AN ANALYSIS OF PERCEIVED COMPETITIVE ADVANTAGES
WITHIN SELECTED MANUFACTURER .
DISTRIBUTOR ALIGNMENTS

Thesis for the Degree of Ph. D.
MICHIGAN STATE UNIVERSITY
PARKER MARTIN WORTHING
1968

  
 
 
 

LI 31‘ A Ii: "
THESIS Mch .- - LIL‘C

UCXV ("a 311'),

 

This is to certify that the

thesis entitled

AN ANALYSIS OF PERCEIVED COMPETITIVE ADVANTAGES
WITHIN SELECTED MANUFACTURER-DISTRIBUTOR
ALIGNMENTS

presented by

Parker M. Worthing

has been accepted towards fulfillment
of the requirements for

Ph.D. degree in BUSINESS Admin.

Date

 

0-169

 

G) Parker; Mama ggnghing gee

ALL RIGHTS RESERVED

ii

; We} 5

ABSTRACT

AN ANALYSIS OF PERCEIVED COMPETITIVE ADVANTAGES
WITHIN SELECTED MANUFACTURER-
DISTRIBUTOR ALIGNMENTS

by Parker Martin Worthing

This thesis deals with two concepts-—the concept
of differential competitive advantage and the concept
of marketing channels as integrated systems of action--
which are implicitly connected in much of the marketing
literature. That is, if a channel is to offer a unified,
Icoordinated marketing effort, it is assumed that the
effectiveness of this effort will be a function of one
or more competitive advantages. In this context, the
channel is a "competitive unit" and the bases of these
potential advantages range over all facets of the inter-
dependent marketing activities of channel members.

It was hypothesized that intrachannel agreement--
I agreement among men influencing marketing functions at
various Operational levels in a channel—-regarding per-
ceptions of competitive advantages or disadvantages
associated with a channel-wide range of marketing activi-
ties--each representing a source of possible differenti-
ation——would be positively related to the marketing

effectiveness of the channel as a competitive unit.

Parker Martin Worthing

This thesis investigated this relationship and other im-
plications of combining the concept of differential
advantage with the concept of marketing channels as
unified systems of action.

Measures of the marketing effectiveness of manu-
facturer-distributor channels competing for sales of
heavy construction equipment and the competitive advan-
tages and disadvantages men within these channels associ-
ate with sixty sources of possible differentiation covering
six elements of channel-wide marketing activity were analyzed.
The participating firms comprised nine groups of manufacturer-
distributor channels or competitive units, each group com-
peting for sales within a prescribed metropolitan trading
area.

Managers and field sales personnel with both firms
in each manufacturer-distributor unit identified, through
mailed questionnaires, the rival unit they feel offers the
strongest competition in their respective trading areas.
Respondents compared their unit's marketing effort with
that offered by this rival unit for each of the sixty
items which individually or in a variety of combinations
may contribute to the marketing success enjoyed by these
competing units. Competitive advantages or disadvantages
corresponding to favorable and unfavorable comparisons
were assigned to the sixty items by each respondent.

Analysis of "horizontal" segments of data revealed areas

Parker Martin Worthing

of greatest congruency and variance in perceptions of
marketing effort among men in different positions at

both the manufacturer and distributor levels of operation.
Analysis of "vertical" segments of data, each repre-
senting the perceptions of men within competing inter-
firm alliances, underscored the pattern of evaluations
that tended to be associated with greater degrees of
marketing success.

Although product offerings were perceived as sources
of competitive advantages by nearly all respondents, re-
gardless of their manufacturer affiliation, the analysis
revealed a significant relationship between congruency
of intrachannel perceptions of marketing effort and mea-
sures of the marketing effectiveness of competing channels.
Men influencing the marketing effort of the more successful
manufacturer-distributor units--units accounting for larger
market shares in the nine trading areas--tended to agree
more closely as to the sources and extent of Eggh’competi-
tive advantages and disadvantages.

The findings imply that more meaningful and durable
bases of competitive differentiation--at least among the
channels studied--may transcend the product and price
differences which are conventionally cited as top priority
components of competitive effort. Although generalizations
based on this study are limited, the data suggest that

conceptualizing marketing channels as competitive units

Parker Martin Worthing

with Jointly develOped and sustained bases of possible
competitive differentiation which mutually benefit member
firms has potential value for marketing managers with
firms forming channels in other segments of industrial
distribution.

A framework for Operationalizing this conceptual
model by "auditing" scores reflecting intrachannel per-

ceptions of competitive differentiation was developed.

AN ANALYSIS OF PERCEIVED COMPETITIVE ADVANTAGES
WITHIN SELECTED MANUFACTURER-

DISTRIBUTOR ALIGNMENTS
By

Parker Martin Worthing

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Marketing and Transportation
Administration

1968

Copyright by
Parker Martin Worthing

1968

ii

ACKNOWLEDGMENTS

The writer extends his sincere appreciation to
those who have contributed their time, effort, and
consideration to this research effort.

Members of my dissertation committee, Professors
William J. E. Crissy, William Lazer and Frank Mossman,
provided a blend of challenge, assistance and guidance
while generously contributing their time and thoughts.

I extend an especially warm personal note of gratitude
to Professor Crissy who served as a tolerant, under-
standing and instructive chairman of this committee.

Members of the administrative staff of Associated
Equipment Distributors, especially Mr. P. D. Hermann,
Executive Director, and Mr. Frank Skidmore, Director of
Industry Services, made substantial contributions to
both the conceptual and operational development of the
study.

The sales and marketing managers with the partici-
pating manufacturing firms gave their valuable time for
interviews and discussions.

Without the interest and c00peration of the district

representatives, distributor principals, and field

iii

salesmen, who set aside time to provide me with their
personal Judgments, the study could not have been
accomplished.

My wife, Marcia, and my children, Jane and Peter,
withstood the tests of patience and understanding which
accompanied this undertaking and contributed, in their

own special way, support and encouragement.

iv

TABLE OF CONTENTS

Page
ACKNOWLEDGMENTS . . . . . . . . . . . iii
LIST OF TABLES . . . . . . . . . . . vii
LIST OF EXHIBITS. . . . . . . . . . . ix
LIST OF APPENDICES . . . . . . . . . . x
Chapter
I. BACKGROUND OF THE STUDY: CONCEPTS AND
CONTENTIONS . . . . . . . . . l
The Concept of Differential Ad—
vantage: Its Origin, Nature
and Implications
Marketing Channels: Complexities
of Conflict, Control and
Cooperation
The Channel as a Competitive Unit:
A Ratibnale for Research
II. THE RESEARCH PROBLEM, DESIGN AND
METHODOLOGY . . . . . . . . . 19

The Research Problem: Scope and
Focus

The Research Design: Manufacturers,
Middlemen and Market Areas

The Research Methodology: Compari-
son, Congruency and Competitive
Strength

Chapter

III. AGGREGATIVE ANALYSIS: COMPARISON OF
INTERPOSITION PERCEPTIONS OF MARKET—
ING EFFORT . . . . . . . .
"Universal" Appraisals of Competitive
Components
"Particular" Appraisals of Competitive
Components

An Empirical Interpretation of

Potential Competitive Advantages

Summary of Aggregative Analysis

IV. MACROSCOPIC ANALYSIS:
COMPETITIVE STANDING AMONG MANU-

FACTURER—DISTRIBUTOR COMBINATIONS
Elements of Marketing Strength and
Perceptual Congruency Within Competing

Combinations
Dimensions of Competitive Effectiveness

CORRELATES OF

Competitive Standing

Summary of MacrOSCOpic Analysis

V. MICROSCOPIC ANALYSIS:

CORRELATES OF
MARKETING EFFECTIVNESS AMONG MANU—

FACTURER-DISTRIBUTOR UNITS. . .

Element Evaluations Among Competitive

Units

Competitive Advantages and Market

Shares
Unit Element Scores as a Basis for

"Channel Audits"
Summary of Microsc0pic Analysis

VI. A SUMMARY OF THE STUDY:
RECOMMENDATIONS

Review of the Findings

RESULTS AND

The Paradox of Perceived Product

Superiority

Benefits of the "Conceptual

APPENDICES .

BIBLIOGRAPHY.

Marriage"

vi

Page

61

87

116

145

173
21”

Table

10.

ll.

l2.

13.

14.

LIST OF TABLES

Sources of Possible Competitive Advantage
for Manufacturer-Distributor Units .

Response to Questionnaire Mailings . .

Summary of Analytical Segments and
Statistics . . . . . . . . .

Distribution of Respondents by Position.

Bases of "Universal" Competitive Advantages

Bases of "Universal" Competitive Dis-
advantages . . . . .. . . . .

"Particular" Appraisals of Competitive
Advantages and Disadvantages . . .

Items with Statistically Significant D
values 0 I O O O O O O I 0

Composition of Competing Manufacturer-
Distributor Combinations . . . .

Ranking of Competitors by MMGR's . . .

Manufacturer-Distributor Combination Ele-
ment Mean Score Totals . . . .

Rank Correlation of Combination Element
Mean Score Totals and Competitive
Standing 0 O O O O O O O O O

Manufacturer-Distributor Combination Ele-
ment Standard Deviation Totals . .

Rank Correlation of Combination Element

Standard Deviation Score Totals and
Competitive Standing. . . . . .

vii

Page

AA
49

53
63
68

71

75

81

88
90

9A

100

105

107

Table Page

15. Distribution of Item Mean Scores Among
Competing Combinations . . . . . . 110

16. Distribution of Competing Manufacturer-
Distributor Units. . . . . . . . 119

1?. Competitive Unit Element Score Totals--
Product, Service and Financial . . . 123

18. Competitive Unit Element Score Totals--
Personal Selling, Promotion and
Personnel . . . . . . . . . . 12A

19. Competitive Unit Composite Score Totals
and Market Share Percentages . .‘ . . 125

20. Competitive Advantages and Disadvantages
Associated with Nonproduct Elements

Among Competing Units . . . . . . 128
21. Matrix of Area Element Scores.. . . . . 138
II-l. Competitive Comparison Item Response

Percentages. . . . . . . . . . 195
II-2. Responses to Competitive Comparison Items . 20l

III-l. Manufacturer—Distributor Combination Item
Mean Scores. . . . . . . . . . 205

III-2. Manufacturer—Distributor Combination Item
Standard Deviation Scores . . . . . 207

IV-l. Rank Correlation of Competitive Unit
Market Shares and Element Scores--
Product and Service . . . . . . . 210

IV-2. Rank Correlation of Competitive Unit
Market Shares and Element Scores--
Financial and Personal Selling . . . 211

IV-3. Rank Correlation of Competitive Unit
Market Shares and Element Scores--
Promotion and Personnel. . . . . . 212

IV—A. Rank Correlation of Competitive Unit
Market Shares and Composite Scores . . 213

viii

LIST OF EXHIBITS

Exhibit

1A.

1B.

1C.

1D.

3A.

3B.

30.

AA.

AB.

AC.

Cover Letter to District Representatives--
First Mailing . . . . . . . . .

Cover Letter to Distributor Managers--
First Mailing . . . . . . .

Cover Letter to District Representatives--
Second Mailing. . . . . . . .

Cover Letter to Distributor Managers—-
Second Mailing. . . . . . . . .

Common Cover Sheet for Questionnaires

Request for Ranking of Competitors and
Market Share Estimates--Manufacturer
Managers. . . . . . . . . .

Request for Ranking of Competitors and
Market Share Estimates-—District
Representatives . . . .

Request for Ranking of Competitors and
Market Share Estimates——Distributor
Managers and Field Salesmen . . . .

Instructions for Competitive Comparisons-—
Manufacturer Managers . . . . . .

Instructions for Competitive Comparisons--
District Representatives . . . . .

Instructions for Competitive Comparisons--
Distributor Managers and Field Salesmen

Delineation of Potential Competitive
Advantages . . . . . . . .

Individual Distributor Firm Data Sheet.

ix

Page

175

176

177

178

179

180

182

183

18A

185

186

187
193

LIST OF APPENDICES

Appendix Page
I. Data Gathering Instruments . . . . . 17”
II. Aggregative Analysis Tables. . . . . 194
III. Macroscopic Analysis Tables. . . . . 205
IV. Micros00pic Analysis Tables. . . . . 209

CHAPTER I

BACKGROUND OF THE STUDY: CONCEPTS

AND CONTENTIONS

Knowledge of the competitive environment is a
major prerequisite to marketing success. Theodore
Levitt's "prescriptions" have helped increase managerial
sensitivity to the dangers of "myopia" in this context.1
Marketing managers cannot avoid realizing the impact of
change on past decisions. Nor can they avoid the dis-
comforts of continued decision making in the face of un—
certainty. The unpredictable rate of technological pro-
gress challenges marketing planners. Inter-related
economic, social and psychological variables add further
complexity. The sources of change are many and varied.

Its influence on a firm's products, markets or other

facets of marketing activity may be subtle or direct.

 

lTheodore Levitt, "Marketing Myopia," Harvard
Business Review, (July—August, 1960), pp. “5-56. The
Substance of this article was subsequently incorporated
in his book. See especially Chapter 3, "Management
Myopia" in Theodore Levitt, Innovation in Marketing
(New York: McGraw-Hill Book Company, 1962), pp. 39-75.

 

If a firm's marketing success is to endure against
this background of change and uncertainty, some basis
for competitive superiority must be developed and sus-
tained. Wroe Alderson contends that "what is important
in competition is differential advantage, which can give
a firm an edge over what others in the field are offer-
ing."2

This suggests a second level of necessary knowledge
of the competitive environment. Marketing managers must
provide for an awareness and appraisal of their intra-
industry competitive standing. As a consequence, strategy
and tactics will reflect an appreciation of competitors'
strengths and weaknesses. To use Alderson's words again:

Sellers' competition is not merely a matter of

tactics as in the case of two military forces in

fixed positions gradually wearing each other down.

Competition is a war of movement in which each of

the participants is searching for strategies which

will improve his relative position.3

In the context of the above quotation, "victory" is
measured by the attainment of profit and growth. This,
in turn, depends upon marketing efforts that develop and
sustain a favorable comparative relationship to competitors.

Alderson treats the search for such a differential advan-

tage as the essence of competition in his functionalistic

 

2Wroe Alderson, Marketing Behavior and Executive

Action (Homewood, Illinois: Richard D. Irwin, Inc.,
T9575, p. 102.

31bid., p. 108.

approach to marketing theory construction.“ His influence
on marketing thought has resulted in this term taking its
place alongside consumer orientation, product differen-
tiation, and market segmentation as conceptual "standards"
in the parlance of marketers.

The Concept of Differential Advantage:

Its Origin, Nature and
Implications

 

 

 

The term differential advantage traces back to the
writings of the early economists. For example, both Adam
Smith's classic example of pin making and David Ricardo's
"theory of comparative advantage" in inter-regional trade
concern relative evaluations of economic variables.

Edward H. Chamberlin's well-known treatise served
to point up the concept of differentiation and its impact
on competition.5 He attempted to sharpen the descriptive
reality and analytical methodology of earlier economic
theorists with his renewed view of competition. In
formulating the principle that the market for every
competitor is in some degree unique, Chamberlin broadened

the bases of differentiation in a competitive context.

 

“See Chapter IV, "Competition for Differential Ad-
vantage" in Wroe Alderson, Marketing Behavior and Execu-
tive Action (Homewood, Illinois: Richard D. Irwin, Inc.,
1957), pp. 101-129 and Chapter 8, "The Search for Differ—
ential Advantage" in Wroe Alderson, Dynamic Marketing
Behavior (Homewood, Illinois: Richard D. Irwin, Inc.,

19655, pp. 18u-210.

 

 

 

5Edward H. Chamberlin, Theory of Monopolistic
Competition (Cambridge, Mass.: Harvard University Press,

1933).

 

As he put it:

Differentiation may be based upon certain charac-
teristics of the product itself, such as exclu-
sive patented features; trade-marks; trade names;
peculiarities of the package or container, if
any; or singularity in quality, design, color or
style. It may also exist with respect to the
conditions surrounding its sale.

The specific term differential advantage is used in

 

an essay by John Maurice Clark outlining the basis for a
more adequate diagnosis of competition.7 He argued that

a firm's actions to gain added business result in "the
neutralizing process whereby rivals follow the initiator's
lead and destroy his differential advantage."8 Clark
viewed these temporary differential advantages and their
subsequent competitive neutralization as inseparable from

the processes of progress. In his final work, Competition

 

as a Dynamic Process, Clark contends that price, product

quality, selling effort and processing efficiency are the

9

four inter-related elements of competition. Commenting

on differentiation, he said:

 

6Ibid., p. 56.

7John M. Clark, "Competition and the Objectives of
Government Policy" in Edward H. Chamberlin (ed.), Monopoly
and Competition and Their Regulation (New York: St.
Martin's Press, 195“), pp. 317-337. Of particular rele-
vance is Section (3), "A Unifying Framework for a Broader
Theory: Competition as a Sequence of Initiatory Moves and
Counteracting Responses," pp. 326-328.

8Ibid., p. 327.

9John M. Clark, Competition as a Dynamic Process
(Washington, D. C.: The Brookings Institution, 1961).

While product differentiation is treated in theory
as a special case, it is actually the most general
case, or the most comprehensive class of cases,
since nearly all the products and services in in-
dustry and trade involve some differentiation be—
tween competing sellers, in the product itself,

in services connected with it, including transport,
or in the "image" it presents to the mind of the
buyer.10

The implications of Chamberlin's "monopolistic

"11 and the essence of what Clark termed "the

"12

competition

economics of differential advantage are clear in

Alderson's writing.l3

Clark's influence is perhaps
greater as he placed considerable emphasis on the dynamics
of competition. This is more in keeping with Alderson's
functionalist approach to competition which rests on the
assumption that "every firm must seek and find a function

in order to maintain itself in the market p1ace."lu

 

lOIbid., p. 212.

llChamberlin, op. cit.

12John M. Clark, "Competition and the Objectives
of Government Policy" in Edward H. Chamberlin (ed.),
Monopoly and Competition and Their Regulation (New York:
St. Martin's Press, 1954), pp. 326—328.

13See especially Wroe Alderson, Marketing Behavior
and Executive Action (Homewood, Illinois: Richard D.
Irwin, Inc., 1957), pp. 101-109 and Dynamic Marketing
Behavior (Homewood, Illinois: Richard D. Irwin, Inc.,

19655. pp. 192-19“.

l“Alderson, Marketing Behavior and Executive

Action, op. cit., p. 101.

 

 

 

 

 

As Alderson's theoretical perspective broadened,
so did his discussion of potential sources of this
"function" in the form of some competitive advantage.

The posthumously published Dynamic Marketing Be-

 

havior includes differentiation through market segmen-
tation, along with differentiation by selection of
appeals, by transvection, by product improvement, by
process improvement and by product innovation as six
aSpects of the search for differential advantage.15
Earlier treatment centered on the dimensions of "product"
in the Chamberlinian sense, along with technological and
geographic grounds, as sources of competitive advantage.16
Other writers, while not using the term differential
advantage, have delineated variables related to firms'
competitive standing. Culliton's study resulted in a
lengthy list of "order-getting ingredients" which, in
various combinations, distinguish the efforts of indi-

vidual firms.17 Oswald Knauth lists location, exclusive

position, custom, reputation, established organization,

 

15Alderson, Dynamic Marketing Behavior, op. cit.,

 

16Alderson, Marketing Behavior and Executive

Action, op. cit., pp. 1061108. A brief discussion is
also included in Wroe Alderson and Paul E. Green,
Planning and Problem Solving in Marketipg (Homewood,
Illinois: Richard D. Irwin, Inc., 196A), pp. 392-395.

 

 

17James W. Culliton, The Management of Marketing
Costs (Boston: Division of Research, Graduate School
of Business Administration, Harvard University, 19A8).

resource ownership, few competitors, and bigness as
possible advantages in attaining a favorable "trade
position."18
Knauth points out that no concern can have every
trade advantage. "Hence the choice of which is most
possible to attain in each particular situation is of

the utmost importance."19

There are two aspects of such
choices that need emphasis. First, several dimensions
of competitive advantage discussed above are beyond the
influence of marketing managers. They are not "con-
trollable" variables in the marketing executive's
decision making process.20 Yet responsibility for con—
tinued pursuit or maintenance of a favorable competitive
standing remains essentially with marketing managers.
Secondly, an advantage exists only in relation to
the efforts of rival firms in the competitive setting.
A comparative evaluation is necessary. Thomas Berg sub-

stantiates this point in the following quotation.

Competitors are always seeking to achieve a stronger
relative position than you possess in this milieu.

 

l8Oswald Knauth, Business Practices, Trade Position,

and Competition (New York: Columbia University Press,
1956), pp. 13-62.

 

 

l91b1d., p. A3.

2OFor amplification of the term "controllable"
variables see John A. Howard, Marketing Management:
Analysis and Planning (Homewood, Illinois: Richard
D. Irwin, Inc., revised edition, 1963), pp. “-9.

 

 

They attempt to do this, of course, in one of two

ways: (a) in a positive fashion, by trying to

improve their strong points and minimize their
weaknesses; or (b) by attempting to neutralize

or destroy your functional position. It is rela-

tive strengths that frequently tell the tale.

And to achieve a strong relative position each

competitor must, of course, have some absolute

strengths.2l

This suggests a need for additional stress on the
"controllable" facets of competing firms' marketing efforts.
Competition is not as glamorous as it is often described.
In the absence of exciting innovative breakthroughs in
technology and knowledge, competition continues. During
these sometimes lengthy periods, it takes the form of
strategy and tactics designed to maximize the relative
effectiveness of standard competitive "inputs" such as
service, promotion and personal selling.

If any criticism is to be made of Alderson's theo—
retical framework or descriptive treatments like Culliton's
and Knauth's, it may be that they have tended to under—
emphasize these elements of marketing as possible sources
of competitive advantage. Although Alderson suggests
that "marketing methods offer an ever-widening basis for

"22 his discussion of these

exploiting an advantage,
"methods" is limited. Such aspects of firms' marketing

activities, considered individually and collectively,

 

H

21Thomas L. Berg, "Designing the Distribution System,
(unpublished Ph.D. dissertation, Columbia University,
1960), p' 250

22
p. 196.

Alderson, Dynamic Marketing Behavior, op. cit.,

 

may well constitute the most significant sources of
lasting competitive advantage.

Whether differential advantage, competitive ad-
vantage, favorable trade position, or some other com—
parable term is adopted, a firm's objective remains one
of locating and sustaining some basis for lasting
allegiance from present and potential customers. How-
ever, when a firm moves its products to markets through
intermediaries, as is often the case, the concept of
differential advantage takes on additional problematic
dimensions.

Marketing Channels: Complexities of
Conflict, Control and Cooperation

 

 

Most contemporary marketing scholars would likely
agree with Wroe Alderson's contention that "the analysis
of factors affecting marketing channels rests on the con-
ception of a system of action of which the individual
firms are elements."23 Variations of this "systems"
perspective have accounted for several approaches to the

study of marketing channels.”4 Whether the analysis is

 

23Wroe Alderson, "The Development of Marketing
Channels" in Richard M. Clewett (ed.), Marketing Channels

 

for Manufactured Products (Homewood, Illinois: Richard
D. Irwin, Inc., 1954), p. 22.

2“A thorough discussion of these approaches is

included in Bert C. McCammon, Jr. and Robert W. Little,
"Marketing Channels: Analytical Systems and Approaches,"
in George Schwartz (ed.), Science in Marketing (New

York: John Wiley & Sons, Inc., 1965), pp. 321-385.

 

 

10

26

25 or quantitative, emphasis is placed on

descriptive
functional relationships and patterns of interaction
within channels. It is generally assumed that the
activities of individual firms in a channel should be
related in a unified, channel—wide marketing effort.
Merely conceptualizing marketing channels as inte-
grated operating systems does not, of course, remove
dissimilarities in the objectives and operations of firms
within the same channel. Some observers feel conflict
resulting from inherent structural and Operational
conditions is often under-emphasized in descriptions of
marketing channels. Phillip McVey.suggested that channels
are more realistically viewed as a series of vertical
markets rather than operating systems, per se.27 Warren

Wittreich argued that when a manufacturer-oriented approach

 

25For example, Berg turns to the literature on
organization theory and approaches channel designing as
a problem in social organization. See, Berg, op. cit.

26See Frederick E. Bladerston, "Design of Marketing
Channels" in Reavis Cox, Wroe Alderson and Stanley J.
Shapiro (eds.), Theory in Marketing (2nd series; Homewood,
Illinois: Richard D. Irwin, Inc., 1964), pp. 176-189 and
Helmy H. Baligh, "A Theoretical Framework for Channel
Choice" in Peter D. Bennett (ed.), Marketing and Economic
Development (Chicago: American Marketing Association,

1965), pp. 631-65“.

 

 

27Philip McVey, "Are Channels of Distribution What
the Textbooks Say?," Journal of Marketing, (January,
1960), 61-65.

