wikipedia as it is not an accepted source by the institution and check spelling, grammar, content, flow as well as verify all information is property cited both in text and end of paper according to APA format.

    Thank you for your assistance on this task.

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    Solution Preview

    Besides selling directly to the end user, how could ITO use distribution channels to sell its services and grow its business?

    The internet will be an important distribution channel for the company to market its services. ITO should implement an effective web marketing campaign by using tools such as Search Engine Optimization (SEO) to popularize its services. Such tools will attract more and more visitors to the company's web portal in the sense that it will allow the company's portal to appear in first few search results, whenever target customers will search the internet for outsourced service providers.

    However, the internet distribution channel will not be appropriate to attract large clients as such clients are chased by a large number of companies, especially large IT outsourcing service providers from India, thus making it necessary for such companies to invite bids from such service providers. In order to tap this market, ITO will need to appoint sales agents or representatives to tackle various industry groups. For example, ITO can appoint individual agents for each industry, like banking, FMCG, pharmaceuticals, Retail, etc. These sales representatives or agents will keep a close eye of the upcoming contracts in their respective industries and will work closely with the company's staff to bid for such contracts. The remuneration of such agents will be a combination of fixed salary plus incentives, with incentives ...

    Solution Summary

    Alternative Channel Distribution