{"id":87850,"date":"2009-12-02T00:03:46","date_gmt":"2009-12-01T14:11:37","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/companies-take-different-approaches-in-distribution-chain\/"},"modified":"2026-08-19T14:47:14","modified_gmt":"2026-08-19T06:47:14","slug":"companies-take-different-approaches-in-distribution-chain","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/companies-take-different-approaches-in-distribution-chain\/","title":{"rendered":"Companies Take Different Approaches in Distribution Chain"},"content":{"rendered":"

There is more to marketing a product<\/b> than simple sales strategy. Marketing is a defining trait of a company, and one that often makes it stand out from its competitors. Examples of this abound in all industries. In the telecoms sector, a company such as Taiwan\u2019s HTC Corp. managed to grow into one of the largest handset manufacturers in the world while remaining virtually unknown to the general public for years. Only recently did it decide to move away from being purely an outsourcing company and become a player that targets its own branded products to the mass market. On the other hand, in an area such as consumer electronics, retail strategies for brown goods are extremely sophisticated and often might appear, at first sight, to be contradictory. Companies such as Apple, Samsung, Panasonic and Sony, for example, rely on a network of their own branded outlets competing with retail shops in which their products are sold alongside those of other brands. Online sales strategies, of course, further complicate this diverse sales market.<\/p>\n

Within the technology sector the relationship between companies and their clients can be intricate. There are market players, for example, that tend to expand vertically the range of products and services they offer. In many cases, however, companies choose deliberately to occupy a limited portion of the value chain, focusing on core competencies and leaving other aspects of the business to partners or resellers. In particular, the use of distributors and resellers is a well-established business practice in highly-technical industries in which specialization is key to success. The satellite industry is no exception, though resellers and distributors are, to a certain extent, limited by the nature and size of the industry itself. \u201cDistributors in the satellite industry are relatively undersized compared to other industries because there is not enough equipment in the marketplace to sustain them,\u201d says Dean Griffler, senior vice president of global sales, iDirect.<\/p>\n

The marketing methods chosen by satellite companies are far from universal, however, as each company has its own approach depending on history, market niche and geographical area in which it operates. In a global, vertically-expanded market such as satellite, this comes as no surprise.<\/p>\n

 <\/p>\n

Common Partnerships<\/h2>\n

While the relationship between companies and their partners does not follow a single blueprint, the fact that the use of resellers is a common industry practice is evidence of the fact that their contribution is believed to be beneficial for the industry. Some market players, such as iDirect, even go so far as to rely completely on resellers in their business model. \u201cIn 2001, when we restarted our business, we took a radical approach. We decided to sell off our service provision business and focus completely on selling our equipment to various forms of resellers in the marketplace. Naturally, when we took such a decision we also committed to support them fully,\u201d says Griffler. iDirect currently relies on three classes of resellers: network operators or service providers, virtual network operators, and typical resellers. \u201cThe core of our business is represented by network operators or service providers. These are entities that might have a hub in their teleport and purchase remote equipment from us to fulfill the orders they receive from their customers,\u201d explains Griffler.<\/p>\n

Virtual network operators, on the other hand, are customer-facing companies that rely on host network operators for the RF part of their business. Large satellite operators, such as Intelsat, partner with many of these large virtual network operators around the world. From a distribution point of view, virtual network operators have what amounts to a reseller contract with iDirect. Finally, typical resellers, i.e., companies that act as a straightforward point of distribution for a company\u2019s products, make up iDirect\u2019s third category of business partners. \u201cThis used to be a central part of our business, but we are defocusing from it,\u201d says Griffler.<\/p>\n

Other companies have taken a different approach to their sales network and operations. Germany\u2019s ND SatCom, a supplier of satellite-based broadband VSAT, broadcast and defense communication network solutions, has chosen to adopt a two-pronged approach. It has a direct presence in the marketplace alongside that of their resellers. While ND SatCom can take advantage of a global network of offices in Germany, the United States, Canada, Mexico, the United Arab Emirates, China and Singapore to provide sales and technical support to its customers and partners in the regions, the company still relies on a long list of regional resellers. \u201cAlthough we have done the majority of our business directly with customers, we prefer to work through local partners and sales channels,\u201d says Karl-Heinz Weltz, director of sales for ND SatCom\u2019s Europe & Africa division. \u201cWe are about to launch a new partnership program to intensify our business with certified partners.\u201d Local knowledge and the possibility to have a regionalized support network are often cited as among the most important reasons that for a company to go to market through resellers. \u201cWe see many benefits in cooperating with local partners, as they bring significant value to the business such as local content and applications, installations and services,\u201d he says.<\/p>\n

Above all, resellers are seen as playing an important role in today\u2019s marketplace in that they add value to products and services \u2014 value-added resellers (VARs). As a neutral technical service provider, European satellite operator SES Astra looks at resellers as strategic allies. \u201cWe believe that resellers can add value to our fleet by offering a number of value-added services such as ingesting customer content, grooming and consolidation of SD and HD content into bouquets, multiplexing, encryption and SMS services, uplinking, fiber backhauling\/contribution, investing and operating IP\/data networks, and various other services,\u201d says Eddy Frankland, vice president and general manager, enterprise solutions, SES Astra.<\/p>\n