11

to channel operations is over—emphasized "the assumption

is all too often made that what is good for the system as

a whole will be just as good for each link in the system."28
Clearly, what one member of a channel might consider

"good" need not be as important to another member. Con-

sider, for example, a typical distributor handling the

products of several manufacturers. Each of these manu-

facturers has some ideal design for his distributive net—

work. They strive to affect the operations of this

29 Each of them hopes to maximize

distributor accordingly.
the selling efforts and effectiveness of this distributor
in behalf of their particular products.

The distributor, on the other hand, attempts to
Optimize the number of products he carries and the allo—
cation of his efforts across this product line. He
evaluates his relationship with each of his suppliers
in the light of his own objectives and problems. The
support he seeks from these manufacturers takes a variety

30

of forms. Under these conditions, there is a fine line

 

28Warren J. Wittreich, "Misunderstanding the Re-
tailer," Harvard Business Review, (May-June, 1962), 1A7—155.

 

29For examples of how several firms view this task,
see "Building a Sound Distributor Organization," Experi-
ence in Marketing Management, No. 6 (New York: National
Industrial Conference Board, Inc., 1964).

30Carl Marshall, "What Distributors Want from
Manufacturers," Industrial Marketing, (September, 1957),
202-207. This is a good representation of the distri—
butor point of view.

 

12

between "manufacturer assistance" and "distributor
resistance." When a channel contains such independently
owned and Operated "links," influence and persuasion are
more appropriate than control and direction in describing
a manufacturer's efforts to integrate a channel—wide
marketing front. Yet, if any measure of unity is to
exist within a channel, there must be some degree of
leadership undertaken by one member and accepted by

31

other members. Furthermore, as part of a firm's total

marketing mix, channel activities need to be coordinated

with other elements in the firm's over-all strategy.32
In seeking to describe and explain channel oper-

ations, investigators have focused on conflict and

control as central variables in the unification of inter-

firm relationships.33 Mallen discusses patterns of

 

31McCarthy has coined the term "channel captain"
to describe the firm which directs activities and sets
policies for the whole channel. See E. Jerome McCarthy,
Basic Marketing: A Managerial Approach (Homewood,
Illinois: Richard D. Irwin, Inc., revised edition,
196“), pp. A60-A62.

 

32William R. Davidson, "Channels of Distribution
--One Aspect of Marketing Strategy," Business Horizons,
(February, Special Issue, 1961), pp. 84—90.

33See Bruce Mallen, "Conflict and Cooperation in
Marketing Channels" in L. George Smith (ed.), Reflections
on Progress in Marketing (Chicago: American Marketing
Association, 1965), pp. 65—85 and Louis W. Stern,
"Channel Control and Inter-Organization Management" in
Peter D. Bennett (ed.), Marketing and Economic Develop-
ment (Chicago: American Marketing Association, 19657:
pp. 655-6650

 

 

 

13

adjustment to the conflicting-cooperating channel environ-
ment.3u He supports channel leadership based on demo-

35 Stern speaks of the "balance

cratic relationships.
of channel power" and wisely points out that, in some
cases, the existence of channel control may inhibit

36

channel performance. He believes channel leadership
calls for a broadened managerial philosophy on the part
of one member. Redirection of individual organization
efforts and objectives are considered requirements for
effective over-all performance by the channel.37

Along the same vein, Valentine Ridgway, in his
article discussing manufacturer-dealer systems, suggested
that the provision of mutually satisfying roles for mem-
bers constitutes a major administrative responsibility for

any effective leader.38

His analysis underscored mutual
expectations, the nature and extent of decision making,
communications, performance standards, and methods of

appraisal as dimensions of dependency between firms in

 

manufacturer-dealer systems.39 When such systems are
3“Mallen, op. cit. 35Ibid.
36Stern, op. cit. 37Ibid.
38

Valentine F. Ridgway, "Administration of Manu-
facturer—Dealer Systems," Administrative Science Quarterly,
(Spring, 1956), pp. MAS—A83.

 

39Valentine F. Ridgway, "The Administration of
Manufacturer-Dealer Systems," (unpublished Ph.D. disser-
tation, Cornell University, 1963).

1A

viewed as integrated organizational entities, they become
a most appropriate subject for furhter study by students
of administrative theory.”0 In the interim, however,
different products, different markets and different
competitive settings add innumerable complexities to

the search for improved channel-wide effectiveness. In
most marketing channels the gap between "ideal" condi—
tions and "real" conditions remains wide. More is to

be gained from OOOperation than conflict, but the formula
for harmony remains elusive.

There is little to be gained, on the other hand,
from considering the marketing activities of manufacturers
and their intermediaries as separate, incremental oper-
ations. To be sure, several facets of an intermediaty's
competitive stance are not subject to the control of
manufacturers he represents. The fact remains, however,
that many of these competitive inputs appear to have con-
siderable relevance to the marketing effectiveness of the
channel. Chamberlin pointed out that a retailer's
potential dimensions of differential include "the general
tone or character of his establishment, his way of doing
business, his reputation for fail dealing, courtesy,
efficiency, and all the personal likes which attach his

customers either to himself or those employed by him."ul

 

“Gib d.

ulChamberlin, Op. cit., p. 56.

15

Clark, in turn, added "convenience and accessibility of
distributors' facilities, the method and effectiveness

of display, and information, demonstration, or persuasion
offered by the salesman" as factors contributing to the
images of competing products in the potential consumer's

mind.“2

These are among the attributes manufacturers
look for when evaluating firms in their distributive net-
work]43 They are often the subject of manufacturers'
efforts to improve distributor operations.“I

Some of these factors would exist in the absence
of any one manufacturer among those represented by a
given distributor. However, every manufacturer utilizing
this distributor is capable of either strengthening or
limiting many of these elements. Seldom could a competi-
tive advantage be sustained by either the manufacturer or
the distributor without influencing or being influenced
by marketing activities of the "partner" firm. Any
lasting competitive advantage would appear to depend upon

a delicate blend of control, influence and cooperation

designed to minimize the limitations of individual channel

 

“2John M. Clark, Competition as a Dynamic Process

(Washington, D. C.: The Brookings Institution, 1961),
p. 221.

I43See "Selecting and Evaluating Distributors,"
Studies in Business Policy, No. 116 (New York: National
Industrial Conference Board, Inc., 1965).

uuSee "Training Dealers," Studies in Business
Policy, NO. 48 (New York: National Industrial Conference
Board, Inc., 1950).

 

16

members and maximize their collective competitive
strength. As Bruce Mallen concluded, "For maximization
of channel profits and customer satisfaction, the

channel must act as a unit."u5

The Channel as a Competitive Unit:
A Rationale for Research

 

This prefatory discussion has dealt with the nature
of differential advantages and marketing channels as
integrated systems of OOOperative action by member firms.
In the literature of marketing these two concepts are
implicitly connected. That is, if a channel is to offer
a unified, coordinated marketing effort, it is assumed
that the effectiveness of this effort will be a function
of one or more competitive advantages. In this context,
the channel becomes the "competitive unit," and the bases
for these potential advantages range over all facets of
the combined marketing activities of channel members.
Their contributions to this combined effort are not al-
ways equal, but in the absence of mutual agreement and
cooperation their competitive effectiveness may be limited
in both an individual and collective sense.

In an article entitled, "The Channel of Marketing
as a Unit of Competition," Reavis Cox wrote:

Effective competition for an individual enter-

prise means participating in the work of a
channel that competes effectively as a whole

 

uSBerg, Op. cit., p. 85.

17

at the crucial point where the ultimate buyer

makes his choice among the offerings laid

before him.46
Cox's words serve as a reminder that there is much more
we need to know about why some channels or "competitive
units" compete more effectively than others in the same
competitive setting. Most discussions of channel
effectiveness are presented in descriptive frameworks
based on normative judgments. The need for empirical
investigation remains strong. This thesis presents the
results of research designed to help meet this need.

Despite the theoretical tenor of much of his
writing, Alderson said, "Marketing is a very pragmatic
discipline and the chief incentive for improving market-
ing technique is the need to solve marketing problems.”7
Throughout this chapter it has been suggested that an
on-going problem for every marketing manager is the
recognition, development and maintenance of one or more
competitive advantages. When these managers are associ-
ated in a marketing channel, their problems surrounding
competitive advantages and channel-wide strategies are

more complex. In this sense, this thesis offers a basis

for improved marketing technique. In a broader sense,

 

usReavis Cox, "The Channel Of Marketing as a Unit
of Competition" in W. David Robbins (ed.), Successful
Marketing at Home and Abroad (Chicago: American Market-
ing Association, 1958), p. 211.

 

U7
p. 209.

Alderson, Dynamic Marketing Behavior, pp. cit.,

 

18

it is designed to add some empirical "planks" to the
unfinished "bridge" connecting the conceptual to the

operational.

CHAPTER II

THE RESEARCH PROBLEM, DESIGN AND

METHODOLOGY

The Research Problem: Scope and Focus

The background discussion of the preceding chapter
centered on two concepts--differential advantage and
marketing channels as competitive entities. It was sug-
gested that these concepts are implicitly connected in
much of the marketing literature. ~This research effort
is designed to analyze and evaluate this "conceptual
marriage" within a Specific competitive environment.

When channel members' marketing activities are
viewed collectively, the number and variety of possible
differential advantages increases considerably. Broadly
interpreted, this would include all facets of their
collective competitive effort that might serve as bases
for buyer discriminations in their favor. Clearly, how-
ever, their reliance upon each other in this joint effort
is not always balanced. For example, Ridgway's thesis
considered independent dealers allied with a single

manufacturer.1 These manufacturers delegate "a little

 

1Ridgway,'The Administration of Manufacturer-
Dealer Systems,"op. cit. The interested reader is
directed particularly to pp. 22-31.

19

20

product differentiation, some price competition, and
much selling effort"2 to their dealers.

Control in this type of channel rests essentially
with manufacturers. In most channels the source and
extent of control is not so easily identified. Division
of intrachannel responsibilities is often not clear.
Managers with different firms within a channel may put
different priorities on various aspects of their com—
bined marketing effort. What one may view as a distinct
competitive advantage another may consider irrelevant.
Loyalty to each other is subordinate to concern for their
individual problems. Their goals are Often incongruent.
To the manufacturer it may be a matter of developing
strong brand allegiance across a national market. To
wholesalers or retailers it may be a matter of meeting
the particular needs of clearly identified local markets
and establishing sustained customer loyalties. Their
relationships are characterized by bargaining, concessions
and compromises.

At the same time, the common ingredients of inter—
dependence and mutual benefit can not be ignored. Alder-
son once described channel members as "a loose coalition

engaged in exploiting joint Opportunity in the market."3

 

2Ibid., p. 28.

3Alderson, "The DevelOpment of Marketing Channels,"

op. cit., p. 30.

21

Successful exploitation of this opportunity is clearly
related to the impact of channel members' combined
marketing efforts.

. These efforts are an amalgam of competitive inputs.
Individually and collectively they constitute dimensions
of differential advantage. Emphasis placed on any one
of them by marketing personnel throughout the channel
would appear to be a function of three factors: (1)
their evaluation of its impact on the buyer's purchase-
decision process, (2) their evaluation of its strength
relative to competitor's efforts, (3) the extent of their
control and influence over its development.

Intrachannel congruency regarding such emphasis is
a likely prerequisite for improved channel effectiveness
as a competitive unit. The effect would be more unified,
complementary channel relationships. The result would
be a more productive channel-wide matching of effort with
opportunity.

These conjectural assertions need empirical exami-
nation. The framework for investigation must include a
delineation of potential differential advantages, an
analysis of competitive evaluations of these advantages
by members of competing channel units, and measures of
intra- and interchannel congruency among these evalu-
ations. The nature Of this congruency and its relation-
ship to the competitive standing of channel units con-

stitutes the scope of this research problem.

22

Statement of the Problem

 

The problem is best stated as a question: Is
intrachannel agreement on the competitive strength of
selected elements of channel-wide marketing effort
significantly related to the channel's marketing
effectiveness?

An additional question concerning possible oper-
ational applications that might result from findings re-
lated to the central research problem is: DO appraisals
of these elements, as competitive advantages or dis-
advantages, by marketing personnel at various levels
within competing channel units provide a basis for im-
proving channel-wide strategy formulation?

As posed above, the problem centers on the relation-
ship between two variables.' Specifically, these variables
are the extent of agreement concerning marketing activities
within channels and the marketing effectiveness of these
channels. The key variable in this research framework,
however, is the channel itself. Because the term market-
ing channel is categorically applied to any and all insti-
tutional alignments that move products and services from
manufacturers to utlimate users, the number and types
of firms making up channels represent a wide, complex
range of variations. Their functions and marketing
activities are equally varied. There is, of course, no

universal "average" channel. Although many industries

23

exhibit traditional interfirm distributive alignments,
generalizations across industries or product classes
must be made with care. No single research undertaking
could include all possible types of channel formations
and functions. It is difficult to defend any grouping
of channel types as a "representative" sample. The
delicate balance between universal and unique channel
properties needs careful consideration.

Many practitioners, however, tend to over-emphasize
what they consider to be the unique problems and unique
solutions of their industries. Although this research
is focused on a specific type of channel in a specific
competitive setting, hopefully, many of the findings are
generally applicable and tend to counteract the delusion

of uniqueness that persists among many marketing managers.

The Investigative Setting

 

The specific focus of this research is on marketing
activities within channels—-viewed as competitive units--
made up of selected competing manufacturers of heavy
construction equipment and the independent distributor
firms that function as their exclusive representatives
in various market areas.

At the manufacturing level, this industry comprises
establishments "primarily engaged in manufacturing heavy
machinery and equipment used by the construction in-

dustries, such as bulldozers; concrete mixers; cranes

2A

A V

. . . pavers, and power shovels." The 1963 Census of

 

Manufacturers indicates that shipments of the 617 manu-

 

facturers in this industry totaled 2.696 billion dollars.5
This represents approximately a 6 per cent increase in

the number of manufacturers, and a 27 per cent increase

in the value of total industry shipments over the pre—
vious census.

These manufacturers, with few exceptions, market
their products through independently owned and Operated
construction equipment distributor firms. Such distri-
butors are "primarily engaged in marketing cranes, exca-
vating machinery and equipment, power shovels, road con—
struction and maintenance machinery, tractor mounted
equipment, and other machinery and equipment."7 The
most recent census lists 2,358 construction equipment
distributor firms.8 Their combined total sales of 2.612
billion dollars represented a 30.2 per cent increase over

the 1958 Census of Business finding.9 The number of

 

 

A

_ U. S. Department of Commerce, Census of Manu-
facturers, Bureau of the Census, 1963,TVol. II, Part
2, p. 35B-1. These firms are included under SIC Code
353l--Construction Machinery and Equipment.

5Ibid., p. 35B-8. 6Ibid.

7U. S. Department of Commerce, Census of Business,
Bureau of the Census, 1958, Vol. III, p. APP-ll.

8

U. S. Department of Commerce, Census of Business,
Bureau of the Census, 1963, Vol. IV, Part 1, pp. 1-13.

9

 

 

 

 

Ibid., p. xxi.

25

distributor firms increased by about 10 per cent over
the same period.10

The market for construction equipment and allied
supplies includes contractors, industrial producers,
public utilities, mining and logging firms and govern—
mental bodies at local, state and federal levels. The
"core" of the market is made up of approximately 25,000
contractors engaged in heavy construction and highway
building.ll

Through contract agreements, these distributors
buy and stock equipment, parts, and supplies from
specific manufacturers. For the most part, construction
equipment distributors are granted exclusive territorial
coverage by manufacturers of the non-competing lines of
equipment and supplies they carry. Distributors sell,
rent, service and repair this equipment. One relatively
recent study revealed that distributor sales volume is
"typically" divided among new equipment sales, 51 per
cent; parts 18 per cent; used equipment, 10 per cent;
supplies, 8 per cent; rentals, 6 per cent; service, 5

per cent; and other sources, 2 per cent.12

 

10Ibid., pp. 1-13.

ll"Highway/Heavy Construction Contractor Profile,"
(A Roads & Streets Marketing Report), Roads & Streets
A Ruben H. Donnelley Magazine, Chicago, 1966 and "A
Profile of the Heavy Construction Industry," Contractors

 

 

and Engineers (New York: Buttenheim Publishing Cor—
poration, 1966).

12"How to Improve Construction Equipment

26

Although the number of manufacturers represented
in a distributor's product line varies with the size and
extent of distributor operations, top equipment lines
in terms of sales volume tend to be tractors, cranes
and shovels, air compressors, tractor loaders and graders.l3
Larger distributor firms function as exclusive outlets for
major equipment manufacturers across all or parts of
several adjacent states. They operate several branch
sales and service facilities throughout their assigned
market areas. Often distributors are classified for pur—
poses of performance comparisons into those with and those
without a major tractor account in their product line.
In 1965, the median sales volume for all distributors was
$2.573 million.lu For non—tractor account distributors
the median was $2.029 million, compared to $5.052 million
among distributors with a tractor account.15

A "typical" distributor firm handles four major

equipment lines, twelve lesser equipment lines, and

 

Manufacturer-Distributor Relations for Greater Profit,"
Construction Equipment and Materials (New York: A Con—
over-Mast Publication, 1961), p. 61.

 

l31bid., p. 6.

1“Cost of Doing Business, (AED's 1966 Survey),
Associated Equipment Distributors, 615 West 22nd Street,
Oak Brook, Illinois, p. 10.

 

15Ibid.

27

seventeen supply item lines. The efforts of a nine man
sales force and accounting, parts, and service personnel
are directed by three men in managerial positions. Sales
of major equipment lines account for the most significant
portion of the firm's approximate annual volume of 2

million dollars.16

Therefore, among the thirty or more
manufacturers a distributor firm may represent, relation-
ships with major equipment producers are viewed by
distributor managers as first priority components of
effective, profitable operations.

The nature of these relationships is formally
detailed in manufacturer-distributor contracts. Among
the items typically included are those pertaining to the
exclusive territorial coverage assigned the distributor,
responsibilities regarding types and amounts of infor-
mation exchanges, stocking requirements, responsibilities
for accpeting orders and making deliveries, display and
storage requirements, warranty coverage and adminis—
tration responsibilities, discounts and payment terms,
and sales aids and advertising to be furnished by the

manufacturer.17

 

16M. B. Jaeger, "Manufacturer Views Dealer Sales
Motivation as--a Chain Reaction," Construction Equipment
News, (July, 1962), pp. 31-33.

l7"Manufacturer-Distributor Relations," Construction
Equipment News, (December, 196“), pp. 19 and 22.

28

Within this specific competitive context, align-
ments of competing manufacturers of construction equip—
ment and their respective distributors provide an in-
vestigative focus for analyzing the relationships posed
in the foregoing statement of the research problem. In
any given metropolitan market area, for example, com—
peting channel units are formed by rival manufacturers
and their individual exclusive distributors covering
this area. Various factors included in the joint market-
ing efforts of these competing manufacturer-distributor
units can be itemized in the form of potential differ-
ential advantages. Evaluations of the comparative
competitive strength of these factors may be requested
of marketing personnel at both the manufacturer and
distributor levels. Patterns of congruency among these
judgments may then be related to measures of the relative
marketing effectiveness of these competing channel units.

Such is the setting and focus of this study.

Research Objectives

Against this investigative framework, specific

research objectives of this study are as follows:

1. To develop a comprehensive delineation of
dimensions of potential differential ad-
vantages which represent points of
competitive comparison among construction

equipment manufacturer-distributor units.

29

2. To underscore areas of congruency and vari-
ance among competitive evaluations placed on
these variables by management and field sales
personnel at both manufacturer and distri—
butor levels of operation.

3. To determine the magnitude and significance
of the relationship between these evaluations
and the competitive standings of various combi-
nations of selected competing manufacturers
and their respective distributors.

A. To utilize the findings of this research as a
frame of reference for recommendations designed
to:

a. provide manufacturers and distributors
with a broadened perspective of construction
equipment marketing and an increased capa-
city to combine strategically all elements
of their marketing activities for improved
sales results, and

b. delineate possible applications of the
findings to alignments of manufacturers,
distributors and/or wholesalers in other
types of industrial products distribution.

The primary area of potential application of findings

from this study is, of course, within the specific com-
petitive setting investigated—-the heavy construction

equipment industry. The 617 manufacturers and 2,358

30

distributor firms accounting for over $2.6 billion in
sales comprise one of the fastest growing segments of
industrial marketing. Since the first Business Census

in 1929, construction machinery and equipment distributor
sales have increased approximately A550 per cent! This
is the largest percentage rate of sales growth among

all wholesale trade categories included in the Census

of Business.18

 

There are more than 302,000 wholesale trade
establishments handling $358 billion in sales in the
United States.19 These firms and the variety of manu-
facturers aligned with them constitute a vast realm for
potential improvements in marketing channel operations.
Clearly, any attempt to apply the findings from this study
across all these channel informations uncritically would
be unwise. Nevertheless, the conceptual framework of the
study does not preclude some degree of reasonable gener-
alization based on its results.

There is considerable comparability between the
type of channel investigated here and channels including
many of the 209,000 merchant wholesalers Operating within

our distributive structure.2O Although they typically

 

18

U. S. Department of Commerce, Bureau of the
Census, Census of Business, 1958, Vol. III, p. 6 and
Census of Business, 1963, Vol. IV, Part 1, p. xxi.

19U. S. Department of Commerce, Bureau of the
Census, Census of Business, 1963, Vol. IV, Part 1, p. xv.

2O

 

 

 

Ibid., p. xix.

31

handle the products of a number of manufacturers, they
buy and sell this merchandise on their own account.
Distributors, wholesalers, jobbers and other inter-
mediaries in this classification have total sales in
excess of $157 billion.21 They represent a signifi-
cant portion of industrial distribution where the
findings of this research effort may have considerable
universal utility.

The Research Design: Manufacturers,

Middlemen and—Market Areas

There are, of course, many types and models of
heavy construction equipment. Some manufacturers
specialize within a narrow range of products. Others
offer more inclusive lines. Consequently, not all manu—
facturers in this industry are direct competitors. The
same is true of distributors in any given area. Only
large distributor firms carry a full range of heavy
equipment items.

An analysis of the marketing activities of directly
competing manufacturer-distributor units in this setting
requires the selection of a "representative" piece of
equipment and a careful matching of competing manu-
facturers with their respective distributor firms. The
piece of equipment selected-—wheel-mounted tractor shovel—

loaders--is "representative" of most major equipment

 

21Ibid., p. xv.

32

items in terms of its price range, the extent of personal
selling involved, the importance of demonstrations,
availability of service, credit arrangements, and other
aspects of the impact of combined manufacturer-distri-
butor marketing activities on individuals who influence
or make tractor purchase decisions.

Although most tractor manufacturers also produce
other types of heavy construction equipment, tractors
are the major item in their product lines. There are
fourteen manufacturing establishments producing wheel-
mounted and/or track laying tractor shovel-loaders (SIC
Product Class Code 35317). Approximately 45 per cent of
their total value of shipments is accounted for by 4—
and 2-wheel drive tractor shovel-loader sales.22 In
addition, tractors are a prime account among larger
distributor firms. As estimated 30 per cent of con—
struction equipment distributors handle tractors and
tractor mounted equipment. Approximately 30 per cent of

their sales volume is related to this equipment.23

Sample Selection and
Composition

 

 

By focusing on tractor manufacturers and the

distributor firms representing them in various areas,

 

22U. S. Department of Commerce, Bureau of the Census,
Census of Manufacturers, 1963, Vol. II, Part 2, pp. 358-16,
21 and 38.

23U. S. Department of Commerce, Bureau of the Census,
Census of Business, 1958, Vol. III, pp. 6-12.

 

 

33

directly competing sets of manufacturer-distributor
units were identified. The seven competing manu-
facturers of wheel-mounted tractor shovel-loaders were
matched with the independently owned and operated distri-
butor firms handling their tractors on an exclusive basis
in nine different major metrOpolitan market areas.
The seven participating manufacturers were:
Trojan Division, Eaton Yale & Towne, Inc.
Allis-Chalmers Manufacturing Company's Construction
Machinery Division
International Harvester Company's Construction
Equipment Division
Clark Equipment Company's Construction Machinery
Division
Euclid Division of General Motors Corporation
Caterpillar Tractor Company
Thew-Lorain Division of Koehring Corporation
Nearly 15,000 4- and 2-wheel drive tractor shovel-
1oaders were sold in 1965, with the total value of ship-
ments approaching $180 million excluding exports.2u The
seven manufacturers participating in this study account

for approximately 85 per cent of this total market.25

 

2LI"America's Construction Market--l966/67," Con—
struction Methods and Equipment (New York: A McGraw-
Hill Publication, 1966), p. 7.

25This figure is based on the collective estimates
of several manufacturer marketing and sales managers,
distributor principals, and trade association adminis-
trative and staff personnel.

 

34

Through the OOOperation of Associated Equipment
Distributors, the national association of construction
equipment distributors, names and addresses of distri-
butor firms representing the seven manufacturers in nine
major metropolitan areas were made available. The
specific market areas were: Atlanta, Boston, Denver,
Indianapolis, Kansas City, Louisville, Miami, Salt Lake
City, and St. Louis.

