1

Value Chain“Ecosystem”

“Product Positioning, Pricing & Costing”

Two Critical Channel Questions

2

How do you want to sell your product?1

is subtle, but more important than the first: How does your customer want to buy your product?

2

How Do You Want Your Product to Get to Your

Customer?

3

Yourself

Through someone else

Retail

Wholesale

Bundled with other goods or services

üüüüü

How Does Your Customer Want to Buy Your Product

from your Channel?

4

• Same day

• Delivered and installed

• Downloaded

• Bundled with other products

• As a service

• …

üüüüüü

For You?

What Does This Mean?

5

Wino’s• Do you sell your product direct?• Is your product bundled with

other products?• Is your product a component of a

bigger product?• Is your product licensed?

• How do customers/prospects want to buy it? 6

Questions

Easygene• Do you sell your product direct?• Is your product bundled with

other products?• Is your product a component of a

bigger product?• Is your product licensed?

• How do customers/prospects want to buy it? 7

Questions

Lignin• Do you sell your product direct?• Is your product bundled with

other products?• Is your product a component of a

bigger product?• Is your product licensed?

• How do customers/prospects want to buy it? 8

Questions

Ecoli?• Do you sell your product direct to

a user?• Is your product bundled with

other products?• Is your product a component of a

bigger product?• Is your product licensed?

• How do customers/prospects want to buy it?

9

Questions

Tait• Direct to “end user”?• Via naturopath store?• Via “name brand”?• Via “expert testimonial”?

– For what specific segment?

• How do customers/prospects want to buy it?

10

Questions

Examples• http://www.slideshare.net/sblank/p

resentation-examples-for-class-5-distribution-channels

11

Value Chain

12

13

Direct to End User

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsList PriceRevenue - Actual Price

Value Chain

14

Resellers

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsList Price

Revenue - Actual Price

ResellerProfit

Value Chain

15

Distributors/Resellers

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsList Price

Revenue - Actual Price

ResellerProfit

Distributor

Value Chain

16

International Distributors

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsList Price

Revenue - Actual Price

ResellerProfit

DistributorMaster Disti

Value Chain

17

OEM or IP LicensingList Price

Revenue - Actual Price Cost of Goods(Supply Chain)

Profit + SG&A + R&D

Discounts

ResellerProfit

DistributorMaster Disti OEM/IP Product is part of

your customers COGs

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsResellerProfitDistributorMaster Disti

Value Chain

18

OEM or IP LicensingList Price

Revenue - Actual Price Cost of Goods(Supply Chain)

Profit + SG&A + R&D

Discounts

ResellerProfit

DistributorMaster Disti

This stack replicates(like a fractal

… looks the same at each level)

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsResellerProfitDistributorMaster Disti

Cost of Goods(Supply Chain)

Profit + SG&A + R&D

DiscountsResellerProfitDistributorMaster Disti

Value Chain

19Excerpt from Reading: “Who Captures Value in a Global Innovation System? The case of Apple's iPod”

Value Chain

20Excerpt from Reading: “Who Captures Value in a Global Innovation System? The case of Apple's iPod”

Value Chain

Distribution Complexity

21

Evangelists

ServiceTechnicians

Higher Value Added

Higher Volume Direct Sales

VARs

Retail

Web, Telesales

Systems Integrators

Mainframes

MinisLANs

PC ServersDesktop PCs

PrintersKeyboards

Toner

WANs

Global Systems

Solution Complexity

Mar

ketin

g C

ompl

exity