Case Study...Changing Channels
Gateway Computers was founded with a $10,000 loan by Theordore Waitt on his parents' Iowa farm in 1985. It grew to become a or computer producer, selling directly to consumers over the phone and on the Web. After aquiring eManchines, a low-end PC company, early in 2004, Gateway was the number three PC producer in the USA.
In 1996, Gateway became the first "brick-and-clicks" computer seller (with both online sales and its own stores). There were over 300 Gateway stires where consumers could order computers for delivery.
The Wrong Channel?
Company stores were never profitable, and in April 2004 Gateway closed all its stores, returning to phone and Web-based sales. eManchines had been available at other retail outlets, including Best Buy, and Gateway expanded into that channel for its own branded computers and consumer electronics.
Part of being a direct distributor is developing an especially close relationship with customers. Selling Gateway products in third party retail outlets will affect the control the company has over that relationship, but there is a trade-off in terms of a wider market for Gateway.
In a two paragraph response, answer the following questions. In paragraph # 1, discuss the reasons can a direct distributor have to open a brick-and-mortar or brick-and-clicks operations? In paragraph # 2, discuss the direct distribution methods of Apple? Do you think they do a good job? Why or why not?
Please sign your name to the bottom of your blog entry.
18 comments:
A reason a direct distributor would open a brick and mortar company might be to cut down on labor costs. If they already have a method of distrubution then they don't have to pay for a new labor cost because they already have supplied their need.
Gateway has used online stores as their main way to attract customers. This effects their distrubtuon methods because they don't have to spend extra money to send products to a store. Instead, they can ship it directly to the consumer and it costs less for them.
-Shannon Riley
One reason why a company would open a brick and mortar store is because they could find sucess with it. The store could also be a distributor. When someone orders something online or by phone, they could ship it from the nearest store (which is also a distributor now). The reason for opening a brick-and-clicks operation would be to expand even more. It would make it easier for customers to purchase their goods from somewhere other than a store or by phone.
-David Chung
a direct distributor opens a brick and mortar company so they can save money. They have various ways to sell the products with out the need to pay extra for extra workers or a store.
Apple sells there products over internet and stores, even there own store. Theyre doing a very good job with there selling methods and i belive theyre making money.
Edgar E. Ochoa
They need to open these operations for the same reasons any company wants to get promotions. To get things sold, in this case computers. I haven't heard much about these operations, so I wouldn't know. Seeing as they are the first computer seller, I feel they should be successful in distributing operations.
I feel apple does a good job at ditributing operations, because they have many different products to sell. Mac has many items and stores for direct distribution. They distribute from the manufacturer to the consumer, without middlemen.
Chris Lynn
Opening brick and mortar and brick and clicks would be good because it would expand the company more. When you have your own brick and mortar stores it makes your brand more known and makes it becomes more popular. And the same goes for bricks and clicks.
I think Apple's direct distribution is good because it costs less distributing to other retails and more time focusing on selling their products. And with their direct distribution their workers have more knowledge about their product than retail store workers.
- Habba Babba! Dai Dai Dai Daiiiii
A direct distributor might want to reach out to people who doesn't live near to any branches of their store. The store might want to display more information about a product where an employee can not provide. In some sites, companies can customize a customer's order.
I think that Apple does a very good job in direct distribution because they don't have to pay any one in between and just goes right to their stores. It doesn't cost them much as other companies who has to go through the middlemen or wholesalers.
-Melareve G.
2nd paragraph from David Chung
Apple's own stores are pretty successful and well run. They obviously sell a lot each year and the iPod has become an icon of America. They actually make products cheaper by using direct distrubution by selling according to wholesale price, as opposed to suggested retail price.
-David Chung
Direct distributors would open up a brick and mortar buisiness because it would reduce the amount of money they have to spend on things. Then they could use that money for other extra things.
Gateway uses their online stores as an easy access for customers who have shifted gears toward the new era and shop online. That way, they cut down even more money and sent it to the customer directly. After that it's all gravy baby.