Associated Equipment Distributor officials also
Offered considerable assistance in meeting various criteria
for selecting market areas for this study. The nine geo-
graphical areas eventually selected, which correspond
closely to Standard MetrOpolitan Statistical Areas, in—
clude a full spectrum of tractor buyers and users. Among
them are heavy highway construction contractors, a wide
variety of industrial buyers, mining firms, and commercial
building contractors. Variations in the terrain, weather
conditions and other factors influencing performance re-
quirements are included within these geographical settings.

Irregular territorial coverages assigned distri-
butors by the competing manufacturers precluded the in-
clusion of some cities. For example, in some locations
one distributor might cover an area that includes only a
portion of the territory covered by distributors repre-
senting the other manufacturers. For comparative pur-

poses, only alignments of manufacturers and distributors

35

covering closely corresponding market areas were in-
cluded.

The selection of a single piece of equipment--
tractor shovel-loaders--provided a means for identifying
and aligning directly competing manufacturer-distributor
units. It also provided a common source of product-
related points of comparison among competitors. The
product alone, however, is an insufficient basis for
any complete comparison of the combined marketing effort
of these competing units.

A framework for such a comparison was developed in
the form of a comprehensive collection of factors of
potential competitive or differential advantages, each
of which serves as a point of comparison among the com-
peting units. In its final form this delineation included
six major elements of the total manufacturer-distributor
marketing mix. These elements covered the product, ser-
vice, personal selling, promotional, personnel and finan—
cial aspects of their inter-related and inter—dependent
marketing efforts. Each element was, in turn, broken
into ten sub-topics which represent individual bases of
potential competitive advantage. The list of sixty items
covers a full range of factors that may contribute indi-
vidually or in a variety of combinations to the relative
competitive standings of manufacturer-distributor units

included in the study. Items included in this list are

36

detailed in the section of this chapter discussing data
collection.

Perceptions of the competitive strength of each of
these items were obtained from individuals at four differ-
ent positions within the manufacturer—distributor units.
Management and field sales personnel at both manufacturer
and distributor levels were included. Respondents in-
cluded a division level marketing manager with each of
the manufacturers. Despite such different titles as
Manager of Distributor Sales, Sales Manager, and Manager
of Dealer Administration, each of these men is directly
concerned with all facets of marketing-related cooperation
and communication between their firm and distributors
carrying their products. They are responsible for main-
taining an informed, aggressive, and effective sales ef-
fort throughout a network of distributor firms reaching
a national market.

Factory field sales personnel are key contact
agents in the relationship between each manufacturer and
their distributors. These men, called district repre-
sentatives in this industry, call on every distributor
carrying their firm's products within their assigned
multi-state territories. Often the district representa-
tive is the only contact between manufacturer and distri-
butor for months at a time. Their task is essentially

one of informing, advising, assisting, training and

37

persuading distributor management and sales personnel
in a manner that helps each distributor firm Obtain a
larger share of the tractor sales in their area.26
District representatives function as vital links
in the two-way communications between manufacturer manage—
ment and distributor management. Operational problems
involving price changes, delivery dates and warranty
coverage are resolved by the district representative or
through his contact with manufacturer headquarters. They
often set sales objectives with distributor management
and frequently make joint calls with distributor field
salesmen. Equipment demonstrations for prospective buyers
are frequently arranged with their help. Sales meetings
they conduct for distributor salesmen include sessions on
product knowledge, discussion of area sales potential,
competitive product comparisons, and allied topics.
Clearly, district representatives can be instrumental
in transforming manufacturer-distributor alignments into
effectively competing units. They are in a position to
make complete comparisons of the joint marketing activities
of manufacturer-distributor units competing for tractor
sales within their territories. In this connection, each

manufacturer manager provided the name and address of

 

26"The Role of the D. R.," Fourth Report, Committee
on Distribution Practices, Associated Equipment Distri—
butors, 615 West 22nd Street, Oak Brook, Illinois,
October, 1963.

38

their district representative covering each of the nine
metropolitan market areas. These representatives com—
prise the second segment of respondents at the manu—
facturer level of operations.

Appraisals of competing manufacturer-distributor
units within each of the nine market areas were also
requested from managerial and field sales personnel with
distributor firms in the sample. At the managerial level
respondents were principals, presidents or general mana-
gers. The nature and extent of combined manufacturer-
distributor marketing success is clearly influenced by
policies and procedures implemented by these managers.
They are responsible for all phases of distributor firm
operations. They influence both the amount and type of
marketing effort allocated to tractors, as well as all
other equipment and supply items in their product lines.
Every distributor manager evaluates his relationship with
the tractor manufacturer he represents in terms of the
competitive problems and Operational objectives he feels
are most relevant in his own market area.

Perhaps the most important contributions to the
marketing success of manufacturer-distributor units are
made by distributor field salesmen. These men represent
the complete unit-wide marketing effort in person.

They must have thorough knowledge of the features and

performance capabilities of products in their lines.

39

They need to recognize the needs, problems and potential
Of individual customers and prospects in their territory.
Any lasting competitive advantage a manufacturer-distribu-
tor team might develop is ultimately dependent upon the
performance of distributor salesmen. The fourth segment
of respondents is comprised of salesmen who call on cus-
tomers and prospects in their territory every day. Al-
though distributor salesmen sell all the equipment and
supply items their firms carry, they allocate a considera-
ble portion of time and effort to tractor sales.27 Two
field salesmen with each distributor firm were asked to
participate. With the addition of distributor salesmen,
respondents influencing nearly every phase of manu-
facturer-distributor marketing relations are included in
the sample.

To summarize, seven tractor manufacturers were
selected and matched with distributor firms carrying their
equipment in nine large cities. Seven directly competing
manufacturer—distributor units in each of the cities
chosen comprised a total of sixty-three individual manu-
facturer and distributor alignments. Assessments of
competitors and evaluations of possible competitive ad-

vantages covering unit-wide efforts were requested from

 

27One recent study revealed that salesmen with 214
different distributor firms average 17 calls per week
for wheel-mounted tractor shovel-loaders. See "Con-
struction Machinery Distributors Study--l966," Construction
Methods and Equipment (New York: A McGraw—Hill Publication,
1966), p. 17.

40

men in managerial and field sales positions with both
firms in each manufacturer—distributor unit. The
following section deals with the form and content of
questionnaires used to obtain these judgments.

The Data Gathering
Instruments

 

 

Questionnaires were forwarded to seven marketing
managers and fifty-nine district representatives with the
competing tractor manufacturers. Packets containing three
questionnaires were mailed to fifty-nine managers of the
distributor firms representing the seven manufacturers in
the nine metropolitan market areas.28 Each packet in-
cluded a questionnaire for the manager and two others
which field salesmen with his firm were to complete.
Exhibits 1 through 6 in Appendix I include copies of
cover letters, instructions and questionnaires.

Each questionnaire was coded so that respondents
were identified by position, market area and manufacturer
alignment. Essentially, the questionnaires consisted of
two parts. Part A varied somewhat depending upon the re-
spondent's position. Specifically, each manufacturer
manager was asked to: (1) rank the tractor manufacturers

his firm competes against from 1 (strongest competitor)

 

28There were four instances where recently expired

contract agreements between a manufacturer and a distri-
butor were not renewed. Consequently, the sample of
distributor firms was reduced to fifty-nine from sixty-
three before the questionnaires were put in the mail.

41

to 7 (least strong competitor),29 (2) indicate which manu-
facturer he feels is his firm's strongest competitor in
each of the nine metropolitan market areas, and (3) esti-
mate the percentage of tractor sales his firm attains in
each of the nine metrOpolitan market areas (see Exhibit
3A).

Manufacturer district representatives also ranked
the tractor manufacturers from 1 (strongest competitor)
to 7 (least strong competitor). Unlike their managers
at divisional level headquarters, however, district
representatives based their ranking on competitive
strengths within the specific metropolitan market areas
they cover. The seven manufacturer marketing managers,
on the other hand, ranked the strength of competitors on
an overall or national basis. Part A of questionnaires
sent to district representatives also requested their
estimate of the percentage Of tractor sales their firm
holds in the specific metropolitan market area included
in their territory (see Exhibit 3B). Distributor managers
and salesmen were asked to select their strongest com-
petitive tractor manufacturer and estimate the percentage
of total tractor loader sales their firm enjoys within
the specific metropolitan market areas they serve (see

Exhibit 30).

 

29Although their firm is listed among the competing
tractor manufacturers, Pettibone Mulliken Corporation's
management elected not to participate.

42

It is clear that the competitive strength of the
seven tractor manufacturers rests in great measure with
their distributors. When the seven marketing managers
made their evaluative judgments they were including
not only the other manufacturers but the manufacturer-
distributor channels as well. Similarly, when district
representatives and distributor personnel identified a
manufacturer as their strongest competitor, they were
including in their evaluative judgments the competing
distributors in their market area.

In Part B of the questionnaires each manufacturer
manager compared the marketing efforts of distributors
representing his firm with those Offered by distributors
representing the manufacturer he ranked first among the
competing tractor producers (see exhibit 4A). Within each
market area district representatives compared the market-
ing efforts of the distributorship representing their
firm with those offered by the distributor representing
the competitive manufacturer they ranked first (see
Exhibit 4B). Similarly, distributor managers and salesmen
compared the marketing efforts of their firm with those
offered by the distributor firm aligned with the manu-
facturer they feel is the strongest competitor for
tractor sales in their respective market areas.

These comparisons of combined manufacturer-distri-
butor effort centered on sixty items which individually

and collectively represent the bases for competitive

43

advantages available to manufacturer—distributor partner—
ships competing for tractor loader sales. Table 1 pre—
sents an abridged version of the detailed listing and
description of these items included in Sections I through
VI of Exhibit 5, Delineation of Potential Competitive
Advantages, in Appendix I. These six sections were
identical in all questionnaires regardless of the re-
spondent's position. In effect, the respondents compared
the manufacturer-distributor partnerships in which they
take an active part with the competitive partnerships they
rated as their strongest rivals for tractor loader sales.
Although competitive product comparisons were re-
stricted to wheel-mounted tractor shovel-loaders as a
"representative" piece of heavy construction equipment,
items listed under the PRODUCT element cover a range of
features, performance capabilities and cost-related bene-
fits that are generally associated with competitive offer-
ings of many other heavy construction equipment products.
It was suggested earlier that lasting competitive
effectiveness likely results from some delicate blend of
control, influence and cooperation which may contribute
to the collective competitive strength of both partners
in manufacturer-distributor units. Many items listed
under the SERVICE, FINANCIAL, PERSONAL SELLING, PROMOTION
and PERSONNEL elements are controlled more directly by

the manufacturer than any distributor. For others the

TABLE l.--Sources of possible competitive advantage for
manufacturer-distributor units.

PRODUCT

Versatility
Durability
Mobility

Economy

Attachments

Variety

Operator Benefits
Engineering

Design

Warranty Provisions

00 mfl O\U‘I JI'LA) [\J I—’
vvvvvvvvvv

AAA/\AAAAAA

FINANCIAL

(21) Prices

(22) Credit Availability

(23) Credit Terms

(24) Service Charges

(25) Trade-in Policy

(26) Rental and/or Lease
Contracts

7) Manufacturer Support

8) Operating Capital

9)

0)

 

Cost Control
Billing

PROMOTION

(41) Sales Aids
(42) Sales Promotion
(43) Manufacturer's
Advertising
(44) Distributor Adver-
tising
45) Direct Mail
Visual Aids
Customer Referrals

46)
47)
48) Publicity
49)
50)

 

Personal Contacts
Demonstration
Proficiency

SERVICE

(11) Delivery

(12) Availability of Parts
(13) Proficiency

(14) Efficiency

(15) Customer Education
(16) Shop Facilities

(17) Customer Complaints
(18) Warranty Fulfillment
(19) Field Service

(20) Personnel

PERSONAL SELLING

 

(31) Product Knowledge

(32) "People" Knowledge

(33) Strategy Formulation
(34) Tactical Adjustment
(35) Communicative Ability
(36) Source of Information
(37) Market Knowledge

(38) Reputation

(39) Experience and Training
(40) Planning

PERSONNEL

 

(51) Executive Leadership
(52) Sales Supervision
Service Supervision
Employee Morale
Technical Assistance
Industry Relations
Manufacturer's
Representatives
Interpersonal Skills
Teamwork
Experience

AAA/\A
O‘\U1U'l U'IKJTUTKJ'IKH
O\Om NONW kw
VVV VVVVV

AAA

 

45

reverse is true. Still others are more clearly a matter
of mutual development. No attempt was made to weight
individual items or elements in terms of their impact on
purchasers of construction equipment. Likewise no at-
tempt was made to apportion reSponsibility for these
competitive "inputs" between manufacturers and distri-
butors. The objective was merely one of developing an
inclusive, if not exhaustive, list of factors that may
contribute to some measure of buyer discrimination be-
tween manufacturer-distributor units competing directly
for construction equipment sales.

The eventual list was distilled from a longer list
develOped after discussions of the research project with
industry trade association staff members, correspondence
and conversations with managerial and sales personnel with
manufacturing and distributor firms, and examination of
many company, trade association, and media studies cover-
ing various aspects of construction equipment marketing.
Several managers and salesmen with non-participating dis-
tributors critically appraised the meaning and selection
of words used in earlier drafts of the questionnaires.
Members of the Associated Equipment Distributors adminis-
trative staff also offered helpful suggestions in this
connection. The eventual form and wording of the data
gathering instruments also incorporated changes resulting
from detailed discussions of the research project, the

sampling technique, and the questionnaires with selected

46

managerial personnel experienced at both manufacturer and
distributor levels of Operation within the construction
equipment industry.

Respondents compared the marketing effort of their
manufacturer—distributor unit against the effort of the
unit they identified as their strongest rival for tractor
sales. Comparisons were made for each of the sixty bases
of possible competitive strength. Judgments were regis-
tered on a five-point scale. Gradational adjectives de-
scribing competitive advantages and disadvantages were

assigned values in the following manner:

 

 

Questionnaire Converted
Scale Scale
-2 a significant disadvantage l
—l a slight disadvantage 2
0 neither advantage nor
disadvantage (equal) 3
+1 a slight advantage 4
+2 a significant advantage 5

For example, if a respondent circled code number +1 after
contrasting the Versatility of his line of tractor shovels
with the strongest competitor's line (Item 1 in the PRO—
DUCT section), he feels his firm enjoys a slight advantage
over its strongest competitor on this particular point of
comparison. Although the negative and positive numbers

30

facilitated competitive comparisons, the analysis was

 

3ORobert Ferber, "Gradational Adjectives in Market
Surveys," Journal of Applied Psychology, (June, 1955), 73-77.

47

facilitated by converting the scale to all positive
numbers as shown above.

Six of the seven managers with the competing tractor
manufacturers were interviewed by the writer. Interviews
covered the objectives, design and methodology of the re-
search project. Each manager was asked to complete a
questionnaire and provide the names and addresses of
district representatives covering the nine metropolitan
areas for their firm. The same request was made of the
seventh manager through the mail.

Questionnaires were mailed to fifty-nine district
representatives and packets containing three question—
naires were mailed to the fifty-nine distributor principals.
Managers and salesmen with distributor firms were urged to
complete and return their questionnaires without consulting
one another regarding their evaluation of competitors and
the various components of competitive effort. Four weeks
later a second mailing of questionnaires was directed at
all non-respondents. In several cases where distributor
managers had returned their questionnaire but their sales-
men had not, letters and additional questionnaires were
forwarded to the manager requesting his cooperation in
Obtaining a complete "set" of questionnaires from his
firm. Addressed, return postage paid envelopes were in-
cluded with each questionnaire in both mailings.

Several days prior to the first mailing of question-

naires each distributor manager in the sample received a

48

letter from Mr. P. D. Hermann, Executive Director of
Associated Equipment Distributors, urging his cooper-
ation in the research project. It is very likely this
expression of interest and support from the association's
national headquarters had considerable impact on distri-
butor principals.31

In addition to the seven manufacturer managerS‘
(100%), fifty-six district representatives (94.9%),
thirty-seven distributor principals (62.7%), and seventy-
three distributor salesmen (61.8%) returned completed
questionnaires. Table 2 summarizes the overall pattern
of response to the requests for data.

Terms,fiSymbols and
Definitions

 

The following chapters include analyses of the data
and presentation of the findings. To facilitate this
discussion, and to prevent the identity of firms, indi-
viduals and specific market areas, various terms and
symbols are utilized. The following symtols are used to

denote the positions of respondents:

Symbol Position

MMGR Manufacturer Marketing Manager

MDR Manufacturer District Representative
DMGR Distributor Manager

DSM Distributor Salesman

 

31See James E. Stafford, "Influence of Preliminary
Contact on Mail Returns," Journal of Marketing Research,
(November, 1966), 410-11.

 

49

 

 

 

 

 

 

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ow m: mm m mpCOUCOQmmmlcoz

ova mm Fm mm mpcmpcoammm
"proe

m.mm :.mH :.Hm m.ws OOCESBOm unto pom

:m w , w Ha OOCLSpOm

no mm mm :H pmaamz
"mmHHHmz Usoomm

H.0m m.mm m.mm m.©s posssoom some tea

are so am we poensoom

emm was mm mm oofiaoz
"wdaaaez oases

Hmpoe cosmoamm mammmcwz mo>Hpmpcmmostm
LOpzoahpmfio mousnfippmflo poempmfim
cofipfimom

 

.mwcaafims omfimccoapmosu on oncommomll.m mqm<E

50

The letters A through G were randomly assigned to
the seven competing tractor manufacturers. In a similar
fashion the nine metropolitan market areas are identified
by the numerals 1 through 9. In the absence of anonymity
the evaluations of marketing strengths and limitations,
if they were made at all, would likely be much less candid.
With producers, distributors and market areas unidenti—
fied no firm can interpret the data for purposes of
strategy formulation in any one market area. At the same
time the data, analysis and findings remain meaningful
and useful for purposes of meeting the research Objectives.

Much of the analysis centers on scores representing
evaluations of the sixty components of competitive effort
by members of competing manufacturer-distributor align-
ments. Measures of association between these scores and
scores representing the relative competitive success Of
the competing alignments were computed. Definitions of
three terms used in measuring this competitive success
are listed below.

Strongest Competitor.——The tractor producer identi-
fied by a respondent as the most vigorous and successful
competitor his firm must contend with for wheel-mounted
tractor-loader sales.

Competitive Standing.-—An index of competitive

 

strength based on the ranking of competitors from 1
(strongest) to 7 (least strong) by each manufacturer

manager.

51

The individual ranks assigned each manufacturer
were totaled. The lowest sum designates the strongest
competitor and the largest sum designates the least
strong competitor in the collective judgment of the
manufacturer marketing managers.

Marketing Effectiveness.--An index of competitive
strength developed for each metropolitan market area based
on the collective estimates of market share.

Market share estimates by the respondents within
each manufacturer-distributor unit were averaged. These
averages designate the relative competitive accomplish-
ments of the manufacturer-distributor units within the
nine metropolitan market areas.

The Research Methodology: Comparison,
Congruency and Competitive

Strength
The data reflect judgments regarding each of the

 

sixty components of unified, on—going manufacturer-
distributor marketing alliances. Each item is a source
Of possible competitive advantage among these rival manu-
facturer-distributor units. Respondents indicated their
perceptions of how their unit compares with their strong-
est directly competitive unit on each of the sixty items.
The converted scale provided a measurement of both the
direction and intensity of these comparative judgments
ranging from a significant advantage (5) to a significant

disadvantage (1). These evaluations, along with measures

52

of the relative competitive success of manufacturer-
distributor alignments, provide the analytical framework
for attacking the research problem stated earlier in
this chapter.

A different analytical focus is developed in each
of the next three chapters. Accordingly, each chapter
includes computations based on the judgments of specific
sub-samples of respondents. Table 3 includes a condensed
description of the respondent groupings and statistics

computed for each group in the three phases of analysis.

Segmentation of the Data

The analysis progresses from an inclusive "hori—
zontal" segmentation of data, where the managerial and
field sales positions form individual samples, to "verti-
cal" segments matching respondents into competing manu—
facturer and distributor alliances. The composition of
sub-samples formed for the different phases of analysis
is discussed below.

Aggregative Analysis.--Four separate sub-samples
were formed by grouping the manufacturer managers, the
district representatives, the distributor managers, and
the distributor salesmen. The respondents' manufacturer
affiliations were disregarded.

This phase of the analysis resulted in an inclusive
profile of specific competitive advantages and disadvantages
as perceived from the four different vantage points in

manufacturer-distributor channels.

53

 

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mcfipmxpmz: m on» mo comm homunmampoe O>Hpfipmasoos OHdoomOLOHz
.msoea on one no A>H tendency
zwcfipcwpm some QOMIIQOHpmH>mQ ppmpsmpm va smCOApmcfinEoo mfimzawc<
m>HpHpOQEooz mmsmpfi om onp mo nowm pomllcmmz m>fiufipmdsooz OHdoomomomz
.m>onw mmz mm oEwm Amnv Ema
.m>onm mm: mm osmm Aumv mwzo
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IIAN+.H+.O.HI.NIV msoaosoaaomaa
owmucmopom can zosozvmsm
MQOHpmH>OQ psmpcmpm Mame: Ammv mm:
.osooa on one mo AHHH soodesov
some aoeuuAm+.H+.o.HI.muv mamaaesa
soapsnflppmfio owmusoohom mcmoz va mozz O>Hpmthmw¢
mmooosm O>Hpapmasoo
mo xmch moapwfipmpm mmaosmmunsm ommnm

 

.moapmfipmpm can mucosmmm HwOszamnm mo assessmnl.m mqm¢a

54

Macroscopic Analysis.--Each of the seven sub-samples
comprised p11_managerial and field sales personnel either
employed by or aligned with an individual tractor manu—
facturer.

For example, "Competitive Combination A" is made
up of the marketing manager with Manufacturer A, the
district representatives employed by Manufacturer A, and
the principals and salesmen with distributor firms carry—
ing Manufacturer A's tractors.

The collective evaluations that each combination
assigned various dimensions of marketing activity were
computed, ranked from highest to lowest, and compared with
"competitive standing" rankings.

Microscopic Analysis.--Sub-samples were made up Of
managerial and field sales personnel within individual
manufacturer-distributor units.

For example, "Competitive Unit Cl" includes Manu-
facturer C's marketing manager, the district representative
covering Area 1 for Manufacturer C, and the principal and
two salesmen with Manufacturer C's distributorship in Area 1.

A complete "set" of three questionnaires was obtained
from only twenty-five of the fifty—nine distributor firms.
Therefore, this is the only basis of segmentation that
does not utilize all the available data.

An approximate market share percentage was computed

for each unit. Total unit-wide scores assigned to each

55

of the sixty items of possible competitive advantage
were determined. These scores were then ranked and
compared with the unit market share figures.
Statistics and Statistical

seize.

Throughout most of the analysis mean scores repre-
sent the collective evaluation placed on each item by
sample members. Standard deviations measure the disper-
sion of their individual scores around the means. It
is perhaps unnecessary to point out that the precision of
computations performed on numerical values assigned to an
ordinal measurement scale is lessened if the successive
intervals on the scale are not equal. The intervals on
the scale used to gather data can not be viewed as equal,
but computations of these values can be viewed as meaning-
ful approximations of sample—wide evaluations.

Means computed for scores assigned to a five-point
scale are also subject to some distortion due to extreme
individual evaluations. Variations in sample sizes add
to this possibility. If the percentage of group members
selecting each point on the scale for each item were
used, distortions could be minimized. On the other hand,
this would make any comparison of the evaluations of
sixty different items by several groups nearly unmanageable.
The scale does provide some measure of the extent of per-

ceived advantages or disadvantages and, at the same time,

56

a range of only five points restricts somewhat the possi—
ble distortion imposed by extreme individual scores.

The analysis of interposition evaluations does in—
clude frequency distributions of scores assigned to each
point on the scale for each item in addition to mean
scores for each item. The frequencies are, in turn,
converted to percentages. The microscopic phase of
analysis centers on a large number of groups, but each
group includes only five men. At this point sums of the
five scores assigned each item are used for comparative
purposes.

Frequently group mean or standard deviation scores
for ten individual items are summed to obtain element
totals. For example, the sum of mean scores on items 1
(versatility) through 10 (warranty Provisions) would
represent the total weight assigned to product-related
components of competitive effort by any given segment of
respondents. Element totals, in turn, are summed to ob-
tain overall measures of the group members' perception of
their competitive relationship to their strongest rival
for tractor loader sales.

The seven firms included in the study account for
approximately 85 per cent of the total United States pro-
duction of wheel-based shovel-loaders. They do not
constitute a representative sample of all manufacturers

of heavy road-building equipment. The nine trading areas

57

were chosen as reasonably representative of the total
United States market for loaders but an additional se—
lection criterion was that all seven firms were competing
in each area. Despite these limitations it seems reason-
able to suppose that the research findings will have at
least general application within the industry. The
statistical treatment of the data must be considered in
light of these sampling restraints.

