chapter 5

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<strong>chapter</strong> 5 · a concept of the future 133generation, leaving not enough time for tendering important prospects;• Once the company call centre relayed a request for a tender to one of the resellers,all direct contact with the end customer was lost. The company Internetplatform could have been used to maintain a link with these customers;• Similarly, the website was used primarily for lead generation, but it assumedno role of importance further down the customer process chain.Optimizing and exploiting a channel structure is not accomplished overnight.The company must adapt the channel structure to its offering, integrate thechannel design into its business model, anticipate and deal with channel conflict,and finally balance market coverage and channel control. 31 The globalisationof markets complicates matters still further. The r&d manager of aninternational food ingredients company, with multiple subsidiaries in Europeand North America, was highly critical about its efforts for Pan-European marketing:‘Our only true Pan-European products are American products.’ Differencesbetween countries not only have a major impact on product customisationbut also on channel strategy. For instance, the mode of retailing differsFigure 5.4 · Go-to-Market Map© rudy moenaert, henry robben, peter gouw, lannoocampus • marketing strategy & organization
134 marketing strategy & organizationsubstantially across Europe (Figure 5.5). This has major implications for bothmanufacturers and retailers. The dominant Western mode of retailing (hypermarkets,supermarkets, discounters) is in its infancy in much of Central andEastern Europe. In Russia, for instance, 35% of the total market value of fastmoving consumer goods is sold through small grocery shops, and a further25% through street vendors and open markets.In addition, there is the real danger of value migration towards the channels.In an optimal setting, the internal, external and interactive marketing efforts ofa company match harmoniously. Channel partnering creates important opportunities.However, it also involves three risks (Figure 5.6):© rudy moenaert, henry robben, peter gouw, lannoocampus • marketing strategy & organization• Risk of inconsistency: The customer expects a consistent offering. ‘Three iscompany, two is none,’ according to Oscar Wilde. When suppliers join forces,it becomes more difficult to offer a consistent value proposition to the endcustomer;• Risk of competence leakage: the interactions between the personnel of thecompany and the personnel of the channel partner may result in the leakageof competences (e.g., factual knowledge about key customers, proceduralknowledge about business routines);• Risk of appropriability loss: A critical question in any go-to-market strategy isthe issue of end customer ownership: does the manufacturer or the distributorown the end customer? The distribution channel is consistently receivingmore space and power in the value chain. 32 One of the results of the slugfestsbetween manufacturers and retailers for mindspace and shelfspace has beenthe many private labels launched by retail companies. 33 Manufacturers, inresponse, seek to arm themselves. For instance, it is said that the conditionsnegotiated by Wal-Mart with its suppliers form one of the key reasons for theacquisition of Gillette by Procter & Gamble.Figure 5.5 · Value Market Shares of Selected Retail Channels for Fast Moving Consumer Goods (2005)(Source of data: GfK)
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chapter 5

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