-Emmett
One reason that a direct distributor might open a brick and mortar or brick and clicks operation is to save money. This way, the distributor doesn't have extra expenses like shipping costs to stores and other things like that. Also, they ultimately make a great connection/realtionship with the consumer.
Apple uses some good methods when it comes to direct distribution. They sell their products online, while also maintaining stores. These are good methods because people like to buy things online, while others like to physically go to and see products.
-Jair Pasaye Lopez
A "brick-and-clicks" store would probally mean success for them causing the company to expand.
I believe since the Apple store is doing a pretty good both job both online and in their own store ; since they have computers, music devices and even cellphones . They are expanding their business in a way that people know -which is technology. Technology has become a big part of society.
Gateway use the computers to access their internet website so they can post things on there that the consumers can buy online OR can only get from online and nowhere else.
-Yessica Salamanca.
A business will have to open a brick-and-mortar or brick-or-click business if the customers want to try out the product. For example, a clothing store would have to have a physical so the customers can try on the clothes. Also, it would be more convenient for customers. Other stores such as Starbucks and Dunkin Donuts would never be able to sell many products without a physical store.
Apple makes and sells their own products, cutting out the cost of the "middle man" and gaining more profit. I believe Apple does a good job of directly distributing their products because the customers are still able to buy the latest iPods and laptops as they would with any other corporation. Also, the Apple stores are well-stocked with products and even have items on display for the customers to test.
The reasons the direct distributors have to open brick-and-mortar operations is because they may feel that they need a new way to cut down on labor costs.
I think Apple does a good job in some specific areas and in other areas they may be slacking off. I dont really know if they have come up with ways to attract new customers,, while Gateway has come up with online stores to attract new customers,which is helping them to get sales because the consumer can order it and doesnt really have to pay for anything extra.
----RaShara Toney---
Companies have a brick and mortar businaesses becasue it is very safe to have both just in case one fails.An example of a brick and mortat company would wal-mart, this is a brick and mortar company because they have a actual store and an online store. Also having brick and mortar operations is good for customers because maybe they dont want to go into store to buy their products.
I think that direct distribution methids of apple are very good because they just sell their products to the customer and dont have to sell it to a store to sell it to customers. Also they have stores so they dont have to giveit to best buy ofr example.
TARIQ MASOUD
When a company is a direct distributor it helps to be a brick and mortar. It helps because it allows the company to have business with this ewho many not be able to go into a store. They are buying straight from the company they want.
Apple is one company that does a good job with being a direct distributor. Apple is a very well liked and trusted company. They uses both the interent and stores to help sells. If they were not doing a good job then they would have the business they do.
The direct distribution metods of apple is selling their products to their customers by the internet and when they buy the Apple products from the stores, ect. I think hat they do a good job because the customers end up satisfied and get their products in a way they have time too.
sandra coreas
I think a direct distributor has to open a brick and motar.So many people can go online and search in the internet to buy the items. It will expand the company more and the company could have a better profit.
I think apple does do a good job distributing items. The workers can have a good knowledge about what the people think than the retailers do.
A reason a direct distributor can have to open a birck-and-motar is to cut down costs and save money. They could have things done in faster way and cheaper ways instead of hiring more people.
Apple does a really good job with direct distribution because they follow out with their goal. They make their own products and insteaqad of hiring someone or something to transfer the product to various stores, they just transfer to thier own store. This means that they dont really have to pay as much because it is their own store they are disturbuting it to.
--Shabnam Gardeziiii :)
Some reasons that a direct distributor may have to open a brick-and-mortar or brick-and-clicks are to attract more customers, sell more products and maybe eliminate possible competition. Brick-and-mortar factors are important in marketing because they benefit a business. Through the brick-and-mortar process, a company makes more money because sometimes consumers are lazy and don't feel like going to the store, so they just buy products online.
The direct distibution methods of apple are legit. I say this because they use the brick-and-mortar process, which benefit them greatly. They have products for sale online and in stores, so it's easy for consumers to purchase their goods.
Alex .A.
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