The Kolmogorov—Smirnow two-sample test and the
Spearman rank correlation coefficient,both nonparametric sta-
tistics, were applied in specific portions of the analysis.
Some of the resulting D values and rank correlation co-
efficients are cited as being statistically significant
at the .05 and .01 levels. However, any inferential ex-
tension of the results of these tests to populations
larger than the samples must rest on the tenuous assumption
that the data were obtained from a randomly selected sam-
ple of respondents from these larger populations.

The Kolmogorov-Smirnow two-sample test was utilized
in the aggregative analysis phase to test for significant
interposition differences in responses to each of the
sixty items. This test is concerned with the agreement
between the two cumulative distributions of scores assigned
to the five points on the measurement scale by the members
of two samples (positions). A large enough deviation be-

tween the two sample cumulative distributions is evidence

58

for rejecting the null hypothesis that there is no sig-
-nificant difference in the scores assigned the item of
competitive comparison by members of both samples.32

Spearman rank correlation coefficients were computed
in both the macroscopic and microscopic phases of the
analysis. In the macroscopic phase the seven "Competitive
Combinations" were ranked according to two variables. One
variable was the total score they assigned to each of the
six elements which cover all of the sixty bases of possi—
ble competitive advantage. The second variable was their
"competitive standing" score, the index of competitive
success based on the manufacturer managers' overall ranking
of tractor producers. Similarly, in the microscopic phase
the twenty-five "Competitive Units" were ranked according
to two variables. One was the sum of their scores on each
of the six elements and the other was their "marketing
effectiveness" score, or the unit-wide estimations of mar-
ket share.

The rank correlation coefficients are, of course,
measures of the association between the two variables.
Statistically significant coefficients are evidence for
rejecting the null hypothesis that the two variables under

study are not associated in the population from which the

 

32See Sidney Siegel, Nonparametric Statistics: For
the Behavioral Sciences (New York: McGraw-Hill Book
Company, 1956), pp. 127-136.

 

 

59

samples were drawn.33 The reader is reminded again that
inferences extended to a pOpulation as a result of these
statistics are not supported by the data from a non-random
sample. Despite this qualification, the statistical tests
provided considerable insight into the specific competi-
tive setting investigated. The analytical methodology
remains well within a range of rigor which meets the re-

search objectives listed previously in this chapter.

Limitations of the Study

The qualifying factors center on the above mentioned
absence of probability sampling and the application of
numerical values to an ordinal scale. There are also the
other problems, always present but sometimes underemphasized,
that surround any attempt to measure a psychological pro-
perty. Some respondents may have endorsed all items en—
thusiastically; others possibly reacted with considerable
indifference. The data collection instruments do not pro-
vide a measure of intensity of feeling or conviction. In
addition, interpretations of a "slight" or "significant"
advantage or disadvantage may have varied with the nature
of the item being compared.

The overall response rate exceeded 70 per cent.
However, nonresponse was not investigated thoroughly.
This factor, along with the implicit assumption that data

returned from the first mailing did not differ from data

 

331bid., pp. 202—213.

60

returned after the second mailing, may have introduced
some bias into the results.

Despite these inherent sampling and procedural
limitations, the three-phased analysis of the data forms
a basis for greater understanding of the multi-dimen—
sional relationship between manufacturers and distri-
butors in their combined competitive efforts. It should
be kept in mind that the design and methodology of the
study were develOped for the expressed purpose of attain-
ing research Objectives specifically related to heavy
construction equipment marketing. At the same time,
however, many of the findings appear to warrant some
application in a variety of other interfirm alliances

for industrial distribution purposes.

CHAPTER III

AGGREGATIVE ANALYSIS: COMPARISON OF
INTERPOSITION PERCEPTIONS OF

MARKETING EFFORT

The findings of all three phases of analysis con-
tribute to a better understanding of the basic research
problem. However, because each phase includes different
units of analysis, the presentation and discussion of
findings becomes more meaningful when prefaced by a
brief summary of premises which influenced the develop-
ment of the overall study.

It was suggested that despite the seemingly inherent
sources of potential conflict in channel arrangements, two
common ingredients--interdependence and mutual benefit—-
characterize nearly all interfirm distributive relation-
ships. In the absence of cooperation and complementarity
it is unlikely that any significant degree of channel-wide
efficiency could be sustained by the member firms. Like-
wise, without this efficiency it is doubtful if the de-
sired mutual benefit, in the form of profits, could be
attained. If the channel-wide division of profits is
not satisfactory, a primary reason for the initial for—

mation of the channel is removed.

61

62

From a marketing point of view then, the success
Of most channels stems from a unified direction of joint
marketing activities toward joint opportunities in given
markets. Consequently, it is not unrealistic to con-
ceptualize channels as competitive entities. Partici—
pants in any competitive setting strive to develop and
sustain a total market offering which yields lasting
allegiance from current and prospective buyers. It was
argued that when the channel, rather than individual
member firms, is viewed as the competing unit, this de-
sired allegiance may be influenced by a wide variety of
factors ranging over the entire channel-wide marketing
effort. Each of these factors is a source of potential
differential competitive advantage. Individually, or in
some combination, they constitute the principal basis for
buyer discriminations among competing sellers.

Given these premises, the research problem concerns
the relationship between intrachannel evaluations of
these potential competitive advantages and the relative
marketing effectiveness of competing channel units.
Essentially, the analysis is designed to determine if,
how, and to what extent the judgments of men in more
successful manufacturer-distributor units differ from

those of men in less successful units.l

 

1Successful unit is defined operationally in terms
of amount of market share.

63

The analysis discussed in this chapter, however,
centers on "horizontal" segments of data. More specifi-
cally, the respondents were grouped into samples corres-
ponding to the four positions they occupy in the manu-
facturer-distributor channels as shown in Table 4.

It should be noted that position, not manufacturer
affiliation, is the sole criterion for segmentation.
Consequently, this phase of analysis, unlike the "verti—

cal" phases, excludes any overall ranking or rating of

TABLE 4.--Distribution of respondents by position.

 

 

Position Number Percentage
Manufacturer Manager (MMGR) 7 4.0
Manufacturer District Repre—

sentatives (MDR) 56 32.4
Distributor Managers (DMGR) 37 21.4
Distributor Salesmen (DSM) _13 _42;2

173 100.0

 

the competing tractor manufacturers and their respective
distributor firms. It is designed to underscore various
points of comparison that tend to be viewed collectively
as advantages or disadvantages by all respondents, or by
one or more of the above segments of respondents. For

example, there are likely to be "typical" differences in
the evaluations made by managers and field salesmen, or

by manufacturer personnel and distributor personnel.

64

The questionnaires contained no reference to the
relative importance of the sixty items in terms of their
impact on people influencing or making decisions to pur-
chase tractors. This is a question which requires addi-
tional research effort beyond the scope of this study.
Likewise implications regarding any "correct" division
of control or responsibility for the various items be-
tween manufacturer and distributor personnel were care-
fully avoided. Based on the results of this study, sug-
gestions in this connection will be made later, although
this facet of channel operations was not a major factor
in the research design.

It is clear, however, that the extent of control
each respondent has over a given item, or the extent to
which he is actively involved in its development, varies
according to his position in the channel. At the same
time, these factors may condition his impression of how
important various items are in the buyer's purchase
decision process. This, in turn, may influence his
evaluation of how individual components of competitive
effort compare with the competitor's effort. This chapter
focuses on interposition patterns of agreement and dis-
agreement among these evaluations. The result is a
general profile of competitive strengths and weaknesses
as perceived from the four different vantage points

within manufacturer-distributor channels. In this

65

sense, the findings discussed in this chapter serve as

a frame of reference against which to compare the patterns
of intrachannel evaluations discussed in the following

two chapters.

Data representing the judgments of men within each
of the four positions is presented in two lengthy tables
in Appendix II. Table 1, Competitive Comparison Item
Response Percentages, indicates the percentage of re-
sponses assigned to each point on the scale for each of
the sixty items. These percentages are shown for all
four samples. Frequency distributions corresponding to
these percentages are shown in Table 2, Responses to
Competitive Comparison Items. Table 22 also includes
the mean and standard deviation of values assigned within
each sample to each item. After the scale was converted,
the numbers 1, 3, and 5 correspond to -2, 0, and +2 on
the questionnaire scale. These means may be viewed as
approximate measures of the collective evaluation placed
on each item by men within each of the four samples.

If all members of a given sample felt their firm
enjoyed a significant advantage over their leading
competitors on one of the sixty items, the sample mean
for this item would, Of course, be 5.000. Unanimity at
the other end of the scale would yield a sample mean
of 1.000. A mean of 3.000 represents the point of

equality, where neither advantage nor disadvantage

66

exists in the collective opinion of men making up the
sample. Sample mean scores greater than 3.000 repre-
sent items where there is general agreement among the
men in a given position that they enjoy a competitive
advantage on these points of comparison. Similarly,

items viewed as disadvantages would have sample mean

scores less than 3.000.

Table 2 in Appendix II includes four means for
each of the sixty items. These are, of course, means
of the scores assigned the item by men in each of the
four positions. The number of individual scores varies
from seven in the case of manufacturer managers (MMGR)
to seventy-three in the case of distributor salesmen
(DSM). A sample mean in excess Of 3.000 for one of the
product-related items in Section I of the questionnaire
denotes generally widespread agreement among sample
members that their product enjoys an advantage on this
particular item. The point that needs emphasis, however,
is that not all these men compared the same two brands
of tractor loaders. Each man compared his product to
the product offered by the competitor he rated as the
strongest rival for tractor sales. Consequently, a
sample mean greater than 3.000 implies that the predomi-
nant view among ell_men in the sample, although they
represent seven competing tractor manufacturers, is
favorable toward their ppp_product in terms of the item

being evaluated.

67

"Universal" Appraisals of
Competitive Components

 

 

Sample means were compared to determine the extent
of interposition congruency among judgments of the
competitive strength of individual items. As Table 2
in Appendix II shows, all four mean scores for some
items were either greater than 3.000 or less than 3.000.
The appraisal of these items was "universal" in that
there was general agreement among all respondents, re—
gradless of their position within the channel or their
manufacturer affiliation. Listed below in Table 5 are
the items that were "universally" perceived as sources
of competitive advantages.

These figures clearly suggest that a very sizeable
percentage of the respondents feel that their product is
better than competitive products in a number of different
ways. Eight of the ten items making up the PRODUCT ele—
ment of total marketing effort are included in this table.
The other item in the table, Warranty Fulfillment, was
listed in the SERVICE section of the questionnaires, but
it is nonetheless directly related to product comparisons.

A widespread, product-oriented perception of com—
petitive strength is not surprising in this particular
competitive setting. The variety of uses and operating
requirements most heavy construction equipment must meet
makes this an obvious necessity. Furthermore, a number

of studies have shown that industrial goods producers

68

 

 

 

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0000
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200 0020 002 0022

 

.mowmpcm>pm o>090pmdsoo =00m0o>0£5= mo mommmll.m mqm<e

69

place considerable emphasis on the product facet of
their total market offering.2

What is somewhat surprising, however, is the ex—
tent Of strength associated with these items while not
one of the non-product facets of marketing effort was
accorded "universal" appraisal as a competitive advan-
tage. For example, the high mean scores on Engineering,
Design and Operator Benefits characterize the marked
emphasis on product features. Response frequencies in
Table 2 in Appendix II reveal that sixty men, more than
one-third of the total number of respondents, indicated
their product enjoys a "significant advantage" in Engi-
neering over its strongest rival. Fifty-two men made
the same judgment on Design. Forty-seven men viewed the
Operator Benefits of their tractor as "significant ad—
vantages," while only twelve felt their product compares
unfavorably on this basis, and only one of these was con-
sidered a "significant disadvantage."

Clearly, this segment of "universal" appraisals
suggests that competitive advantages tend most frequently
to be viewed as synonymous with product superiority. It
is doubtful, however, if product superiority alone is
synonymous with any lasting competitive superiority that

these tractor manufacturers and their distributors might

 

2See, for example, Jon G. Udell, "How Important
Is Pricing in Competitive Strategy?," Journal of Market-
ing, (January, 1964), 44-48.

 

7O

enjoy. Their relationship combines the design, develop-
ment and production of tractors with the variety of
activities that promote, distribute, sell and service
these tractors. Five of the six sections in Part B of
the questionnaires covered nonproduct elements of market-
ing effort. Yet not only were items listed under these
elements excluded from the ranks of "universal" advan-
tages, but several of them were assessed as "universal"
disadvantages as Table 6 indicates.

All four sample mean scores were less than 3.000
for each of these eleven items. In this case the con-
sensus of opinion among all respondents was that their
respective manufacturer—distributor units compare un-
favorably with the strongest rival units in terms of
these eleven points of comparison. Despite the fact
that most of these items are primarily distributor
activities backed by varying degrees of support or
assistance from the manufacturers, they were generally
viewed as disadvantages by personnel at both levels of
operation.

All elements except PRODUCT and PERSONAL SELLING
are represented at least once in Table 6. Five of the
items are included under PROMOTION, which clearly sug-
gests that channel-wide comparisons of the items in this
area tended toward the negative side of the scale. These
relatively low mean scores presumably reflect the dis-

content at all levels with the way such factors are

71

 

 

 

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00000000000 00

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000000000000 00

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000u00 000u00 000uzv 00nzv 0000
200 0020 00:2

 

.mowmpcm>00000 o>0000¢dsoo =00m0m>0cs= mo mommmll.0 m0m<e

72

handled. Distributor firms with a tractor account
participate in cooperative advertising with an average
of four different suppliers, one of which is the tractor
producer they represent. Direct mail campaigns are con—
ducted by more than 80 per cent of the manufacturers and
85 per cent of the distributor firms in this industry.3
Of the two FINANCIAL items included among the "uni-
versal" disadvantages, the presence of Trade-in Policy on
this list is perhaps more notable than Operating Capital.
Most men, probably mindful of the cost and profit con—
straints affecting their operations, tended to take a
negative View of Operating Capital as a potential ad-
vantage. On the other hand, the firms' trade-in policies
would appear to be a more likely basis for competitive
differentiation. One study revealed that buyers of con-
struction equipment talk with at least three distributors
before a major equipment purchase; buy from five differ-
ent distributors in a typical year; and give more than
one-half their business to the top firm among these five.
Trade—ins occur in about one—half of these purchases.

These facts not only suggest that trade-in policies can

 

3"Manufacturer/Distributor Advertising Practices,"
Construction Equipment News, (June, 1963), 20-2U.

u"Construction Buying," A Summary of Findings
from a Research Study by Construction Equipment and
Materials (New York: A Conover—Mast Publication,
l96é7} p. 7.

 

 

73

be an important factor in purchase decisions, they point
out the potential profit for manufacturer-distributor
units capable of developing lasting allegiance among
customers and prospects.

Several items among the "universal" bases of com—
petitive disadvantage seem somewhat incongruous with the
top priority assigned to product—related items included
in Table 5. Two items in Table 6, Customer Education and
Demonstration Proficiency, would appear to correspond
closely with the heavy emphasis placed on Engineering,
Design, Operator Benefits and other product-related
strong points listed among the "universal" advantages.
District representatives, often key men in arranging and
conducting demonstrations, tended to take a particularly
dim view of item (50), Demonstration Proficiency, as the
mean score of 2.696 shows. Fourteen men, 25 per cent of
the district representatives, felt they had a "significant
disadvantage" in this activity.

Another area of inconsistency surrounds the concen-
tration toward the negative end of the scale on Avail-
ability of Parts, Shop Facilities and Service Super-
vision despite the general agreement that Warranty Ful-
fillment is an area of decided advantage. These would
not appear to be mutually exclusive features of effective
manufacturer—distributor efforts. As might be expected,

the mean scores for distributor personnel were higher

7”

on these items. Still the "universal" negative appraisals
of these and the other items in Table 6 imply that the
aggregative evaluation of several items that seemingly
would contribute most to claims of product superiority
tended to be on the low side.

Comparing mean scores for all four positions re-
vealed "universal" appraisals of twenty different items,
nine as advantages and eleven as disadvantages. Thus
there was considerable interposition congruency among
the evaluations of one-third of the total list of sixty
items of potential competitive advantage.

"Particular" Appraisals of
Competitive Components

 

Further inspection of sample mean scores reveals
several instances where the evaluations of men in one of
the four positions resulted in a mean score notably
different from the other sample means. These "particular"
appraisals emphasize the more pronounced difference of
opinion men in one position may have about a given item
of comparison. The mean score representing their col—
lective opinion may be greater than or less than 3.000,
but the important point is its position on the scale
relative to the other mean scores. Table 7 lists the
mean scores for competitive advantages (A) and dis-
advantages (D) that were given "particular" appraisals

by each group of respondents.

75

TABLE 7.-—"Particular" appraisals of competitive advantages

and disadvantages.

 

Position Mean Scores

 

 

 

 

 

 

MMGR MDR DMGR DSM
SERVICE
19 Field Service 3.32“ (A)
FINANCIAL
22 Credit
Availability 3.u29 (A)
23 Credit Terms 3.u29 (A)
27 Manufacturer
Support H.000 (A)
28 Operating
Capital 2.1u3 (D)
29 Cost Control 2.286 (D)
PERSONAL SELLING
32 "People"
Knowledge 3.422 (A)
36 Source of
Information 3.219 (A)
37 Market
Knowledge 3.056 (A)
38 Reputation 2.429 (D)
A0 Planning 3.181 (A)
PROMOTION
A3 Manufacturer's
Advertising 3.286 (A)* 2.135 (D)*
AA Distributor
Advertising 2.A29 (D)
A7 Customer
Referrals 3.1U3 (A)
PERSONNEL
5“ Employee
Morale 2.911 (D)
55 Technical
Assistance 2.528 (D)
57 Manufacturer's
Representatives 2.167 (D)
59 Teamwork 3.278 (A)

 

*Note that this item is viewed as decidedly advan-

tageous by MMGR's, but decidedly disadvantageous by DMGR's.

76

As is evident from an inspection of the scores,
there was some tendency among the respondents to code
higher values on the activities or factors closest to
their own operational contributions. At the same time,
men in the two managerial positions accounted for seven
of the eight items viewed as disadvantages. Manufacturer
managers tended to assign low scores to items more di-
rectly influenced by distributor managers. Distributor
managers reciprocated with particularly low mean scores
on three items covering contributions of manufacturer
personnel. For example, the relatively high mean score
assigned Manufacturer's Advertising by manufacturer mana-
gers is offset by the distributor managers' negative
evaluation of this item. Distributor Advertising, in
turn, was assessed as a decidedly unfavorable point of
comparison by managers with the competing manufacturers.
Only one man in this group indicated his distributor
firms have an advantage over their competitors on this
item.

The pattern of manufacturer manager mean scores
for the five FINANCIAL items deserves special notice.
From this vantage point the availability and terms of
credit in equipment purchases were viewed as advantages
as the scores for items (22), (23), and (27) indicate.
However, mean scores for both distributor managers and

salesmen on all three of these items, although not

77

shown in Table 7, were less than 3.000. At the same
time, manufacturer managers assigned very low scores
to Operating Capital and Cost Control, two items in—
volving financial management at the distributor level.5

In Chapter II district representatives were de-
scribed as key links in the two-way flow of information
and communication between manufacturer management and
distributor personnel. These men are in a position of
considerable importance in terms of the inter—related
marketing efforts of manufacturers and distributors.
Consequently, the 2.167 mean score for distributor mana—
gers on item (57), Manufacturer's Representatives, is
the most alarming figure in Table 7. When distributor
manager mean scores for each of the sixty items are
ranked from highest to lowest, this item ranks fifty-
ninth! The only item with a lower mean score is Manu-
facturer's Advertising.

There appears to be a general industry-wide lack
of consensus among manufacturer managers, distributor
managers and district representatives themselves as to
what is, or ought to be, the specific role of the con-

struction equipment manufacturers district representatives.

 

5The current President of AED recently provided some
insight into possible reasons for these differences of
Opinion, at least from the distributors' point of view.
See Robert G. Arnold, "Distributor Credit Needs New Ap-
proagh," Construction Equipment News, (September, 1967),
12-1 .

 

78

Contrast, for example, the contention that the primary
assignment of a district representative is "simply to
maximize sales of his product line in his district"6
with ". . . it's a D.R.'s Job to give salesmen better
working knowledge of his product."7 Clearly these
statements suggest quite different functions and re-
sponsibilities.

Only slightly less surprising than the low assess—
ment of manufacturers' representatives by distributor
managers was their low mean score for item (55), Techni-
cal Assistance. Application and engineering advice may
come from district representatives or other factory men,
but the 2.528 figure represents a generally negative
appraisal of this component of joint competitive effort
among distributor managers. This evaluation is also not
consistent with the relatively high scores assigned pro—
duct-related items of comparison by the distributor
managers.

Half the figures listed in Table 7 represent manu—

facturer managers sample scores that varied notably from

scores for the other three positions. Because of the

 

6John w. Nugent, "Don't Sell Your D. R. Short,"
Construction Equipment News, (December, 1965), 16. This
is a very perceptive discussion of the favorable influence
district representatives can have on manufacturer—distri-
butor relations.

 

7"A D. R. Talks About His Job," Construction
Equipment News, (April, 1958), 12.

 

79

small size of this sample, comparison of interposition
perceptions of marketing effort has up to now focused on
mean scores. Means are sufficient approximations of
points on the scale which represent a consensus of opinion
among sample members. However, it is possible that the

distribution of individual scores across the five values

 

on the scale within each sample could be quite different
and still result in sample mean scores with very little
difference between them. This is especially the case
among the three larger samples.

The Kolmogorov-Smirnow two-sample test was used to
determine the extent of these intersample differences in
distribution that were not uncovered by an inspection of
sample mean scores. This test, which treats the scale
as an ordinal, rather than numerical, measurement device,
is sensitive to any kind of intersample differences in
the distribution of scores from -2 to +2 on each item.
The relevant statistic for the test is D, the maximum
difference between the cumulative distribution of scores
of both samples. A large enough deviation between the
cumulative distributions is evidence for rejecting the
null hypothesis that there is no difference in the scores
assigned the particular item by members of both samples.
The sampling distribution of D is known and the proba—
bilities associated with the occurrence of values as

large as an observed D have been tabulated.8

 

8Siegel, op. cit.

80

The following sample comparisons were made for
each of the sixty items:

Manufacturer District Representatives and

Distributor Managers
Manufacturer District Representatives and
Distributor Salesmen

Distributor Managers and Distributor Salesmen,

The fourth sample, Manufacturer Managers, was excluded
because of its small size. Table 8 lists the items under
each two-sample comparison with statistically significant
D values at the .05 and .01 levels.

The results of this series of two—sample comparisons
yielded one specific and one general finding not uncovered
by sample mean comparisons. The specific finding con—
cerns the variance in perceptions of item (36), Source of
Information, between district representatives and distri—
butor salesmen. This item covers the reporting of competi-
tive activities and other relevant data to management.
There can be little doubt about the potential contribution
to improved channel-wide marketing activity that field men
with manufacturers and distributors can make in this con-

9

nection.

Â¥

9For an excellent discussion of this topic, see
Frederick E. Webster, Jr., "The Industrial Salesman As a
Source of Market Information," Business Horizons, (Spring,
1965), pp' 77-820

 

81

TABLE 8.--Items with statistically significant D values.

 

 

Samples Level of
Compared Element Item Significance
MDR-DMGR Promotion A3 Manufacturer's
Advertising .05
Personnel 57 Manufacturer's
Representatives .Ol
MDR-DSM Personal 36 Source of Infor—
Selling mation .05
DMGR-DSM Product 5 Attachments .05
6 Variety .05
8 Engineering .05
10 Warranty Provisions .01
Service 11 Delivery 001
19 Field Service .05
Financial 21 Prices .01
25 Trade-in Policy .05
26 Rental &/or Lease
Contracts .05
27 Manufacturer Support .05
Personal 31 Product Knowledge .05
Selling 33 Strategy
Formulation .01
3A Tactical Adjustment .Ol
35 Communicative
Ability .05
37 Market Knowledge .05
Personnel 52 Sales Supervision .05
5A Employee Morale .O5
59 Teamwork .Ol

60 Experience .01

 

82

The more general finding concerns the differences
in perception between distributor managers and their
salesmen when the comparison centered on cumulative
distributions of their scores across the five-point
scale. When considered in this context their appraisals
of the items listed in Table 8 were not as congruent as
the sample mean scores suggest. However, there undoubtedly
were some differences in the interpretation of "slight"
and "significant" among respondents. This would account
for some variance in the distribution of scores between
-2 and +2, so these intersample differences are not as
pronounced as they may appear. Variations in the inter-
pretation of "slight" and "significant" also effected
mean scores, of course, but the "particular" appraisals
discussed earlier included only those mean scores that
are decidedly greater or less than the three sample means
for a given item.

