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NEWS RELEASE
For Immediate ReleaseKaren Franse, 803.289.7048
kfranse@gtdc.org
Kavita May, 813.968.5937
kmay@gtdc.org
Past Chairmen Kent Foster, Steve Raymund Remain On Executive Committee
GTDC VENDOR SUMMIT, SAN FRANCISCO, Calif., Sept. 27, 2005 – The Global Technology Distribution Council (GTDC) announced today the findings of an intensive, three-year study of channel relationships between vendors and Value-added resellers (VARs) within the IT distribution channel. Primary findings of the study suggest motivations and insight on how solution providers choose to do business with IT manufacturers.
Findings from the study, co-sponsored by the GTDC and the Marketing Sciences Institute (MSI), were presented at the annual GTDC Vendor Summit, a top-tier gathering of IT channel executives held Sept. 14 and 15 in San Francisco. The preliminary research shows that solution providers, when working with IT vendors, go through a complex evaluation process before deciding how much support to put behind a vendor’s brand. More specifically, resellers consider three main factors: compensation for performance, the fairness of the relationship and vendor’s program, and the extent the vendor’s products and services “fit” the strategic direction of the reseller. Each of these three or “facets of channel program evaluation” has independent effects on reseller attitudes and behaviors.
“The GTDC is bringing new insight and thinking to the leaders within the IT Channel,” said Tim Curran, chief executive officer, Global Technology Distribution Council. “This research will allow all of us to develop more successful channel engagements and programs. Money isn’t always the main motivator; in fact, it can produce the wrong results. Vendors can use the three facets of channel program evaluation to carefully craft channel programs that not only pay for performance, but are seen as fair and a good fit with how the VAR wants to go to market.”
The data showed that the channel program evaluation process often produces unintended outcomes for the vendors, such as conflict and reseller deception. For instance, it was found that high levels of monetary compensation not only motivated a reseller’s level of effort and loyalty to any given program, it also tended to create additional conflict. VARs motivated only by compensation may walk away from the bigger picture of their business direction and goals, and only follow the money. Furthermore, the study shows us that money doesn’t necessarily produce higher satisfaction levels with end-users,” Curran continued.
The study was conducted by Steve Kim of Oregon State University and Dave Gilliland of Colorado State University, marketing professors that study channels of distribution issues. The study was conducted under academic research method standards. This included minimizing error rates through extensive background research, strong sampling techniques, pre-testing all final survey items, screening respondents, and using highly reliable measurement scales.
About The Global Technology Distribution Council
The Global Technology Distribution Council (GTDC) is a worldwide industry association dedicated to defining and promoting the role of wholesale distribution in a successful and healthy information technology channel. The Council is comprised of the computer industry’s top wholesale distributors dedicated to serving “the channel,” a network of skilled value-added resellers and retail stores focused on providing hardware, software, and services to businesses and consumers around the globe.
About MSI
MSI, a marketing think-tank based in Cambridge, MA, is a collaboration between many of the nation’s leading companies and the marketing academic community. MSI sets and funds research to advance knowledge of important and relevant marketing phenomena.