Design and Selection of Industrial Marketing Channels A case study at Alfa-Laval

ABSTRACT Today most companies do not sell their goods directly to the final user. Instead many of the tasks which include distribution activities such as transportation and storage, but also marketing activities such as selling and pricing are undertaken by a variety of external intermediaries. The choice and control of these intermediaries we call marketing channel management. Marketing channels, also called a trade channel or a distribution channel, are these interdependent organizations involved in the process of marketing a product or services available to end users.Today most companies do not sell their goods directly to the final user. Instead many of the tasks which include distribution activities such as transportation and storage, but also marketing activities such as selling and pricing are undertaken by a variety of external intermediaries. The choice and control of these intermediaries we call marketing channel management. Marketing channels, also called a trade channel or a distribution channel, are these interdependent organizations involved in the process of marketing a product or services available to end users. The research purpose of this master thesis is “How can a large Swedish company within an industrial market, develop and design reliable marketing channels for a new product under development in the area of sales and marketing.” To answer this research purpose several relevant theories and models were used. However, these theories are difficult to use in their full extent. Hence, in order to obtain a proper focus in this research thesis, a frame of reference was developed to define and demarcate the problem area. The channel design model used to select and develop a new marketing channel, in the frame of reference, is based on the model presented by Rosenbloom (1995). The conclusive evaluation of the model for design of market channel structure, presented in the frame of reference by Rosenbloom (1995), is that it’s a straightforward and very comprehensive theory for design of marketing channel structures. However, the method is quite complex and therefore could be refurbished to be more “user-friendly” and simplified for daily managerial use. Regarding this thesis work, it is interesting to notice that a “new“ finding emerged, not previously mentioned in theory. Present theories, within the area of marketing channel; states that a need for channel design decision is based on the fact that an existing new product or product-line might need a new marketing channel. This because, a new existing product might not fit existing marketing channels, within the company of concern. In this case however, the respondent had a suspicion that a future potential marketing channel could contribute to and provide assistance in the development phase of a new product. In other words it could be possible to gain market knowledge, which later on could to be transformed to future product specification, through new marketing channels that are already well established within the market segment.