An Empirical Interpretation of Potential
Competitive Advantages

 

This phase of the analysis focused on similarities
and differences in the collective evaluations of sixty
items of potential competitive advantage by men at four
different positions in the channels. It should be remem—
bered that the data represent their judgments of the
relative, not absolute, strength of each of these items.

Respondents compared the marketing effort of their

83

manufacturer-distributor unit with the competitive effort
of the unit they believe to be its strongest rival for
tractor loader sales. When mean scores are viewed as
measures of the evaluations of group members as a whole,
some conclusions may be drawn regarding the potential of
given areas of marketing effort as sources of competitive
advantage.

The data clearly indicate that there is ample
opportunity for increasing the effectiveness of many
items. This point is underscored by the fact that, when
all four mean scores for each item are considered, sixty
of the 2A0 scores were less than 2.800.

In the context of this aggregative analysis, several
items were accorded "universal" appraisal as competitive
advantages. These items, listed in Table 5, would seem
to have somewhat’limited potential as sources of favorable
competitive differentiation because of the widespread
feeling among all the competing tractor marketers that
their product is superior on these bases of comparison.
These product-related items may be the most important
points of consideration among buyers, but the fact re—
mains that these advantages are to some extent "neu-
tralized" by the enthusiastic, industry—wide emphasis on
product comparisons as the sole basis of success. By

the same token, items accorded "universal" appraisal as

8A

disadvantages, listed in Table 6, represent the greatest
potential for improved, differentiated competitive
activity.

"Universal" appraisals--both positive and negative
——accounted for one-third of the sixty items of potential
competitive advantage. The more pronounced differences
in evaluations of the remaining forty items were dis-
cussed in the previous section. From an empirical point
of view then, the potentiality of many of these items is
second only to the items in Table 6 as sources of favor-
able competitive differentiation. Channel-wide evalu-
ations at the positive end of the scale on more of these
nonproduct components of competitive effort may contri-
bute to greater degrees of marketing effectiveness.
Subsequent phases of the analysis deal further with this

relationship.

Summary of Aggregative Analysis

The analysis of "horizontal" segments of data re-
sulted in a profile of specific advantages and disad-
vantages as perceived by managers and field sales per-
sonnel with the competing producres and distributors
of tractor shovel-loaders. Individual evaluations of
the competitive strength of sixty components of market-
ing effort were indicated on a scale ranging from a
significant disadvantage to a significant advantage.

These evaluations were aggregated into samples comprised

85

of men in each of four positions in the manufacturer-

distributor channels. Points on the scale representing

the prevalent judgment among sample members on each item

were approximated by sample means.

A comparison of sample means for each of the

sixty items revealed:

(1)

(2)

(3)

(Li)

(5)

(6)

a very pronounced and widespread emphasis

on product-related items as bases of com—
petitive advantages,

a generally unfavorable evaluation of several
items or activities that contribute directly
to the effective development and maintenance
of these product—related advantages,

a segment of eleven items perceived as com-
petitive disadvantages from all four vantage
points within the channel,

a particularly notable difference of opinion
between managers at the manufacturer level and
managers at the distributor level regarding
financial aspects of their relationship,

a surprisingly negative assessment of the
contribution of manufacturers' representatives
by distributor managers accompanied by,

a generally negative opinion of personal
selling efforts at the distributor level

among manufacturer personnel, and

86

(7) that some priorities may be placed on various
categories of items in terms of their relative
potentialities as sources of favorable com-

petitive differentiation.

CHAPTER IV

MACROSCOPIC ANALYSIS: CORRELATES OF
COMPETITIVE STANDING AMONG
MANUFACTURER—DISTRIBUTOR

COMBINATIONS

The analytical focus in this chapter is on seven
"vertical" segments of data formed by aggregating the
respondents according to their manufacturer affiliation.
Each segment--or manufacturer-distributor combination—-
includes all respondents who are involved in marketing
the same brand of tractors. In this macroscopic context,
the respondents are active at various points in the
marketing channels through which the competing tractor
producers reach buyers in all nine market areas. Their
evaluations provide a comprehensive framework for assess-
ing the relative strengths of components of marketing
effort as perceived from all positions and all locations
within the seven competing distributive networks.

Table 9 lists the combinations as A through G,
the letters randomly assigned to the seven competing
tractor manufacturing firms. It also indicates the size
and composition of each combination. Grouping the re-
spondents into these segments provides a framework for

87

88

TABLE 9.--Composition of Competing Manufacturer-
Distributor Combinations.

 

 

 

Respondents
Combination
Per—
MMGR MDR DMGR DSM Total centage

A l 8 5 12 26 15.0

B l 9 7 l“ 31 17-9

E l 8 7 13 29 16.8

G l _2 _§ .2 .35 _l§;2

7 56 37 73 173 100 0

 

considering the basic research question regarding intra-
channel agreement and its relationship to the marketing
effectiveness of channels. Judgments regarding the sixty
points of comparison by men within each manufacturer-
distributor network reflect detailed appraisals of the
joint marketing efforts offered by the seven manufacturers
and their respective distributor firms.

Specifically, this phase of the analysis centers on
the degrees of competitive strength assigned the various
items by respondents within the seven combinations and
measures of the extent of agreement among combination
members in their evaluations of the sixty bases of possi-
ble compteitive advantage. In keeping with the inclusive
framework of comparison used in this second phase of the

analysis, both of these variables are correlated with a

89

measure of the overall "competitive standing" of the
seven tractor producers.

An index of this "competitive standing" was com-
puted from the rankings assigned by managers in Part A
of their questionnaires. Each manager ranked his com—
petitors from 1 (strongest) to 7 (least strong). These
rankings were linearly adjusted to range from 1 to 6
following the decision not to participate by management
of the eighth firm originally included in the study.
Table 10 indicates the rankings assigned each competitor
by the manufacturer managers. It also shows the sums of
the six ranks assigned each manufacturer.

The close agreement among managers on the relative
overall standing of competitors is reflected in the
significantly low Kendall coefficient of concordance.
This coefficient, which is essentially an index of the
difference between perfect agreement among the managers
and the actual agreement shown in Table 10, was .OOOA.
Given this low coefficient, the rank order of the sums
assigned each competitive firm may be viewed as the best
estimate of the "true" ranking of the overall competi-
tive stance each of the tractor producers presents.1
The rank order of these sums is indicated in the bottom

row in Table 10.

 

lSiegel, OE. cit., pp. 229—238.

90

TABLE 10.--Ranking of competitors by MMGR's.

 

 

 

Competitors
MMGR
A B C D E F G
A -- l 3 5 2 6 A
B 5 -- 2 A l 6 3
C 5 l -- A 2 6 3
D A l 3 -- 2 6 5
E 5 l 2 3 -- 6 A
F 6 l 3 A 2 —- 5
G A 1 3 5 2 6 --
Total 29 6 16 25 ll 36 2A
Rank.Order
of "Com-
petitive_ V _ ,_ .. , _ , 3 A
Standing" 6 l 3 5 2 7 A

 

As a check of this ranking of competitors, the
assessments of competitors by manufacturer district repre-
sentatives were also considered. Part A of their question-
naires requested a similar 1 to 7 ranking of the competi—
tive standing of the tractor producers within their re-
spective market areas. When the rankings assigned each
firm in each of the nine areas were summed, the overall
23922 of the total scores for the manufacturers was the

2

same as that shown in Table 10. This is not to say

 

2Interjudge reliability among the MDR's within
each area was also significant as the following Kendall

91

that the identical order prevailed in each market area,
but it does clearly suggest that there is close agree-
ment throughout the industry regarding the relative
"competitive standing" of the seven rival firms.

The mean and standard deviation of values assigned
each item by members of each combination were computed
and are shown in two tables in Appendix III. These mean
scores represent the competitive advantage or disadvan-
tage combination members as a group feel they have for
each item relative to the strongest competitive effort
each of them selected as the unit of comparison. As was
the case for the mean scores computed for the aggregative
analysis in the preceding chapter, 3.000 represents
equality or the mid-point between an advantage and a
disadvantage. Table l in Appendix III, Manufacturer-
Distributor Combination Mean Scores, lists for each
combination the mean score for each item, totals of the

ten mean scores within each element, and a composite

,‘

 

coefficients of concordance indicate:

 

Area MDR's KOO
1 6 , .0018
2 5 .OOA3
3 7 .0057
A 7 .OA37
5 6 .0018
6 7 .0201
7 5 .0000
8 6 .0018
9 7 .OlA5

92

total which is the sum of the six element mean score
totals. Table 2 in Appendix III, Manufacturer—
Distributor Combination Standard Deviation Scores, lists
the standard deviation associated with each item mean
score. Likewise, element and composite totals are

shown for these statistics. Because they are measure-
ments of the dispersion of individual scores around the
combination mean scores, these standard deviations indi-
cate the extent of agreement among the men affiliated
with each manufacturer regarding their appraisals of
each item of competitive effort.

Elements of Marketing Strength and
Competitive Standing

 

Within this macroscopic context the relationship
between perceptions of marketing activity and the rela-
tive effectiveness of competing manufacturer-distributor
alliances is discussed primarily in terms of the evalu—
ations placed on elements (as Opposed to individual
items) of marketing effort by the seven combinations.
Element totals are sums of the mean scores assigned the
ten items comprising each of the six elements. While
these totals are not precise measures of the collective
opinion of combination members, they are reasonable
approximations of the perceived competitive advantages
or disadvantages managerial and field sales personnel

in each combination attached to the six broad components

93

of their joint manufacturer-distributor marketing
efforts.

The index of competitive standing is similarly
only an approximation of the manufacturing firms' over—
all marketing effectiveness. For example, Table 10
indicates that there was complete agreement that Firm
B is the strongest competitor among the seven firms.
There was also close agreement regarding the second and
third ranked firms, E and C. However, sums of the ranks
assigned G, D and A suggest that these competitors are
viewed as closely matched in terms of their overall
competitive standing. Obviously F's total of 36 compared
to B's total of 6 does not imply that the latter was
Judged to be six times "stronger" than the former. The
sums of individual ranks in Table 10 are approximate
' measures of the firms' relative overall competitive
standing in the collective opinion of both the seven
manufacturer managers and the fifty—seven district repre-
sentatives.

Table 11 shows element mean score totals for each
combination. These totals are taken from Table 1. in
Appendix III which includes mean scores of the values
circled on each item by all respondents within each
combination. When element totals are taken as approxi-
mate measures of perceived advantages or disadvantages,

a total of 30.000 is comparable to the 3.000 used when

9U

 

 

 

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95

comparing individual item mean scores. In other words,
an element total greater than 30.000 indicates the mean
scores of items rated as advantages (greater than 3.000)
more than offset any mean scores of items viewed as dis—
advantages (less than 3.000). Likewise, an element
total less than 30.000 implies that the consensus of
opinion among men comprising the manufacturer-distributor
combination is that their strength in this area of
marketing effort compares unfavorably with the offerings
of strongest competitors. These totals are approximate
measures because of the lack of precision surrounding
computation of scores assigned the values on an ordinal
scale.

A notable feature of these totals is the dispro—
portionate Spread of perceived "advantages" (totals
greater than 30.000) both across the six elements and
between the seven combinations. Out of forty-two ele—
ment totals, only thirteen or 31 per cent represent
"advantages"; twenty-nine totals or 69 per cent repre-
sent "disadvantages." The PRODUCT element accounts for
seven of the thirteen totals which exceed 30.000, which
means there is widespread agreement among men selling
each of the competing tractors that their product line
is competitively superior to all others. When PRODUCT
totals are excluded only six of the remaining thirty-

five totals are greater than 30.000.

96

Although the mean score totals for product-related
items exceeded 30.000 for every combination, the collec—
tive Judgments of men in Combinations A, C, D, F and G
yielded element totals less than 30.000 for all five of
the other areas of marketing effort. Only one element--
PERSONAL SELLING--was viewed as an area of competitive
advantage by more than one combination. Totals for each
of the remaining four elements show only one combination
with a total greater than 30.000. Furthermore, two of
these figures, Combination E's FINANCIAL total of 30.558
and PERSONAL SELLING total of 30.518, indicate that
competitive advantages attributed to these areas are not
too substantial.

Combination B's element totals correspond closely
with the top ranking accorded this firm by managers with
the competing tractor producers. Judgments regarding the
sixty points of competitive comparison by respondents
throughout Firm B's distributive network resulted in the
largest totals among the seven combinations for five of
the six elements of marketing effort. Even more notable
is the extent of advantages these men feel they enjoy in
these areas, particularly SERVICE, PERSONAL SELLING and
PROMOTION. For example, the range of the seven totals
representing assessments of service-related bases of
comparison is not quite 17 points, yet Combination B's
total of 41.386 exceeds the second highest total, Combi—

nation D's 29.158, by over 12 points. With the

97

exception of the FINANCIAL total of 29.801, element
totals for Combination B average better than No.000.
This margin of competitive strength is reflected in the
row of element composite score totals at the bottom of
Table 11.

The reader is again reminded that with the ex—
ception of the seven manufacturer managers, each re—
spondent selected the strongest competitive manufacturer—
distributor team in his particular market area as the
unit of comparison regarding the sixty items of possible
competitive advantage. Therefore one interpretation of
the figures in Table 11 would be that they merely suggest
that a large percentage of respondents in Combinations A,
C, D, E, F and G selected B's distributors as their
strongest competitors and that these men, regradless of
the manufacturer they represent, rather consistently
assigned competitive disadvantages to the items of com-
parison with the PRODUCT area being the single exception.
Firm B was in fact selected as the strongest competitive
manufacturer by 88.6 per cent of the 1&2 respondents
representing the other six tractor manufacturers. It
is also true that element totals resulting from their
evaluations of competitive effort do not vary signifi—
cantly.

This is, however, an incomplete interpretation

of the data in Table 11. It overlooks a significant

98

point. Men in Combination B, along with all their com-
petitors, tended to View their tractors as superior.

In fact their PRODUCT score of 39.678 was the highest
among all seven combinations for this element. This

is hardly surprising in that these men represent the
manufacturing firm that is widely recognized as the
industry leader. What is surprising, however, is the
fact that against an industry-wide belief in product-
related items as sources of competitive advantage the
men in Combination B collectively evaluated the SERVICE,
PERSONAL SELLING, PROMOTION and PERSONNEL elements as
sources of greater competitive advantages than they
attributed to the PRODUCT element! To be sure the
totals for these four elements do not exceed the total
of product-related item mean scores by much. Never-
theless, this pattern of perceived competitive advantages
is strikingly opposite to the conventional appraisals of
marketing effort characterized by a "better" product and
the infrequent association of advantages with any of the
other areas of comparison.

Table 10 lists the seven tractor producres from
one to seven in terms of their overall competitive stand-
ing in the opinion of all the manufacturer managers and
district representatives that took part in the study--
the measure of marketing effectiveness for this macro-

scopic phase of analysis. Table 11 lists approximate

99

measures of the competitive advantages or disadvantages
assigned the six components of marketing effort by men
throughout the distributive networks of each of the
seven manufacturers. The totals in both these tables
substantiate Firm B's position of leadership in this
competitive setting. The pattern of consistent and
decided advantages that men throughout this firm's
distributive network feel they enjoy is quite clear.
However, the relationship between assessments of the
various elements of marketing effort within the other
manufacturer-distributor combinations and the positions
assigned these manufacturers in the ranking of overall
competitive standing is not nearly as obvious.

In order to examine this relationship more closely
the totals for each element and the composite totals
listed in Table 11 were ranked from 1 (highest total)
to 7 (lowest total). Distribution of the rank order
of these scores across the seven manufacturer—distributor
combinations is shown in Table 12. The column labeled
"Competitive Standing" in Table 12 shows the ranks of
total scores resulting from the individual rankings
assigned each of the manufacturing firms and is identi—
cal to the bottom row in Table 10. The seven sets of
ranks representing the combinations"scores for each
element and the composite totals of these scores were

each correlated with the set of ranks representing the

100

TABLE l2.-—Rank correlation of combination element mean
score totals and competitive standing.

 

 

 

Rankings

o

:>

H C.‘ H 0) 0H
. m H o m p 4Jb0
Combination p m H asa) -H c -H *4:
o o o as: p c m 43H
3 H s OH 0 0 OH WU
U > m wri E m an: CLQ
o p c bra o p 843 ECU
$4 (D or! (DC) $4 (1) OO 04-3
m m m mm m m OB (M)

A 5 7 7 6 5 7 7 6
B 1 l 2 l 1 l l l
C 3 A 6 3 3 3 3 3
D 7 2 A 7 A A A 5
E 2 3 l 2 2 2 2 2
F 6 5 5 5 7 6 6 7
G A 6 3 A 6 5 5 A

Spearman Rank Correlation Coefficients:

Product .893**
Service .6A3
Financial .679
Personal

Selling .858*
Promotion .893*
Personnel .929**
Composite

Total .929**

 

*Significant at .05 level.
**Significant at .01 level.

101

overall competitive standing of the seven participating
tractor producing firms. Spearman rank correlation co-
efficients indicating the degree of association between
these variables are shown at the bottom of Table 12.

Certainly a positive rank correlation between
these sets of scores would be anticipated. This is
particularly true in light of the method used for
"measuring" the marketing effectiveness of the seven
tractor producers in this macroscopic context. Clearly,
the overall competitive standing scores reflect approxi-
mate rather than precise measures of this variable.
Likewise the numerical evaluations of intracombination
perceptions of competitive advantages and disadvantages
were computed from values assigned to points on an ordinal
scale. Although ranking these scores removes some of
the exactness the numerical figures falsely suggest, the
rank order of these scores does not reflect the closeness
of some of the mean score totals in that the range is
substantially reduced and differences among scores
equated.

Five of the seven correlation coefficients may be
viewed as statistically significant bases for rejecting
the null hypotheses that these specific variables are
not associated in the population from which the sample
was drawn. However, the advisability of such an in-

ferential extension of this interpretation is limited by

102

the sampling procedure. Nevertheless the degree of
association is both considerable and consistent across
all elements of marketing effort. The coefficients
clearly signify that among the men participating in this
study, respondents positioned throughout the distributive
networks of manufacturing firms generally viewed as hav-
ing stronger overall competitive positions attributed
greater degrees of competitive strength to all elements
of joint manufacturer-distributor marketing efforts.

To put it another way, whether an element was per-
ceived as a source of competitive advantage (PRODUCT) or
disadvantage (SERVICE, FINANCIAL, PERSONAL SELLING, PRO-
MOTION, PERSONNEL) by men in all or nearly all of the
seven combinations, the rank order of scores approxi-
mating the extent of these perceived advantages or dis-
advantages corresponds closely with a rank order of scores
approximating the overall marketing effectiveness of the
seven manufacturing firms.

Perceptual Congruency Within
Competing Combinations

 

 

The mean scores considered in the previous section
represent different points on a scale ranging from 1
(significant disadvantage) to 5 (significant advantage).
They approximate the consensus among the managers and
field sales personnel within each of the seven combinations.

Comparison of mean scores provided a basis for examining

103

the patterns of perceived competitive strengths and
weaknesses across the major areas of marketing effort.
Mean scores do not, however, reflect the closeness of
intracombination agreement regarding these evaluations.
To argue that Combination B's higher mean scores for
five of the six elements implies closer agreement among
the respondents representing this manufacturer is to
misinterpret these statistics. There is no reason to
presume, on an a priori basis, that higher mean scores
are accompanied by lower standard deviation scores, or
vice versa.

In this section standard deviations are tabulated
and ranked in the same manner as means were in the pre—
vious section. Standard deviations, of course, are
measurements of the dispersion of the individual values
coded on a given item by sample members. In this sense
they reflect more specifically the differences in per-
ceptual congruency within the seven manufacturer-distri-
butor combinations. Obviously the lower the standard
deviation for any item, the closer the agreement among
sample members' assessments of the item as a source of
competitive advantage or disadvantage.

The standard deviation scores for each item are
listed in Table> 2 in.Appendix III. When scores for
the ten items comprising an element are summed, the

totals are approximate measures of the extent of

10A

intracombination perceptual congruency regarding evalu—
ations of the six areas of marketing effort. These six
totals, along with composite totals, are shown for each
manufacturer—distributor combination in Table 13. Combi-
nation B has the lowest totals for three of the six ele—
ments, namely PRODUCT, PERSONAL SELLING and PROMOTION.
Combinations D and F have the lowest totals for the
SERVICE and PERSONNEL elements. The fact that Combination
E's composite total is less than B's is accounted for by
the wide margin of difference in their totals for the
FINANCIAL element.

Comparing the mean totals in Table 11 with the
standard deviation totals in Table 12 does not reveal
any pattern of consistency among the "sets" of scores for
all seven combinations. For each combination the six
element mean score totals (ranked from highest to lowest)
were correlated with the six element standard deviation
totals (ranked from lowest to highest). The following
Spearman rank correlation coefficients indicate the degree
of association between these two variables for each

combination:

105

 

 

 

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106

 

' Combination S399
A .658
B .372
C .658
D -.028
E .372
F -.A28
G -.31A

It is evident from these coefficients that respondents
in some combinations, notably A and C, tended to agree
more closely when assigning relatively higher scores to
items; respondents in other combinations, especially F
and G, agreed more closely when assigning relatively
lower scores to items.

In any event, the more relevant question with re-
gard to these totals concerns the correlation between
standard deviation totals and the "competitive standing"
of the seven tractor producers. Specifically, is there
closer agreement regarding the competitive strength of
all items among respondents throughout the distributive
networks of the manufacturing firms deemed to be stronger
overall competitors? An answer to this question is pro-
vided in Table 1A. The format for showing ranks and
correlation coefficients computed from element standard
deviation totals in Table 1A is identical to that used

for element mean score totals in Table 12. Of course the

107

TABLE lA.--Rank correlation of combination element standard
deviation score totals and competitive standing.

 

 

 

Rankings

8
Competitive g .-4 g ‘3', £3 33' w
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B l 2 7 l l 2 2 1

C 2 A 2 6 3 5 3 3

D 6 1 3 5 6 7 5 5

E A 3 l 2 2 3 l 2

F 5 5 6 A. 7 l 6 7

G 7 6 5 7 A 6 7 A

Spearman Rank Correlation Coefficients:

Product .500
Service .500
Financial .lA3
Personal

Selling .358
Promotion .965**
Personnel .036
Composite

Total .715*

 

*Significant at .05 level.
**Significant at .01 level.

108

rank order of standard deviation totals is the opposite
of that used to rank the mean score totals. The ele-
ment and composite totals in Table 13 were ranked from
1 (lowest total) to 7 (highest total). Each of these
seven sets of ranks was then correlated with the set of
ranks representing the overall competitive standing of
the seven participating tractor manufacturers. The
resulting Spearman rank correlation coefficients are
shown at the bottom of Table 1A.

Clearly these coefficients are not nearly as pro-
nounced as those computed from the mean score ranks.
They do, however, suggest that respondents throughout
the distributive networks of the competitively "stronger"
tractor producing firms tended to agree more closely in
theirindividual evaluations of items than respondents
representing the firms judged to be "weaker" overall
competitors. This was particularly the case with items
included in the PRODUCT, SERVICE and PROMOTION areas, as
well as a measure of the overall agreement surrounding
all sixty items of joint manufacturer-distributor market-
ing effort. The statistical significance attached to
the correlation coefficients for two of these variables
is, of course, subject to the previously discussed quali-

fied interpretation of the sampling procedure.

109

Dimensions of Competitive Effectiveness

 

There can be little doubt that Firm B and its distri-
butor firm in each of the nine metropolitan market areas
comprises the most effective manufacturer-distributor net—
work in the opinion of a large majority of men located
throughout the other six networks included in the study.
Men marketing Firm B's line of tractors obviously agree
with this judgment. Their evaluations of the sixty items
resulted in scores representing significant advantages in
nearly all areas of combined manufacturer-distributor
marketing effort.

The extent of this perceived competitive strength
is clearly underscored by the data in Table 15, which
shows frequency and percentage distributions of item mean
scores among the seven combinations. Figures for Combi-
nation B show that "advantages" were assigned to fifty-
four, or 90 per cent, of the items. Nearly half of
Combination B's item mean scores exceeded A.000, while
evaluations among all the other six combinations resulted
in only five item mean scores this large. Examination of
item mean scores listed in Table l in Appendix III re—
veals that B is the only combination with a score greater
than 3.000 for twenty-two different items. These items,
which account for 36.7 per cent of the sixty separate

3

bases of comparison, are listed below:

 

3This list includes nine of the eleven items
categorized as "universal" competitive disadvantages
in Chapter III.