This view is echoed by most market operators, however, for companies such as iDirect, often there are other elements that come into the equation: namely the fact that partnerships with non-exclusive resellers stimulate competition in the marketplace. \u201cWe give every single one of our network operators the opportunity to participate,\u201d says Griffler. \u201cOur partners know that we do not participate in the business, and the advantages of this approach are several-fold: One is the fact that our network operators really come to trust us, because they know we are not going to take away the cream \u2014 i.e., the better deals. \u2026 Another advantage that I see in having resellers is that it forces us to train our partners really well so that they can be self-sustaining. We bring a level of education to the marketplace,\u201d he says.<\/p>\n

This is a view shared in the marketplace. \u201cResellers increase competition and provide customers with a diversity of choice which is always good for customers,\u201d says Frankland. But whatever the approach to market, be it through the use of exclusive or non-exclusive resellers, all players seem to agree that a key ingredient for the success of all business models is the fact that resellers should be supported, even if a direct sales model is still retained. \u201cFrom a customer\u2019s point of view, direct contact with the equipment supplier may be preferred,\u201d Weltz says. \u201cThis is why we apply a direct touch sales model, which ensures that ND SatCom\u2019s expertise supports customers as well as partners in the best way,\u201d he adds.<\/p>\n

 <\/p>\n

Close Relations<\/h2>\n

While many resellers consist of external companies that do business with a number of suppliers, it would be wrong to assume that this is a universal rule. Spin-off companies, subsidiaries or entities somehow affiliated to their suppliers also are relatively common in the marketplace. The case of European satellite operator SES Astra is a case in point. Within SES Astra, the responsibility for resellers falls into the Enterprise unit \u2014 one of the company\u2019s three vertical units alongside the Media unit and the Government and Institutions unit. In order to be able to address specific needs beyond satellite capacity, SES Astra relies on service companies such as Astra Broadband Services for satellite broadband; Astra Platform Service for playout and content management services; HD+ for HDTV technical services in Germany; and SES Astra TechCom for satellite consultancy services. You also have systems integrator and hardware manufacturer ND SatCom to add to that mix. \u201cThe service companies extend the range of services offered by SES Astra and provide integrated solutions to broadcast and telecommunications markets for media, enterprise and government segments,\u201d says Frankland. The regionalization of operations also is an important element in SES Astra\u2019s strategy. With offices in London, Munich, Madrid, Paris, Rome, Warsaw, Stockholm and Moscow, the company also has a strong local presence. \u201cOur in-country sales teams are local experts who are our eyes and ears in the regional markets. Many of our pre-sales and marketing activities are initiated through these regional offices and sales teams,\u201d he says.<\/p>\n

 <\/p>\n

Opposing Viewpoint<\/h2>\n

How do resellers see themselves and their role in the market? \u201cOperators such as Inmarsat, Iridium and Intelsat depend upon Stratos to quickly ascertain and fulfill customer requirements via the deployment of our value-added services,\u201d says Ian Canning, vice president, marketing and product management for Stratos Global Corp. \u201cThey also depend upon us to anticipate future customer needs and continually invest in new value-added services that meet those needs.\u201d One of the key tasks a reseller should perform is to keep a pulse on the market, trying to meet and possibly anticipate customers\u2019 requirements. \u201cTo maintain our high level of innovation, we employ some of the industry\u2019s brightest product managers, engineers and [information technology specialists at offices worldwide,\u201d says Canning. Through frequent summits and informal meetings, our teams keep abreast of how our services are meeting the complex networking requirements of our customers.\u201d<\/p>\n

One of their major concerns is cost savings. \u201cAs our customers in the maritime, land-mobile and aero sectors evaluate the latest mobile broadband satellite services from Inmarsat, Iridium and other operators, they are already convinced that the new systems can improve the performance of their business-critical applications. Their chief concerns involve efficient use of available bandwidth, monitoring costs and minimizing unnecessary usage. To address these concerns, Stratos offers a suite of value-added services that enable customers to attain the highest possible performance and support from their communications networks, at the lowest possible cost,\u201d he says.<\/p>\n

There are also risks associated with such a choice. First, a possible conflict of interests among players: How do those companies that also sell to customers avoid competing with their reseller networks? Weltz offers a glimpse of what is needed to harmonize strategies. \u201cWe ensure avoiding channel conflicts by establishing measures such as clear assignment of markets, segments and territories,\u201d he says. The second issue is how can quality of service be guaranteed to the end user in an environment where resellers enjoy widespread freedom? The answers here are less clear-cut. \u201cWe can work with those who have issues. We can try to help them. We are very committed to our partner base. That\u2019s the lifeblood of our business and we recognize that, but my sense is that over time, the cream is going to rise to the top, and that those people who are offering bad service will eventually go out of business,\u201d says Griffler. \u201cBut the one thing I am not going to do is try to guess who\u2019s going to be a good network operator and who\u2019s not,\u201d he says.<\/p>\n

In other words, for those who believe in the market, resellers should vie for business trying to differentiate from their competitors, and it is the market that should assess quality. \u201cWe never do exclusives in a market or in a vertical. Our partners should have to compete, differentiating their offering in the market based on service quality and not the fact that they have iDirect equipment,\u201d says Griffler.<\/p>\n

Differentiation and quality of service is key, and companies pursue that in different ways. \u201cWe routinely put our prospects in touch with customers who have successfully deployed The Stratos Advantage suite of value-added services,\u201d says Canning. \u201cThese testimonials help prospects understand how Stratos provides a granular level of customer support on a daily basis.\u201d<\/p>\n

But above all there is nothing like competition to stimulate an environment where only those who can deliver value for money to meet their customers\u2019 needs will be able to thrive.<\/p>\n

\n\"\"<\/p>\n

Giovanni Verlini is a communication executive and freelance journalist based in Europe. Email: giovanniverlini@hotmail.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

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