110

 

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111

Element Item

SERVICE Availability of Parts
Customer Education

ShOp Facilities

AAA
IHFJH
Ocn ounn)

FINANCIAL Operating Capital

Billing

ttttttI—‘E erwuow DON

PERSONAL SELLING Strategy Formulation
Source of Information
Market Knowledge
Experience and Training

Planning

O\D\10\UU

AAA/\A
VVVVVVVV VVVVV VV VVV

PROMOTION Sales Aids

Manufacturer's Advertising
Distributor Advertising
Direct Mail

Visual Aids

Customer Referrals
Publicity

Personal Contacts

AAAAAAAA

PERSONNEL Executive Leadership
Service Supervision
Teamwork

Experience

O\OUU}—’ \OCDNOU'l-II'UUH

AAAA
C\U"|U'IU'I
VVVV

A recent study indicated that sales effort, includ-
ing sales management, personal selling, advertising and
other promotional programs, were perceived as the most
important elements of competitive strategy formulation
by managers with A85 manufacturing firms.“ Of course no
attempt was made to determine the degree of importance
that members of the competing combinations attached to

the sixty items, but the favorable differentiation men

 

“Jon G. Udell, "The Perceived Importance of the

Elements of Strategy," Journal of Marketing, (January,
1968), 3A—A0.

 

112

affiliated with Firm B feel they enjoy is particularly
strong in these areas of marketing effort.

Only six out of the sixty item scores for Combi-
nation B are below 3.000 and hence may be classified as
"disadvantages." Five of these are listed under the
FINANCIAL element. The low scores for items (23),

Credit Terms, (25), Trade~in Policy and (26), Rental and/
or Lease Contracts, are not nearly as notable as the
2.A67 score for item (27), Manufacturer Support, and the
1.733 score for item (21), Prices. There is only one
figure lower than Combination B's score for Prices among
the A20 item mean scores in Table l. in Appendix III.

All nine respondents on the manufacturer level in
Combination B circled -1, or "slight disadvantage," after
comparing their product line prices with those of their
strongest competitors. Four distributor principals and
seven distributor salesmen circled -2, or "significant
disadvantage" on this item. Furthermore, Combination

B's mean score for item (27), Manufacturer Support, is
the lowest among the seven combination scores for this
item--2.A67. Only six of the thirty-one men representing
the manufacturing firm rated as the strongest overall
competitor evaluated this item as a source of competitive
advantage.

The data suggest that the competitive dominance of

Firm B and its allied distributor firms in this macroscopic

113

context results from consistent and considerable channel-
wide strength in the SERVICE, PERSONAL SELLING, PROMOTION
and PERSONNEL area of joint manufacturer-distributor
marketing effort. If competitive effectiveness is merely
a matter of offering a "better" product at the "best"
price it is not likely that the margin of leadership
accorded Firm B by participants in this study would be

so pronounced. There were widespread claims of product
superiority among all_manufacturer and distributor per-
sonnel and men aligned with Firm B viewed the comparative
product line prices of the seven competitors as the most
significant source of disadvantage. In contrast to these
negative appraisals on this point, men in Combinations

E (3.A83) and G (3.667) feel they have decided price ad-
vantages in addition to favorable product-related points
of comparison. Clearly, nonproduct and nonprice dimen-
sions of marketing effort account for substantial contri-
butions to the competitive effectiveness of Firm B and its

network of distributors.

Summary of Macrosc0pic Analysis

 

The analysis of seven "vertical" segments of data,
each representing the collective judgments of the manager,
district representatives, distributor principals and
field salesmen affiliated with one of the competing
tractor producers provided some insight into the relation—

ship between perceptions of marketing effort and the

11A

relative effectiveness of competing manufacturer-
distributor alliances.

The perceived advantage or disadvantage associated
with each of the sixty items by members of each manu—
facturer-distributor combination were approximated by
mean scores. The closeness of agreement, or perceptual
congruency, regarding these advantages and disadvantages
was reflected in standard deviations computed from the
individual values assigned each item by all respondents
in each combination. Mean and standard deviation scores
were correlated with "competitive standing" scores com-
puted from the rankings assigned to competitors by mana-
gers with the seven manufacturing firms. The index of
"competitive standing" provided an estimate of the manu—
facturing firms' overall marketing effectivness.

Analysis of the segments of data representing
appraisals of competitive effort by men in the seven
manufacturer—distributor alliances revealed:

(1) a pattern of perceived advantages across five

of the six major elements of marketing effort
among men in Combination B,

(2) a concentration on product-related items as
sources of competitive strength among men in
all of the combinations,

(3) a large number of items which represent points

of comparable competitive strength among five

(A)

(5)

(6)

115

of the combinations in that appraisals of
these items, relative to Combination B's
effort, yielded five mean scores which were
quite close,

a positive correlation between intracombination
evaluations of competitive strength in all six
elements and measures of the overall "competi-
tive standing" of the rival tractor producing
firms,

a tendency toward closer agreement in the
assessment of both competitive advantages and
disadvantages among men in the distributive
networks of manufacturing firms rated as
stronger overall competitors, and

a profile of competitive effectiveness charac-
terized by nonproduct and nonprice dimensions

of differentiation.

CHAPTER V

MICROSCOPIC ANALYSIS: CORRELATES OF
MARKETING EFFECTIVENESS AMONG
MANUFACTURER-DISTRIBUTOR

UNITS

This chapter includes a discussion of the third
and final phase of analysis. The focus is on twenty-
five manufacturer-distributor units, the competitive
entities formed by the tractor producing firms and
their distributors in the nine metropolitan competitive
settings. While manufacturer-distributor combinations
were viewed as marketing channels in a macroscopic
sense, manufacturer-distributor units may be viewed as
marketing channels in a microscopic sense in that each
of these units includes only those respondents who in-
fluence a given tractor manufacturer's competitive
strength in a single metropolitan market area.

These micrOSCOpic segments of data reflect the
advantages or disadvantages associated with the sixty
bases of competitive differentiation by five men. These
men exert varying degrees of influence on many facets

of the coordination, c00peration and communication

116

117

which contribute to the marketing effort of a specific
manufactuer-distributor unit. From "top to bottom" in
the "vertical" alignment of the two firms, they are
the division level sales or marketing manager with the
manufacturing firm, the district representative in the
given area, and the principal and two field salesmen
with the distributor firm which carries the manufacturer's
line of tractors in the area.

Completed questionnaires were returned from each
of these men in twenty—five of the fifty-nine manufacturer-
distributor units studied. Consequently this phase of the
analysis, unlike the macrosc0pic phase, excludes some of
the data. The twenty-five units account for 107, or 61.8
per cent, of the 173 men who participated in the study.
The number and percentage of respondents in each of the
four positions who are included in this microscopic

phase are shown below.

 

 

 

Position N (Macro) N (Micro) Percentage
MMGR 7 7 100.0
MDR 56 25 AA.6
DMGR 37 25 67.5
DSM _7_3_ _s_o. .6312

173 107 61.8

The twenty-five units comprise a total of 107 instead of
125 men because the seven manufacturer marketing managers

were considered to be members of the unit their firm

118

comprises with its distributor in each of the nine
metropolitan competitive settings. The reason for this
classification is the responsibility men in this posi-
tion have for maintaining an informed and aggressive
sales effort throughout the network of distributor oper-
ations in reaching a national market.

The numbers 1 through 9 were randomly assigned to
the nine market areas, just as the letters A through G
were used to conceal the identity of the manufacturing
firms. Therefore the manufacturer-distributor unit
identified as C1 includes Firm C's marketing manager
(MMGR), the district representative covering Area 1 for
Firm C (MDR), and the manager (DMGR) and two field sales-
men (DSM) with the distributor firm which serves as C's
exclusive distributive outlet throughout Area 1. Table
16 shows the distribution of the twenty-five units across
the nine metropolitan market areas. As an example of
the "multiple memberships" accorded the seven marketing
managers, it should be noted that the appraisal of market-
ing effort by Firm C's marketing manager is included in
three of the units-—Cl, C8 and C9.

Grouping the respondents into these segments pro-
vides a framework for additional consideration of the
basic research question regarding intrachannel agreement
and its relationship to the marketing effectiveness of
channels. The four respondents operating at the "local"

level in each group identified the unit they feel is the

119

TABLE l6.--Distribution of competing manufacturer—
distributor units.

 

 

Area Units Number Percentage
1 C1,El 2 8.0
2 B2,F2 2 8.0

A3,B3,D3,E3,G3 5 20.0
AA,BA,EA 3 12.0

5 D5 1 A.O
6 G6 1 A.0
7 B7,G7 2 8.0
8 B8,C8,E8,F8 A 16.0
9 A9,B9,C9,E9,F9 _§_ _gglg
25 100.0

 

Strongest rival their unit competes with for tractor

sales in this area. Values assigned to each of the sixty
items by these men reflect their perceptions of the

source and extent of differences in the competitive ef-
forts of these directly competing manufacturer—distributor
units. Each of these segments of data was supplemented

by the scores assigned to the sixty items by the appropri-
ate division level marketing manager. Unlike the men in
the other positions, these managers did not confine their
comparisons of marketing effort to a single market area.
They compared the combined marketing efforts of their

firm and all its distributors with those offered by

120

their strongest rival tractor producer and all the
distributor firms carrying this competitive line of
tractors. The scores these managers assigned each of
the items were determined within this more inclusive
frame of reference. The resulting patterns of scores
for each of the twenty-five units reflect perceptions
of marketing effort among five men who contribute to a
given manufacturer's success in a given metropolitan
market area.
Following a format comparable to that used in
analyzing the macrosc0pic segments of data, this phase
of analysis centers on the degree of competitive strength
assigned the items of comparison. It also centers on
measures of the extent of intra-unit agreement regard-
ing the advantages or disadvantages associated with each
basis of possible competitive differentiation. Likewise
both of these variables are correlated with a measure of
the "marketing effectiveness" of the twenty—five units.
An index of this "marketing effectiveness," based
on the respondents' estimates of market shares, was
developed for each metropolitan market area. Estimates
of the share of the market for wheel-mounted tractors
with shovel-loaders that their firm enjoys in each of
the market areas were made by the marketing managers with
the seven manufacturing firms. District representatives,

distributor managers, and field salesmen also estimated

121

the share of the market for tractor shovel—loaders in
their respective areas which is accounted for by sales
of their brand of tractors. The estimates made by all
173 respondents were first divided into nine groups,
each group including assessments of market shares within
a marketing area. Each of these groups was further
divided into seven groups representing the estimates of
the share of tractor sales held by each manufacturer in
the marketing area. An average of the estimates of
market share enjoyed by each manufacturer in each market
area was computed. In three instances where the seven
average market share figures for a single area exceeded
100 per cent, each figure was adjusted downward by a
percentage equal to the amount by which the original
total exceeded 100 per cent. Although the use of aver-
ages introduces some obvious limitations, these figures
approximate the relative competitive accomplishments of
the manufacturer—distributor units within the nine metro—
politan market areas.

In the preceding chapter means and standard devi-
ations were computed from segments of data representing
the competitive advantages and disadvantages associated
with the six elements or areas of marketing effort. The
focus in this chapter is on a larger number of segments,
but each segment reflects the judgments of only five re-

spondents. Therefore raw score totals are used as

122

descriptive devices to compare perceptions of competitive
strength associated with the six elements of marketing
effort by members of each manufacturer-distributor unit.
Specifically, for each unit the five scores assigned
each item were totaled. The totals for the ten items
comprising each of the six elements were summed to ob-
tain total scores for each element. Tables 17 and 18
show totals of the scores assigned to each of the ele-
ments of marketing effort by members of each unit.

Table 19 includes the composite scores, or sums of the
six element totals, for these twenty—five units along
with the market share approximations discussed above.

Element Evaluations Among Competitive
Units

 

When unit total scores rather than means are viewed
as approximations of the extent of favorable or unfavorable
strength assigned to the six areas of marketing effort,
the range of possible total scores for each element ex-
tends from 50 to 250. If all five men in a unit assigned
"significant disadvantages" (l) to all ten items included
in the element, an element total score of 50 would re-
sult. If, on the other hand, there was complete agree-
ment that a "significant advantage" (5) is enjoyed on
each of the ten points of comparison, the resulting ele-

ment total score would be 250.

123

TABLE 17.--Competitive unit element score-totals--
product, service and financial.

 

Unit Code Product Service Financial

 

Score Score Score
Cl 188 1A1 1A0
El 152 1A9 160
B2 186 216 15A
F2 156 132 117
A3 171 15A 1A8
B3 192 20A 135
D3 1314 158 155
E3 1’49 1145 150
G3 173 120 1A1
A” 160 13A 13),;
BA 20A 211 1A9
EA 179 126 152
D5 1A5 129 126
G6 193 125 1A2
B7 197 196 1A3
G7 1A3 11o 1A2
B8 200 229 1u7
08 181 157 155
E8 196 1A1 1A2
F8 187 136 1A9
A9 16A 121 1AA
B9 203 206 171
c9 187 151 156
E9 180 1A0 1AA

F9 156 125 1AA

 

12A

TABLE l8.--Competitive unit element score totals--
personal selling, promotion and personnel.

 

 

Unit Personal Promotion Personnel
Code Selling Score Score
Score

Cl 157 ‘ 155 150
El 1A8 132 160
B2 206 21A 206
F2 139 119 131
A3 1A2 123 13A
B3 201 193 195
D3 156 139 157
E3 1A5 137 151
G3 1A1 123 13A
AA 1A0 1A0 1A3
BA 208 196 217
EA 15A 1A9 1A5
D5 122 115 122
G6 117 120 1A5
B7 189 193 19A
G7 119 117 130
B8 198 202 202
C8 1AA 1A8 1A9
E8 1A2 15A 1A7
F8 1A5 115 13A
A9 135 121 133
B9 208 212 216
C9 129 1A1 122
E9 153 151 150

F9 125 119 133

 

125

TABLE 19.--Competitive unit composite score totals and

market share percentages.

 

 

Composite Market Share
Unit Code Score Percentage
Cl 931 2A
E1 911 18
B2 1183 30
F2 82A 5
A3 872 2A
B3 1120 25
D3 899 6
E3 907 27
G3 832 5
AA 851 8
BA 1185 25
EA 915 23
D5 759 7
G6 8A2 3
B7 1112 - A9
G7 761 3
B8 1178 A2
C8 93A 23
E8 922 19
F8 866 2—
A9 818 A
B9 1216 35
C9 886 21
E9 918 18
F9 802 l

 

126

An element total score of 150 is the midpoint of
the scale ranging from 50 to 250 and hence, by definition,
is the "neutral" point. However, given the limited pre-
cision of these totals as measures of perceived advantages
and disadvantages, the range of element totals between
1A1 and 159 was arbitrarily defined as a "neutral zone."
Total scores equal to or greater than 160 represent
favorable unit-wide comparisons or "competitive advan-
tages"; total scores equal to or less than 1A0 represent
unfavorable comparisons or "competitive disadvantages."

There are six element scores for each of the twenty-
five units, or 150 separate totals in Tables 17 and 18.
Forty-seven of these totals represent advantages with
scores ranging from 160 to 229; forty-six of these totals
represent disadvantages with scores ranging from 110 to
1A0. The remaining fifty-seven totals fall within the
range of scores indicating reasonably comparable competi-
tive strengths--the "neutral zone."

The strong tendency among all respondents to view
product-related points of comparison as sources of decided
advantages resulted in ineteen, or 76 per cent, of the
twenty-five unit totals for the PRODUCT element which
equal or exceed 160. Only one unit score, D3's total of
13A, fell within the range of scores which represents
an unfavorable comparison of product lines. Scores

assigned the PRODUCT element by members of the four

127

units in Area 8 are typical. Unit B8's total of 200 is
the largest, but Unit E8's total of 196 is nearly as
great. Members of the other two units in this area, C8
and F8, also feel their line of tractors is competitively
superior as the scores of 181 and 186 indicate. These
figures are especially interesting because fourteen of
the fifteen men included in units C8, E8 and F8 compared
their tractors with those produced by Firm B. Although
B8 was a near unanimous choice as the strongest competi-
tive unit in this area, members of the other three units
regularly assigned competitive advantages to their own
product lines.

As might be expected in light of findings dis-
cussed in the previous chapter, scores representing com-
petitive advantages in the nonproduct areas of marketing
effort are almost exclusively accounted for by the six
units formed by Firm B and its distributor firms in
Areas 2, 3, A, 7, 8 and 9. The extent of advantages men
in these units--covering six different metropolitan
market areas--associate with nonproduct related activi—
ties is clearly underscored by the figures in Table 20.
This table lists all nonproduct element totals which are
significantly high or low enough to represent advantages
or disadvantages.

The six units mentioned above are the only units

with totals representing advantages for the SERVICE,

128

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129

PERSONAL SELLING and PROMOTION elements of marketing
effort. The forty—five totals in Table 20 which indi-
cate disadvantages show considerable range in both a
numerical and a geographical sense. That is, not only
are there considerable differences in the degree of
unfavorable comparisons, but the members of one or
more manufacturer—distributor unit in at least six of
the nine areas associate disadvantages with each of
these elements except FINANCIAL.

There are two points regarding the B units' pattern
of element totals that deserve special mention. The
first point concerns the extent to which the competitive
advantages these men assigned to nonproduct areas of
marketing effort rather consistently exceeded advan-
tages assigned to their product line. When PRODUCT totals
are compared with SERVICE, FINANCIAL, PERSONAL SELLING,
PROMOTION and PERSONNEL totals for each of these six
units separately, this point is substantiated. Nineteen
of the thirty nonproduct totals are greater than the
corresponding product-related figure. The notable ex-
ceptions are totals for the FINANCIAL element which
leads to the second point.

In an industrial setting where the expression,
"He's buying 'price,' and I'm selling 'quality,'" is
frequently used by salesmen to describe the difficulties
they encounter with a prospective buyer of heavy equip-

ment, the competitive limitations most men in these six

130

units associate with prices, credit and other facets
of the financial relations between manufacturer and
distributor take on added meaning. The association
between perceived advantages in this area, as well as
other areas of marketing effort, and marketing success
is examined further in the following section.
Competitive Advantages and
Market Shares

Perceived competitive advantages and disadvantages
regarding the various elements of marketing effort were
correlated with a measure of overall competitive standing
in the macroscopic phase of analysis. Means, standard
deviations and the rank order of scores assigned the
seven rival tractor producing firms were used to measure
these associations in a macroscopic context. The micro-
scopic segments of data provide for additional exami-
nation of the relationship between intrachannel evalu-
ations of marketing effort and the degree of marketing
effectiveness enjoyed by the channel.

The measure of marketing effectiveness in this
microscopic context is, of course, the approximate per-
centage of area-wide markets for tractor loaders held
by each of the twenty-five manufacturer-distributor
units as listed in Table 19. This table also includes
the unit composite totals, which are totals of the ele-

ment scores shown in Tables 17 and 18.

131

The extent of perceived advantages among men in
the B units is clearly borne out by the composite score
totals for these six units. They are the only four
digit totals listed in Table 19. Likewise four of the
five largest market share percentages listed in this
table are accounted for by B units. The relationship
between element score totals and market share figures is
quite clear so far as these six units are concerned.
However, the extent to which higher scores on all of
the six elements correspond with higher market shares
among the other manufacturer—distributor units is not
so obvious.

To determine the degree of association among these
variables, figures in each of the columns in Tables 17,
18, and 19 were ranked from 1 (highest) to 25 (lowest).
The rank order of these element totals and market share
figures is shown in Tables 1 through A in Appendix IV.

A Spearman rank correlation coefficient was computed to
indicate the degree of association between the set of
scores for each element, and the set of composite scores,
and the market share percentages. These coefficients
along with the respective r2's, which indicate the vari-
ance in common between the two variables, are listed

below.1

 

1If the tenuous assumption regarding the randomness

of these samples is accepted, all of these coefficients
except the .269 figure may be considered statistically
significant at the .01 level.

132

Element _s_§_c_g 33
Product .619 .383
Service .819 .670
Financial .269 .072
Personal Selling .765 .585
Promotion .8A8 .719
Personnel .727 .528
Composite .8A7 .717

The indication is clear that the greater the share
of tractor sales accounted for by a manufacturer-distri-
butor unit, the greater the scores assigned to items in-
cluded in all major elements of marketing effort except
the FINANCIAL area. Conversely, members of units which
account for smaller shares of total tractor sales in
their metropolitan market areas feel their efforts in
nearly all areas of combined manufacturer-distributor
marketing activity compare unfavorably with the efforts
of their strongest competitive units. The influence of
sample-wide assessments of product—related items as
sources of competitive advantages was somewhat signifi-
cant in that the coefficients for the SERVICE, PERSONAL
SELLING, PROMOTION and PERSONNEL elements are all
greater than the coefficient for the PRODUCT element.
These larger coefficients suggest that differences in
perceptions of nonproduct areas of comparison may be

more reliable than differences in perceptions of product

133

comparisons insofar as their predictive capacity in
accounting for differences in the marketing effectiveness
of these manufacturer-distributor alliances.

The relatively low coefficient for the FINANCIAL
element is partially explained by the decided disad-
vantages members of the six units involving Firm B
regularly associated with items (21), Prices, (25),
Trade-in Policy, and (27), Manufacturer Support, which
includes rental and credit arrangements between manu-
facturer and distributor. The point that deserves
emphasis in this connection is that managerial and
field sales personnel in these units appear to have
effectively developed and maintained greater allegiance
than most of their competitors from buyers often de-
scribed as "price and product conscious." Data repre—
senting the judgment of men participating in this study
strongly suggest the sources of this allegiance cover a
wide range of competitive inputs.

The total scores used to determine the correlation
between perceptions of competitive strengths and market
share figures do not reflect the extent of intra-unit
agreement regarding these strengths. For example, the
pattern of values circled on a given item of comparison
by members of two competing units might be as follows:

Unit #1 3 l 3 3 5

Unit #2 3 3 3 3 3

13A

The total score for each unit is 15, but there is ob-
viously closer agreement among members of Unit #2 in
arriving at this evaluation. When the range of intra-
unit scores assigned an item is viewed as an expression
of the closeness of agreement, the "maximum" agreement
would be, of course, a range of zero--perfect agreement;
"minimum" agreement would be a range of four in that two
of the men circled values at Opposite ends of the scale.
These two cases are illustrated in the example above.
Because the data do not warrant a more refined
treatment, this facet of analysis centered on these
ranges as measures of intra-unit agreement. The range
of scores assigned each of the sixty items by members of
the twenty-five units were computed. These figures were
totaled for each element, just as total element scores
were determined. The totals are rough approximations of
the extent of agreement among unit members in their ap—
praisals of the six elements of marketing effort. The
twenty—five totals for each element, and composite totals,
were ranked from 1 (lowest) to 25 (highest). The set of
ranks representing intra—unit agreement on each element,
as well as the composite measures of agreement, were
correlated with the corresponding set of ranks repre-
senting total scores assigned to each element and a

composite total score.

135

The Spearman rank correlation coefficients listed
below indicate the degree of association between "high"
agreement and "high" scores on each element among mem-

bers of the twenty-five manufacturer-distributor units.

Element 9599 33
Product .528 .278
Service -.033 .001
Financial .168 .028
Personal Selling .A07 .165
Promotion .A99 .2A9
Personnel -.188 .035
Composite .A02 .161

These coefficients indicate some tendency toward closer
agreement when scores were nearer the "advantage" end
of the scale. The higher PRODUCT element coefficient is
not too surprising in that a majority of respondents,
regardless of manufacturer affiliation or geographic
location, circled larger values on items listed in this
section of the questionnaire.

A more relevant point of concern is whether or not
members of units with greater measures of effectiveness--
larger market shares--agree more closely in their evalu-
ation on the various areas of marketing effort. The
intra-unit agreement ranks were also correlated with
market share ranks. The association between these vari-

ables is expressed by the following coefficients.

136

Element 9999 33
Product .675 .A55
Service .0A0 .001
Financial .236 .556
Personal Selling .363 .131
Promotion .597 .366
Personnel .037 .001
Composite .A99 .2A9

Three of the figures, .675, .597 and .A99, are sufficient
evidence for rejecting the null hypotheses that these
variables are not related in the population of which
these units are a sample (at the .01 level of signifi-
cance). Because the samples were not randomly selected
in the strict sense of the word, such an inference is
perhaps unwarranted. Furthermore, as was pointed out
earlier, patterns of scores in this phase of the analysis
are used as descriptive devices to highlight trends rather
than precise measurements. However, the coefficients do
suggest that there is some tendency among members of
manufacturer-distributor units accounting for larger
market shares to agree more closely in their assessments
Of advantages and disadvantages associated with major
elements of their joint marketing effort.
Unit Element Scores as a Basis
for "Channel Audits"
Grouping element scores for all units associated

With a single manufacturing firm provides a framework for

137

isolating and identifying "soft spots" in marketing
efforts throughout the distributive network formed by

this firm and its distributor firms in the major market
areas. In this sense comparisons of unit element scores
become inputs for "auditing" the perceptions of advan-
tages and disadvantages in six areas of marketing activity
within several geographical competitive settings.

If an element total of 150 is arbitrarily defined
as a "neutralized" effort for any given element, totals
greater or less than 150 indicate the extent of perceived
advantages or disadvantages attributed to this element
by members of the different manufacturer-distributor units.
Marketing and sales managers with the manufacturing firms
may scan the scores for totals that are unusually high or
low relative to other totals within an area, or relative
to totals for the same element in all the other areas.
Unusual unit element scores may then be investigated
further in terms of individual scores assigned to the
ten separate items comprising each element by both manu-
facturer and distributor personnel.

In Table 21 element scores for the twenty—five
units discussed throughout this chapter are shown in
seven groups, each including the units aligned with one

of the rival tractor producing firms.

 

138

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139

Five examples of the managerial insight that might
result from "channel audits" based on element scores are

briefly described below.

Example #1

 

Appraisal of the SERVICE element by members of
Unit A9 resulted in an exceptionally low score. This
total of 121 is low relative to the other element scores
for this area--except PROMOTION which was equally low.
More importantly, it is well below the SERVICE scores
in Areas 3 and A, the only other areas for which data is
available from personnel representing Firm A.

Closer examination revealed that particularly low

scores were assigned by all five men to the following

items:
(12) Availability of Parts
(15) Customer Education
(16) Shop Facilities-—the district representative
and both salesmen assigned "significant dis-
advantages" to this item.
(19) Field Service
Example #2

 

The SERVICE element score for Unit EA is comparable
to the revelation discussed in Example #1. The 126 total
for this element is not only much lower than SERVICE
totals in other areas, it is the lowest score assigned

any element in all five market areas.

1A0

The notably low item scores contributing to this

element total of 121 were:

(11) Delivery--there was decided disagreement
between the distributor principal and his
salesmen on this item.

(12) Efficiency--scheduling and completion of
service and repair work were viewed as a

source of disadvantages by all unit members.

Example #3

Comparisons of PERSONAL SELLING items made by men
in Unit F9 resulted in a score of 125 which compares un-
favorably with scores assigned this element by Units F2
and F8. Although none of the ten items was viewed as a
source of competitive advantage, marked disadvantages
were associated with the following items:

(36) Source of Information

(37) Market Knowledge

(38) Reputation

(39) Experience and Training

(A0) Planning

Of particular significance is the fact that the
manager with this distributor firm, which is a new
account with Firm A, viewed gll_of the items in this
element as sources of significant disadvantages! Clearly

there is a need for further information and more direct

1A1
communication between managers of the two firms compris-

ing this unit.

Example #A

 

The slight competitive disadvantage members of
Unit C1 attributed to the FINANCIAL element first ap-
peared to be primarily accounted for by unit-wide low
scores on item (28), Operating Capital. However, fur-
ther investigation revealed that the managers (MMGR and
DMGR) rated item (27), Manufacturer Support as a slight
advantage, but field personnel with both firms (MDR and
DSM) viewed this item as a source of significant dis-

advantage.

Example #5

 

The pattern of scores across all six elements for
Unit D5 indicates both widespread and significant com—
petitive disadvantages confront Firm D in Area 5.

Especially disturbing is the consistency with which
low scores were assigned nearly all items by all five men
within this unit. This is perhaps emphasized most strongly
by the scores for items (31), Product Knoweldge, the

sine qua non of personal selling efforts in the heavy

 

construction equipment industry, and (37), Market Knowl-
edge, which concerns awareness of growth accounts in the
area and key individuals within these accounts. Both
these items were rated as slight or significant dis-

advantages by all five men!

1A2

There are some obvious limitations to using data
in this form for "channel auditing" purposes. It under-
scores variances in perceptions of competitive effort,
but it does not disclose reasons for these variances.

It assumes identical evaluative processes among all men
making the comparisons. It assumes that the six elements
of marketing effort are equally influential in terms of
their impact on prospective buyers, although adjustments
in this connection can be incorporated by management.

Table 21 includes data from all twenty—five units.
Marketing and sales managers with any one of the seven
manufacturing firms would normally not have data from
competitive units made available to them. They must
focus on data representing perceptions of competitive
effort among members of manufacturer-distributor units
within their own distributive networks. Nevertheless
periodic analyses of data cast in this form could become
a frame of reference for developing improved allocations
of channel-wide efforts which reflect the relative com-
petitive strengths and limitations confronted in various
geographic market settings. The strength of such "channel
audits" is their specificity—-specific items, elements,
areas, individuals and competitive firms are all units
of analysis that may provide further insight into condi-
tions surrounding the marketing effectiveness of a manu—

facturer—distributor competitive unit in a given market

area.

1A3

Summary of Microscopic Analysis

The analysis of twenty-five "vertical" segments of
data, representing perceptions of marketing effort among
five men who influence a given tractor manufacturer's
competitive strength in a single metropolitan area,
focused on the relationships between measures of these
perceptions and approximations of market shares held by
the manufacturer-distributor units.

Scores assigned each source of potential competitive
advantage by unit members were summed and listed as ele-
ment total scores. Measures of the extent of intra-unit
agreement regarding the advantages and disadvantages
associated with the six areas of marketing effort were
also computed. Analysis and comparison of the twenty-
five intra-unit appraisals of marketing effort and the
corresponding measures of marketing effectiveness-~area
market share percentages--revealed:

(l) a not unexpected pattern of perceived com-
petitive advantages across nearly all facets
of marketing activity among members of the
six units involving Firm B,

(2) a significantly large number of scores indi—
cating the SERVICE, PERSONAL SELLING, PRO-
MOTION and PERSONNEL areas were viewed as
sources of decided disadvantages within
units competing against the B units in nearly

all market areas,

(3)

(A)

(5)

1AA

a high degree of association between intra-
unit assessments of competitive strengths

in all six elements and the share of area-
wide markets for tractor sales held by the
competitive units,

a lower but not insignificant degree of
positive correlation between intra-unit
agreement or perceptual congruency and
marketing effectiveness, and

a technique utilizing unit element scores,
in the form of "channel audits," as the
basis for improved strategy formulation and
tactical adjustment designed to "individual-
ize" the total market offering of manufacturer-
distributor units in various competitive

settings.

CHAPTER VI

A SUMMARY OF THE STUDY: RESULTS

AND RECOMMENDATIONS

This research effort dealt with the nature of
differential advantages and marketing channels as inte-
grated systems of cooperative action by member firms.
In the literature of marketing these two concepts are
often implicitly connected. That is, if a channel is
to offer a unified, coordinated marketing effort, it
is assumed that the effectiveness of this effort will
be a function of one or more competitive advantages.

In this context, the channel becomes the "competitive
unit" and the bases for these potential advantages range
over all facets of the combined marketing activities of
channel members. Their contributions to this combined
effort are not always equal, but in the absence of some
necessary degree of agreement and cooperation their
competitive effectiveness may be limited in both an
individual and collective sense.

In this connection it was prOposed that intra-
channel agreement--agreement among men influencing

marketing functions at various operational levels in

1A5

1A6

a channel--regarding the competitive "advantages" or
"disadvantages" associated with a channel-wide range
of marketing activities--each representing a source of
possible competitive differentiation--would have some
meaningful relationship to the marketing effectiveness
of the channel as a competitive unit.

This thesis presented an analysis and evaluation
of this prOposal and other dimensions of the strategic
implications of combining the concept of differential
advantage with the concept of a marketing channel as a
unified system of action.

The analysis focused on measures of the relative
marketing effectiveness of competing manufacturer—distri-
butor alliances and the competitive advantages and dis-
advantages marketing personnel within these alliances
associate with sixty sources of possible differentiation
which cover six inclusive elements of channel-wide market-
ing activity. The total sample of participating firms
included nine groups of manufacturer-distributor channels
or competitive units. Each group was comprised of units
which compete for sales in a prescribed metropolitan
trading area. Men occupying managerial and field sales
positions with both firms in each unit identified the
rival unit they feel offers the strongest competition

in their respective trading areas.

1A7

Respondents compared their unit's marketing effort
with that offered by this rival unit for each of the
sixty items which individually or in a variety of-combi-
nations may contribute to the marketing success enjoyed
by these competing units. Competitive advantages or
disadvantages corresponding to favorable and unfavorable
comparisons were assigned to the sixty items by each
respondent. Analysis of "horizontal" segments of data
revealed areas of greatest congruency and variance in
the perceptions of marketing effort among managers and
field sales personnel at both the manufacturer and
distributor levels of operation. .Analysis of "vertical"
segments of data, each representing the perceptions of
men within competing manufacturer-distributor alliances,
underscored the pattern of evaluations that tended to be
associated with greater degrees of marketing success.

The discussion included in the remaining pages of
this thesis centers on a summary of the research results
and recommendations suggested by these results. However,
both the results and the recommendations must be con-
sidered in the light of qualifications surrounding the
research design and methodology. Generalizations from
the findings are limited by the restricted sampling pro-
cedure. The investigation was confined to a sample of
men with selected manufacturing and distributing firms

in a single industrial setting--the heavy construction

1A8

equipment industry. Product—related comparisons of
marketing effort were restricted to a single "repre-
sentative" type of equipment--wheel-mounted tractor
shovel—loaders. The judgment of men participating in
this study may not reflect the views of all personnel
who directly or indirectly influence marketing oper-
ations with these firms.

Even within this setting, the two criteria for
selecting a sample of distributor firms--a product line
which includes a major tractor account and a trading
area covering one of nine metropolitan markets--resulted
in a sample of construction equipment distributor firms
which are larger than the "average" firm of this type
in terms of sales volume, manpower requirements, and
other factors related to the scale of operations. The
seven manufacturing firms included in the study are
also larger than the "average" firm producing equipment
and machinery for the heavy construction market. These
firms account for approximately 85 per cent of the
national sales of wheel-mounted tractor shovel-loaders.
In all but one case these firms are actually divisions
of larger corporations. However, in both an organiza-
tional and Operational sense the relationship between
these firms and the independently owned and operated
distributor firms included in the study is representa-

tive of distributive arrangements throughout the

1A9

construction equipment industry and not notably differ—
ent from channels in other segments of industrial market-
ing.

Marketing personnel with the participating firms
indicated, through mailed questionnaires, their per—
ceptions of advantages or disadvantages associated with
sixty items which represent possible bases of competi-
tive differentiation. Each man circled one of five
numerical values assigned to points on a scale ranging
from "significant disadvantage" (l) to "significant
advantage" (5). Means were computed as approximate
measures of the disadvantage or advantage assigned each
item by segments of respondents. Standard deviations
were computed to reflect the extent of agreement among
these respondents in their evaluations of each item.
Similarly, measures of the relative marketing effective-
ness of competing manufacturer—distributor alliances-—
in the form of rankings of overall competitive strength
and estimates of market share percentages--are approxi-
mations based on the collective judgments of the partici-
pating managerial and field sales personnel.

Hopefully, the results offer insight into marketing-
related manufacturer—distributor relations in the specific
industrial setting of construction equipment marketing.
In a broader context, the results suggest a framework

within which conventional approaches to improving the

150

effectiveness of joint efforts by firms aligned in
marketing channels in other industrial settings may

be critically reappraised.

Review of the Findings

 

In the "horizontal" phase of analysis the respond-
ents were grouped solely according to their positions in
the channels. Manufacturer affiliation was not con-
sidered. This phase of the analysis resulted in a pro-
file of specific competitive "advantages" and "dis-
advantages" as perceived from four different vantage
points in the competing manufacturer-distributor units.

The reader should be mindful of two points regarding
the scores assigned each item by the participating managers
and field sales personnel. The scores do not indicate the
absolute competitive strength or weakness attributed to
each item; they reflect the strength associated with each
item relative to the marketing effort of the unit they
identified as their strongest rival for tractor sales
within a given trading area. This, in turn, emphasizes
the point that not all respondents considered the same
two brands of tractors when making evaluations of the
product—related points of comparison. Likewise scores
assigned to the nonproduct facets of marketing effort
reflect evaluations of these activities by men positioned
throughout the channel units the seven producers maintain

in each of the trading areas.

151

The mean and standard deviation of scores assigned
each of the sixty items were computed for the following
four sub-samples of respondents:

Manufacturing Firms

Division Marketing Managers (N=7)

District Representatives (N=56)

Distributor Firms

 

Principals, Presidents or General Managers (N=37)
Field Salesmen (N=73)
Comparisons of these means revealed items which were
viewed similarly, either as "advantages" or "disadvantages,"
by men in all four positions in the manufacturer-distri—
butor units through which gll_seven manufacturing firms
compete for tractor sales in glanine trading areas. In
addition to these "universal" bases of perceived competi—
tive strength or weakness, the data revealed some facets
of channel-wide marketing effort which represent points
of significant interposition differences in perception.
From this phase of the investigation it would ap-
pear that, in summary, the following general conclusions
are warranted:
1. That a very pronounced and widespread emphasis
is placed on product—related components of
competitive effort as bases of favorable

differentiation.

152

Nine items were rated as "advantages" in the col-
lective judgment of men in each of the four positions.
Eight of these "advantages" were accounted for by pro-
duct-related points of comparison. Engineering, design
and operator benefits were viewed as particularly favor-
able sources of competitive differentiation by nearly
all the respondents, regardless of the tractor manu-
facturer they represent.

Warranty fulfillment was the ninth item accorded
widespread rating as an "advantage." Although this item
involves the service capabilities of both manufacturers
and distributors, the scores assigned to it were con-
sistent with the sample-wide tendency to perceive com-
petitive advantages as synonymous with product superiority.

2. That several facets of joint manufacturer—

distributor marketing effort which would appear
to contribute directly to the effective develop-
ment and maintenance of perceived product-
related "advantages" are viewed extensively

as sources of unfavorable comparisons, or
"disadvantages."

Notable among the items rated toward the "dis-
advantage" end of the scale by most of the men in all
four positions were customer education and demonstration
proficiency which would appear to complement the exten-

sive "advantages" attributed to such product-related

153

items as versatility, durability, mobility, economy,

as well as the apparent sine guo non of product ad-

 

vantages mentioned in (l) above--engineering, design,
and Operator benefits.

Similarly incongruous is the predominant per-
ception of warranty provisions and the fulfillment of
these provisions as sources of favorable differentiation,
while the availability of parts, shop facilities and
service supervision are collectively rated by men in
each position as areas where their manufacturer—distri-
butor unit compares quite unfavorably with its strongest
rival unit.

3. That, as might be expected, marketing personnel
throughout the channels tend to attribute
greater degrees of competitive strength to
those aspects of marketing activity which they
most directly control or which influence their
own operational contributions to the channel-
wide marketing effort.

For example, district representatives as a group
view floor planning policies, rental and credit arrange-
ments, and other aspects of financial support extended
by their firms to distributors as sources of favorable
differentiation. Distributor salesmen, however, tend
to perceive these items as handicaps in their efforts
to complete effectively with rival manufacturer-distri—

butor units.

15A

On the other hand, the prevalent judgment among
these same salesmen is that they have an advantage over
their rivals insofar as their reporting of competitive
activities and other relevant data to management.

District representatives do not agree and tend to associ-
ate unfavorable comparisons with this aspect of personal
selling at the distributor firm level of operations.

A. That financial aspects of channel relationships
account for the most emphatic differences of
opinion between marketing managers at the
manufacturer level and distributor managers.

Distributor principals feel their efforts to con-

trol costs and their trade-in policies are comparable to

those of their strongest competitors. Marketing managers
with the tractor manufacturers View these areas as de-
cided disadvantages throughout their network of distri-
butors.

Marketing managers with suppliers perceive the
availability and terms regarding credit and other means
of manufacturer financial support as beneficial inputs

for channel operations, but distributor managers do not
associate competitive advantages with these aspects of
the channel-wide market offering.

5 . That ambiguity and conflict surrounding the
role of district representatives may be a
major impediment to improved intrachannel
communication and effective coordination of

interfirm activities as a competitive unit.

155

In light of the district representatives' potential
contributions as vital links in the two—way flow of in—
formation between managers in the channels, the decidedly
negative assessment of their contribution by distributor
management is disturbing.

As Ridgway pointed out concerning the role of the
district representative's counterpart in another channel
setting: "It is the district manager himself . . . who
has most direct contact with the dealer, and what is
called 'manufacturer-dealer relations' is often actually
the personal working relationship between a dealer and
the district manager."1

6. That a comparison of strengths and weaknesses

across the sixty sources of possible competi—
tive advantage, as perceived by men influenc-
ing many facets of the marketing efforts of
competing manufacturer-distributor units,
clearly suggests that the development of non—
product components of marketing effort holds
considerable promise for favorable competitive

differentiation among these rival units.

 

lValentine F. Ridgway, "The Administration of
Manufacturer-Dealer Systems" (unpublished Ph.D. disser-
tation, Cornell University, 1963), p. 1A1.

156

Competitive superiority is extensively and almost
exclusively associated with perceived differences in the
competing products.

When the data were grouped into segments repre-
senting the judgments of men throughout the distributive
network of each manufacturing firm (competitive combi-
nations) and rival channels in specific trading areas
(competitive units), the most obvious correlate of
marketing effectiveness was a wide range of bases of
favorable differentiation which extends across many
nonproduct facets of competitive effort.

In the "vertical" phases of analysis the respond-
ents were divided into groups representing competing
manufacturer-distributor alliances. In the first phase
seven segments of data were considered, each reflecting
the responses of those allied with a single manufacturer.
In the second phase twenty-five segments of data were
considered, each reflecting the judgments of five men
who influence a given tractor manufacturer's competitive
strength in a single metropolitan trading area..

The analysis focused on patterns of responses indi-
cating which elements of marketing effort are perceived
as competitive advantages or disadvantages by group mem-
bers and the extent of their agreement in making these
judgments. The degrees of association between these
variables and measures of the marketing effectiveness of

the competing alliances were determined.

157

This phase of the analysis revealed findings which
suggest the following general conclusions:

1. That one of the participating manufacturing

firms is clearly rated as the strongest,
most effective competitor for tractor sales
among the men who participated in this study.

A ranking of competitive firms by managers and
district representatives with the suppliers, and market
share estimates by men located in each of the trading
areas clearly substantiated this tOp rating.

2. That despite the position of competitive
leadership accorded this tractor producing
firm, the vast majority of participating
managers and field sales personnel throughout
the distributive networks of the other six
manufacturing firms contend that they offer
a "superior" line of tractors.

Product features and performance capabilities
accounted for a sample-wide "core" of perceived competi-
tive advantages.

3. That many nonproduct facets of manufacturer-
distributor marketing effort are consistently
perceived as sources of competitive advantages
by marketing personnel throughout the channels
the leading manufacturing firm forms with
distributor firms in the nine trading areas

studied.

158

Men in the rival channel units agree with this

evaluation. Unlike their product-related comparisons

which yielded a pattern of "universal" advantages, they

tended to view other marketing activities, the most

notable being service and personal selling, as com-

petitive disadvantages.

A.

That men throughout the manufacturer—distri-
butor competitive units which account for
larger shares of tractor sales in these trading
areas View nonproduct elements of their joint
marketing efforts as sources of greater com-
petitive advantages than the favorable differ—
entiations they associate with their line of

tractors.

Figures reflecting the extent of their perceived

competitive strength across the service, personal selling,

promotion and personnel areas of marketing effort, rela-

tive to rival channel units, exceeded advantages attri-

buted to product comparisons.

5.

That there is a consistent and considerable
relationship between measures of perceived
advantages and disadvantages in gll_major

elements of joint manufacturer—distributor
marketing effort among members of the com-
peting interfirm alliances and measures of

the marketing effectiveness of these alliances.

159

Rank correlation coefficients computed in both
the macrOSCOpic and microscopic phases of analysis indi—
cate that respondents throughout channels which enjoy
greater measures of marketing effectiveness tended to
perceive mpgg_favorable competitive differentiation than
their counterparts throughout channels that have been
less effective in this Specific competitive setting.

6. That there is also a notable relationship
between measures of intrachannel agreement
regarding the extent of 9299_competitive
advantages 999 disadvantages and measures of
the marketing effectiveness of competing
channel units.

Rank correlation coefficients were also computed
which indicate that respondents throughout the distri-
butive networks of the competitively "stronger" manu—
facturing firms tended to agree more closely in their
evaluations of individual areas of marketing activity--
whether the area was viewed as a source of competitive
advantage 93 disadvantage—-than respondents representing

the firms judged to be "weaker" overall competitors.2

 

2The positive correlation coefficients relevant
to general conclusions 5 and 6 do not, of course, sup-
port any conclusions regarding the causal relationship
between these variables.

160

7. That the competitive vitality of many channel
relationships in this industrial setting may
well be inhibited by a disproportionate allo—
cation of effort and concern regarding pro-
duct offerings and a failure to develop channel—
wide marketing strategies which attempt to
favorably differentiate more facets of market-
ing effort.

Clearly, nonproduct and nonprice dimensions of the
combined marketing "inputs" of suppliers and distribubors
aligned in the more effective competitive units repre-
sent not only possible, but probable bases of lasting
competitive differentiation.

In this connection it should be noted that men
marketing the leading brand of tractor Shovel-loaders
View prices of products in their line as decidedly dis-
advantageous. Their negative assessment of comparative
prices exceeded all other competitors by a sizeable mar-
gin. Likewise, other facets Of their intrachannel finan-
cial relations were rated as disadvantages.

8. That greater managerial awareness of interfirm
perceptions of the competitive advantages and/
or disadvantages associated with more facets
of channel-wide marketing effort may serve as
the principal basis for improved strategy
formulation designed to increase the effective-

ness of channels as competitive units.

161

Increased awareness of this sort may be attained
through "channel audits" of scores representing the per-
ceptions of advantages and disadvantages in Six major
areas of marketing activity among men throughout channel
units in several geographical competitive settings.

A review of these scores provides a framework for
isolating and identifying significant disagreement re-
garding the sources and extent of competitive strength
throughout the distributive network formed by a manu-
facturing firm and its distributor firms in specific
trading areas.

The findings of this research effort substantiate
the significance of combining the concepts of differen—
tial advantage and marketing channels as competitive
entities. The dimensions of competitive differentiation
between marketing channels in this investigative setting
are manifested in a broad range of marketing "inputs."
Some of them originate at the supplier level. Others
originate at the distributor level. But all require
some degree of development or support from management
and other personnel at both levels. One of two questions
posed early in this thesis concerned the relationship
between intrachannel agreement regarding the sources
and significance of this differentiation and the market—
ing effectiveness of channels as competitive entities.

The analysis revealed a clear relationship and as a

162

result lends credence to the conceptual model of inter-
firm marketing relations for the attainment of mutual
benefit.

An additional question concerning possible oper-
ationsl applications that might result from the findings
was also posed. Conceptualizing marketing channels as
competitive units with jointly develOped and sustained
bases of possible competitive differentiation which
mutually benefit member firms does have operational
value for men with marketing-related functions and re-
sponsibilities with firms aligned in channels. It will
add further meaning and insight to the conventionally
agreed upon need for interfirm communication and cooper—
ation. It will underscore the complementary nature of
many marketing activities undertaken at all levels of
operation within channels. But more important and more
operational are the benefits that may be derived from
greater appreciation of intrachannel perceptions of
these activities.

Often management with manufacturing firms seems
to develop channel relationships with what might be
called a "national market mentality"—-an implied homo-
geneity of operational problems and conditions through—
out the network of distributor firms offering their pro-
ducts to "representative" customers and prospects in

all market areas. This frame of reference obscures the

163

value of conceptualizing marketing channels as competitive
units. The manufacturing firm becomes a common partner
with each of its distributor firms in comprising competi-
tive units in specific geographical areas. Consequently
the focus of managerial concern, from both the supplier
and distributor points of view, should center on the
recognition of unique or unusual conditions regarding
the competitive environment in separate trading areas
and the marketing efforts of units competing in these
areas.

Variances in evaluations of the competition and
the source and extent of differentiations between com—
petitors by men influencing a manufacturer-distributor
unit's marketing posture within these geographical
settings will emphasize these conditions. In this re-
gard the "channel audit" technique outlined earlier is
an operationally-oriented application of the conceptual
model. These "audits" may aid in the development of
interfirm relations which directly or indirectly contri-
bute to more purposeful channel-wide marketing efforts
by individual competitive units in a distributive net—
work. As Alderson and Green point out, "the main function
of an audit is a critical review of the matching of oppor-
tunity by effort. The purpose of the new plan will be to

improve on the application of effort to opportunity."3

 

3Alderson and Green, op. cit., p. 392.

16A

The Paradox of Perceived Product
Superiority

 

The widespread "competitive advantages" associated
with each of the competing products is somewhat paradoxi-
cal. A majority of men aligned with six competing manu-
facturing firms identified the same firm as their strong—
est rival. Trading areas market share figures confirmed
this supplier's position of leadership. Yet there is a
stated conviction among marketers of each of these brands
of tractors that their own product line is superior to
all others. Consequently the data do not reveal a clear
answer as to which firm offers the "best" line of tractors
in the collective judgment of sample members. The scores
indicating product-related competitive advantages are
"neutralized."

It is clear, however, that more purchasers of wheel-

mounted tractor shovel—loaders in the nine metropolitan
areas included in the study favor the offerings of one
of these firms--the firm with the largest market share in
six of these trading areas. At the same time, the data
reveal a clear pattern of the sample members' perceptions
of strength in many nonproduct facets of competition.
Men with the top ranked firm view these areas of marketing
activity as sources of their greatest advantages—-relative
to the efforts of their competitors. Men with these rival
firms generally agree with this judgment and it should be

noted that the scores indicating their perceptions of

165

strength in these activities—-relative to the efforts of
the top ranked firm--also tend to be "neutralized." This
pattern of scores seems to signify that differences be-
tween the competing product lines are either not recog—
nized or acknowledged by the respondents, while differ-
ences in competitive efforts throughout the distributive
networks which support the selling, servicing, financing
and promoting Of these product lines are clearly recog-
nized.

One might argue that a product-related bias should
be anticipated when polling the opinions of men influencing
the marketing of industrial equipment. However, to antici-
pate such a result is one thing, to understand it fully is
quite another. The seemingly contradictory patterns of
product evaluations raise some unanswered questions which
suggest supplemental research which can only be considered
in the context of conjecture at this point. What might be
reasonable explanations for the near unanimous belief in
nearly all product-related points of comparison as sources
of favorable competitive differentiation?

It may be that the respondents do not have sufficient
knowledge of competitive products to allow for an ob-
jective comparison of their products with rival brands.

If this is the case there appears to be a tendency to
overemphasize the "benefits" connected with their own

product Offerings. It is also possible, of course, that

166

the instrument used to gather data may have failed to
provide for meaningful product comparisons. Perhaps a
more precise description of features, design, perfor-
mance capabilities and the like is necessary before
clear distinctions between competing products can be
made.

Perhaps the most likely reason for the universal
perceptions of product "advantages" is the extent of
emphasis placed on product-related details and descrip-
tions in so much of the instructional and informational
material supplied by manufacturing firms to their distri—
butors. This emphasis is also a central part of the com-
munication firms at both levels of Operation direct at
customers and prospects in the markets they serve. These
remarks are not intended to imply that product knowledge
is not an important ingredient in effective marketing
communications in this competitive setting--in the form
of both personal selling and promotion. There is also
no intention to imply that product features and perfor—
mance capabilities are not key dimensions of differenti-
ation in the evaluation of competitive offerings among
buyers of heavy construction equipment.

What is intended, and what the findings of this
study suggest, is a recommendation for reassessment of
the priority placed on product offerings and product

knowledge, per se, relative to priorities placed on

167

many nonproduct components of marketing effort as possi-
ble sources of meaningful competitive differentiation.
Product differences in a strict physical sense simply
may not be as important to buyers of heavy construction
equipment as many sellers in this segment of industrial
marketing seem to feel they are. As one experienced
contractor put it:

I feel the average contractor is satisfied with the

salesman who has the basic knowledge and no more.

The buyer isn't a mechanical engineer and has no

understanding of the technical stuff some salesmen

throw at you. If I see a piece of equipment that's

working well on some other contractor's job, I

don't want to hear a long, detailed story about the

engineering of the machine . . . it might even kill
the sale.

Whether or not this man's views represent the feel-
ings of the "average" contractor or other individuals
making or influencing equipment purchases can only be
determined through further research. Nevertheless it
appears that the success enjoyed by channel units with
larger market shares in this study is the result of a
"package" of competitive inputs which transcend favor-
able product-related points of comparison and include

many other want-satisfying facets of channel-wide market-

ing efforts.

 

u"CE News Interview," Construction Equipment News,
(October, 1957), 1A. The article presents questions and
answers from an interview with William M. Wyant, Presi-
dent of William M. Wyant Co., Inc., Chicago, Illinois.

 

168

Yet it must be pointed out that no weights were
assigned to the sixty sources of possible differenti-
ation in terms of their impact and influence on pur-
chase decision-makers. Obviously they are not of equal
importance and the product offering, of course, is the
most important. An optimum allocation of channel—wide
effort among these competitive inputs can not be deter-
mined from the findings of this study. Similarly, an
optimum blend of interfirm control and responsibility
for this allocation was not considered in this study.
Both these problems require additional research.

Benefits of the "Conceptual
Marriage"

 

 

It was proposed early in this thesis that success-
ful competitive effort requires a total market offering
which converts greater numbers of prospects into cus—
tomers and maintains loyalty among present customers.

To attain this success a firm must develop and sustain
some image Of meaningful uniqueness--some basis for
favorable buyer discrimination among competitive offer-
ings in given markets. Sources of possible competitive
differentiation were discussed within a framework sug-
gested by the writings of Wroe Alderson, Edward Chamber-
lin, John Maurice Clark, and others. These advantages
may take the form of both tangible and intangible differ-

ences in the perceptual framework of individuals who

169

influence or make purchase decisions. When considered

in this context, bases of possible competitive advantages
extend across nearly every facet of a firm's total
marketing effort.

When a manufacturing firm's products are moved to
buyers in specific market areas through distribution
channels, much of the marketing activity undertaken by
other firms in the channels also influences the competi-
tive effectiveness of the manufacturing firm. Similarly,
much of the manufacturing firm's marketing effort in-
fluences the competitive strength these intermediaries
may enjoy in their own trading areas.

Most current research concerned with the formation
and operation of marketing channels is developed through
variations of a systems perspective which emphasizes intra-
channel functional relationships and patterns of inter-
action. Discussions of channel relationships in this
context include an expressed or implied assumption that
the activities of individual firms should be combined in
a closely coordinated, OOOperatively implemented effort.

The traditional View of marketing channels as
"fragmented, potentially unstable, networks, in which
vertically aligned firms bargain with each other at

arm's length, terminate relationships with impurity,

170

and otherwise behave autonomously"5 has been thrust aside
by contemporary marketing scholars who tend to agree
that "the analysis of factors affecting marketing channels
rests on the conception of a system of action of which
the individual firms are elements."6
This thesis argues that a central component of
this "system of action" is an amalgam of marketing
activities-—a channel-wide marketing effort—-which
accentuates the connection between interdependent, mutu-
ally beneficial aspects of channel relationships and the
competitive effectiveness of interfirm alignments. The
model incorporated in the design and development of this
research effort combined two concepts--the concept of
differential advantage in a competitive environment and
the concept of marketing channels as competitive entities.
Conventional prescriptions for improved marketing oper—
ations reflect an awareness and appreciation of these
concepts, but in an individual, non-related sense.
The evaluation and analysis of data generated in

this study suggest a framework for application of this

 

5Bert C. McCammon, Jr., "The Emergence and Growth
of Contractually Integrated Channels in the American
Economy" in Peter D. Bennett (ed.), Marketing and
Economic DevelOpment (Chicago: American Marketing
Association, 1965), p. A96.

 

 

6Wroe Alderson, "The Development of Marketing
Channels" in Richard M. Clewett (ed.), Marketing Channels
for Manufactured Products (Homewood, Illinois: Richard
D. Irwin, Inc., 195A):'p. 22.

 

171

"conceptual marriage" to distributive relationships

between firms in other industrial settings. The three

central benefits of this framework may be summarized as

follows:

1.

It focuses attention on a wide range of
activities and functions--developed and
implemented at various operational levels
within a channel--which individually, or in
some combination, may contribute to a more
durable and favorable differentiation between
the total market offerings of competing
channel units among individuals evaluating
these offerings in given markets.

It emphasizes the relationship between intra-
channel assessments of these activities-—as
sources of competitive advantages or dis—
advantages-—and the marketing effectiveness
of the channel as a competitive unit.

It points out the managerial implications-—
in terms of "localized" strategy formulation
--of greater sensitivity to the specific
competitive environment within which rival

channel units compete for sales and profits.

Conceptualizing the combined marketing activities

of firms aligned for distributive purposes in this con-

text underscores the true nature of the most perplexing

172

problem of channel management. As Reavis Cos suggests,
"the real problem is to evolve some workable situation
that will achieve reasonably well both the objectives
of the over-all system and the objectives of its com-
ponent parts."7 The findings of this research effort
and the renewed perspective of channel relationships
these findings suggest are forwarded as additions to

this evolutionary process.

 

Cox, op. cit., p. 212.

APPENDICES

173

APPENDIX I

DATA GATHERING INSTRUMENTS

17A

175

EXHIBIT 1A

Cover Letter to District Representative--
First Mailing

As part of our continuing interest in all phases of busi-
ness enterprise, we are gethering data from various sales
and marketing personnel with selected manufacturers and
distributors of construction equipment. Our objective

is a detailed analysis of the marketing aspects of manu—
facturer and distributor relationships. This research
project has the support and encouragement of Associated
Equipment Distributors.

In addition, we have discussed the nature and objectives
of the study with marketing or sales management personnel
with each cooperating manufacturer. We are pleased with
their interest in the study and their desire to be in-
cluded in all aspects of the analysis. They Share our
feeling that the objectives of our research effort offer
much promise for a thorough and insightful analysis of
the competitive aspects of manufacturer-distributor
relationships in the marketing of construction equipment.

In this connection, manufacturer managers have completed
and returned questionnaires to us, along with the names
and addresses of their district representatives covering
each of the metropolitan market areas included in the
study. The cooperating manager in the case of your

firm is .

SO that the study may include a complete set of responses
from personnel with your firm we would like you to complete
the enclosed questionnaire. It is designed to provide us
with your judgments concerning several aspects of the
marketing efforts of your firm and the distributor firm
carrying your construction equipment in a given metropoli-
tan market area.

Because our sample of participating firms has been care-
fully and selectively developed, your time and effort in
completing this questionnaire is especially important.
Your cooperation is sincerely appreciated.

Yours very truly,

Parker M. Worthing W. J. E. Crissy, Ph.D.
Research Director Chairman of the Research
’ Committee

176

EXHIBIT 1B

Coveeretter to Distributor Managers--
First Mailing

As part of our continuing interest in all phases of
business enterprise, we are gathering data from various
sales and marketing personnel with selected manufacturers
and distributors of construction equipment. Our objective
is a detailed analysis of the marketing aspects of manu-
facturer and distributor relationships. This research
project has the support and encouragement of Associated
Equipment Distributors. You may recall recently receiv-
ing a letter from P. D. "Bud" Hermann, AED Executive
Director, urging you to cooperate with our data gathering
efforts.

In this connection, we would like you and two of your
field salesmen to complete the three enclosed question-
naires. They are designed to provide us with your judg-
ments concerning a number of Specific aspects of your
firm's competitive effort. Specifically, we would like
yfig to complete the questionnaire with the designation

GR) in the upper right hand corner. We would like two
of your field salesmen to complete the other two question-
naires. We ask that each of you do this without consult—
ing one another or comparing answers.

 

Specific instructions are included in each questionnaire.
They are identical, except that yours contains an addi-
tional page with brief questions concerning your individual
firm. Return envelopes are enclosed for all three question—
naires.

Because our sample of distributor firms has been carefully
and selectively developed, your effort in helping us ob-
tain all three completed questionnaires is especially im-
portant. Your cooperation is sincerely appreciated.

Yours very truly,

Parker M. Worthing W. J. E. Crissy, Ph.D.
Research Director Chairman of the Research Committee

177

EXHIBIT 1C

Cover Letter to District Representatives--
Second Mailing

You may recall our recent request for your assistance with
our research concerning the marketing aspects of manu-
facturer and distributor relationships. Dr. Crissy and

I are most pleased with the high rate of response among
manufacturers' regional or district personnel. Our
eventual complete analysis promises to provide meaning-
ful insight into construction equipment marketing. The
participating manufacturers share our interest in the
study and we look forward to sharing the results of the
research with each of them.

We hope to include a completed questionnaire from you in
our analysis. If, by chance, our initial request did not
reach you, a duplicate questionnaire is enclosed. It is
designed to provide us with your judgments concerning
several aspects of the marketing efforts of your firm

and the distributor firm carrying your construction
equipment in a given metropolitan market area.

As you know, our total sample carefully matches selected
respondents from manufacturers and their distributors in
these specific geographical areas. AS a result, your
effort is especially important. We hOpe to begin the
final phases of analysis by the third week in June. The
brief time you take to provide us with your judgments
will enhance the inclusiveness and validity of this
analysis. Your cooperation is sincerely appreciated.

Yours very truly,

Parker M. Worthing
Research Director

178

EXHIBIT 1D

Cover Letter to Distributor Managers--
Second Mailing

You may recall our recent request for your assistance
with our research concerning the marketing aspects of
manufacturer and distributor relationships. Dr. Crissy
and I are most pleased with the high rate of response.
Our eventual complete analysis promises to provide mean-
ingful insight into construction equipment marketing.

We hope to include completed questionnaires from you

and two of your field salesmen in our analysis. If, by
chance, our initial request did not reach you, duplicate
questionnaires are enclosed. They.are designed to pro-
vide us with your judgments concerning a number of
specific aSpects of your firm's competitive effort.

Specifically, we would like ypg_to complete the question-
naire with the designation (MGR) in the upper right hand
corner. We would like two of your field salesmen to com-
plete the other two questionnaires.‘ We ask that each of
you do this without consulting one another or comparing
answers.

Our sample of distributor firms has been selectively
develOped. We have carefully matched manufacturers and
their respective distributors in specific geographic
areas. As a result, your effort in helping us Obtain

all three completed questionnaires is especially im-
portant. We hope to begin the final phases of analysis
by the third week in June. The brief time you take to
provide us with your judgments will enhance the inclu-
siveness and validity of this analysis. Your cooperation
is sincerely appreciated.

Yours very truly,

Parker M. Worthing
Research Director

179

Common Cover Sheet for Questionnaires

MICHIGAN STATE UNIVERSITY am mama - MICHIGAN 48823

 

GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

DEPARTHBNT OF MARKETING AND TRANSPORTATION ADMINISTRATION ° EPPLBY CENTER

As part of our continuing interest in all phases of business enterprise,
we are gathering data from various sales and marketing personnel with selected
manufacturers and distributors. This information will be the basis for a
doctoral dissertation which is designed to explore the marketing aspects of
manufacturer and distributor relationships.

To insure confidential treatment of your reply, the questionnaire should
be returned directly to the university in the enclosed envelope. The number in
the upper right hand corner of this page serves only as a guide for the research
staff. Its sole purpose is to indicate which questionnaires have been returned.

No names individuals or firms will be identified in the text of the research
report.

The success of this study is entirely dependent upon the cooperation of each
reSpondent. The brief time you set aside to provide us with your personal judg—

ment on each question will add significantly to the study’s value. Thank you
very much.

This Study is Undertaken
With The
Cooperation and Support

of

ASSOCIATED EQUIPMENT DISTRIBUTORS
6|5 West 22nd Street
Oak Brook, Illinois

180

EXHIBIT 3A

Request for Ranking of Competitors and
Market Share Estimates--
Manufacturer Managers

PART A

Instructions: Listed below are several manufacturers,
all of whom produce and market, among other products,
a wheel-mounted tractor with shovel-loader.

In selling this particular type of vehicle, your firm
competes with a number of these manufacturers and their
respective distributors in various market areas.

1. We would like you to rank these manufacturers in terms
of their over-all strength in competing with your firm
for sales of this specific type of construction equip-
ment.

Please indicate your ranking, from 1 (strongest
competitor) to 7 (least strong competitor), beside
each of the following manufacturers. Your own firm
will, of course, not be ranked, but please rank all
of the remaining competitive tractor manufacturers.

a. Trojan Division,
Eaton Yale & Towne, Inc.

b. Allis-Chalmers Mfg. Co.
c. Pettibone Mulliken COrp.

d. International Harvester
Co.

e. Clark Equipment Co.

f. Euclid Division,
General Motors Corp.

g. Caterpillar Tractor Co.

h. Thew-Lorain Div.,
Koehring Co.

181

The competitive strength of any manufacturer tends
to Vary across geographical market areas.

We would like your judgment as to which manufacturer
is the strongest competitor for sales of this specific
type of equipment in each of a number of geographical
areas.

For each of the following greater metropolitan areas,
indicate your choice of your strongest competitor in
that area by placing the number of the manufacturer
(as numbered below) opposite the geographical area.

 

Here again your own firm is to be excluded, but please
indicate your strongest competitor in each area.

Competitors:

 

.1:me

Clark
Euclid
Caterpillar
Thew-Lorain

Trojan 5
Allis-Chalmers 6
Pettibone Mulliken 7
International Harvester 8

Market Areas:

 

 

 

 

 

 

a. Atlanta f. Louisville

b. Boston g. Miami

c.. Denver h. Salt Lake City

d. Indianapolis i. St. Louis

e. Kansas

3. Like your competitors, the competitive strength of
your firm may vary across these same geographical
areas. In this connection, we would like you to
indicate the share of the market (expressed as a
percentage) for wheel-mounted tractors with shovel-
1oaders that your firm enjOys in each of these areas.

Area Market Share (%)

a. Atlanta

b. Boston

0. Denver

d. Indianapolis

e. Kansas City

f. Louisville

g. Miami

h. Salt Lake City

1. St. Louis

182

PART A

EXHIBIT 3B-—Request for Ranking of Competitors and Market
Share Estimates-~District Representatives

 

Instructions: Listed below are several manufacturers, all of whom produce and
market, among other products, a wheel mounted tractor with shovel loader.

Also listed below are several greater metropolitan areas within which your firm
competes with these other manufacturers for sales of this particular type of
vehicle.

(1) We would like you to indicate which of the following market areas is
included in the territory where you represent your firm.

Please circle the code number opposite the metropolitan market area that
is within your territory or district.

Market areas:

 

1. Atlanta 4. Indianapolis 7. Miami
2. Boston 5. Kansas City 8. Salt Lake City
3. Denver 6. Louisville 9. St. Louis

(2) We would like you to rank the following manufacturers in terms of
their over-all strength in competing with your firm within this
metropolitan market area for sales of wheel mounted tractors with
shovel loaders.

 

 

Please indicate your ranking, from 1 (strongeSt competitor) to 7 (least
strong competitor), beside each of the following manufacturers. Your own
firm will, of course, not be ranked, but please rank all of the remaining
competitive tractor manufacturers in terms of their competitive strength
in the metropolitan market area you circled above.

a. Trojan Division, 8. Clark Equipment Co. ___
Eaton, Yale & Towne, Inc. ___ f. Euclid Division,
0. Allis-Chalmers Mfg. Co. ___ General Motors Corp. ___
C. Pettibone Mulliken Corp. ___ g. Caterpillar Tractor Co.
0. International Harvester h. Thew-Lorain Divioion,
Inc. Koehring Co.

(3) The competitive strength of your firm, as well as these other
manufacturers, varies across the above listed geographical areas.
In this connection, we would like you to indicate the share of market
(expressed as a percentage) for wheel mounted tractorS‘with shovel
loaders that_xour firm enjoys in the specific metropolitan market area
circled above.

 

The market share your firm enjoys in the greater metropolitan market
area you circled above (Part A, Section 1) is %.

-1-

183
PART A

EXHIBIT 3C—-Request for Ranking of Competitors and Market Share
EstimateS--Distributor Managers and Field Salesmen

 

IHSIIUCIIOHSI Listed below are several manufacturers, all of whom produce and

market, among other products, a wheel mounted tractor with shovel loader.

 

In selling this particular type of vehicle, your firm and the tractor manufac-
turer you represent compete with a number of these manufacturers and their

respective distributors in your market area.

(1) We would like you to indicate which of these manufacturers you consider

 

to be the strongest competitor that your firm (and the manufacturer you

 

represent) must compete against for sales of this Specific type of construc-

tion equipment in your market area.

 

Please circle the code number opposite your
STRONGEST COMPETITIVE MANUFACTURER.

 

1. Trojan Division, 5. Clark Equipment Co.

Eaton, Yale & Towne, Inc.
6. Euclid Division,

2. Allis-Chalmers Mfg. C0. General Motors Corp.
3. Pettibone Mulliken Corp. ' 7. Caterpillar Tractor Co.
4. International Harvester Co. 8. Thew-Lorain Division, Koehring Co.

(2) The competitive strength of the tractor manufacturer you represent, as
well as these other manufacturers, varies across different market areas.
In this connection, we would like you to indicate the share of market (ex-

pressed as a percentage) for wheel mounted tractors with shovel loaders that

zour firm enjoys in your market area.

The market share your firm enjoys in your market area is %.

18A

EXHIBIT AA

Instructions for Competitive Comparisons--
Manufacturer Managers

PART B

Instructions: The competitive strength of the tractor
manufacturer you selected above (Part A, Section l--

your strongest over-all competitor for sales of wheel—
mounted tractors with shovel-loaders) is in great measure
due to the effectiveness of the distributor firms carry-
ing his product in various trading areas.

We'd like you to compare the marketing efforts of distri-
butors representing your firm with those offered by
distributors representing this sppcific competitive manu-
facturer. This comparison involves six major marketing
elements, each consisting of ten specific items.

For each item, rate the competitive standing (advantage
Or disadvantage) of your distributo§§_compared to the
distributors representing this manufacturer you have
selected as your strongest over-all competitor for wheel-
mounted tractor sales.

 

Where apprOpriate, confine your comparison specifically to
the marketing of tractor loaders. Most of the items, how-
ever, concern your competitive comparison of more general,
over-all elements included in the marketing and sales
Operations of your distributor firms and this competitive
manufacturer's distributor firms.

Using the following scale, circle the code number on each
item that represents your judgment as to whether the
distributor firms handling your wheel-mounted tractors--
have a disadvantage, an advantage, or are equal--compared
to the distributor firms handling the tractors of this
specific competitive manufacturer.

-2 a Significant disadvantage

-l a Slight disadvantage

0 neither advantage nor disadvantage
(equal)

+1 a slight advantage

+2 a significant advantage

185
PART B

EXHIBIT AB——Instructions for Competitive Comparisons-—
District Representatives

Instructions: In Part A, Section 2 above, you ranked the strength of competitive
manufacturers of wheel mounted tractors with shovel loaders in a specific metro-
_politan market area. The competitive strength of the manufacturer you ranked as
number 1 in the area is in great measure due to the effectiveness of the distri-
butor firm carrying his product in this market area.

 

We’d like you to compare the marketing efforts of the distributor representing

your firm with those offered by the distributor representing this specific com-
petitive manufacturer. This comparison involves six major marketing elements,

each consisting of ten Specific items.

 

For each item, rate the competitive standing (advantage or disadvantage) of your
distributor compared to the distributor representing this manufacturer you have
selected as your strongest competitor for wheel mounted tractor sales in this
metropolitan market area.

 

 

Where appropriate, confine your comparison specifically to the marketing of tractor
loaders. Most of the items, however, concern your competitive comparison of more
general,cover-all elements included in the marketing and sales operations of your
distributor firm and this competitive manufacturer’s distributor firms.

Using the following scale, circle the code number on each item that represents
your judgement as to whether the distributor firm handling your wheel mounted
tractors--has a disadvantage, an advantage, or is equal--compared to the dis-
tributor firm handling the tractors of this specific competitive manufacturer.

 

 

—-2 a significant disadvantage
-1 a slight disadvantage

0 neither advantage nor disadvantage (equal)
-+l a slight advantage

4—2 a significant advantage

186
PART 8

EXHIBIT AC-—Instructions for Competitive Comparisons--Distri-
butor Managers and Field Salesmen

 

Instructions: The competitive strength of the tractor manufacturer you indicated
above is in great measure due to the effectiveness of the distributor firm

carrying his product in your trading area.

 

We’d like you to compare the marketing efforts of your firm with those offered by
this specific competitive distributor. This comparison involves six major mar-
keting elements, each consisting of ten specific items. For each item, rate the

competitive standing (advantage or disadvantage) of your firm compared to this

 

specific competitive distributor firm.

Where appropriate, confine your comparison specifically to the marketing of tractor
loaders. Most of the items, however, concern your competitive comparison of more
general, over-all elements included in the marketing and sales operations of your

firm and this competitive firm.

Using the following scale, circle the code number on each item that represents
your judgment as to whether your firm has an advantage, a disadvantage, or is

equal--compared to this specific competitive distributor firm.

-2 a significant disadvantage
_.1 a slight disadvantage

0 neither advantage nor disadvantage (equal)
+ 1 a slight advantage

+ 2 a significant advantage

187

SECTION |1 PRODUCT

 

EXHIBIT 5--Delineation of Potential Competitive Advantages

(Ikn'each item compare your line of‘tractor shovels with the strongest competitive line.)

+-1
+-l

+-l

-+l

+-l

+1.

+1

+1

+1

+1

-2
-1

0
+1

'+2

+-2
+-2

4-2

+-2

-+2

-+2

+2

+2

-+2

+2

significant disadvantage

slight disadvantage

equal

slight advantage

significant advantage

(I)
(2)
(3)

(4)

(5)
(6)

(7)

(8)

(9)
(10)

VERSATILITY (multiple uses)

OURABILITY (maintenance requirements)

MOBILITY (over-the-road movement;
maneuverability)

ECONOMY (savings of time and money;
potential resale value)

ATTACHMENTS (number and variety available)

VARIETY (bucket size, horsepower, weight,
no. of models)

OPERATOR BENEFITS (safety, comfort, visi-
bility, ease of
Operation)

ENGINEERING (operation and performance
features)

OESION (appearance, serviceability)

WARRANTY PROVISIONS (extent and duration

of coverage)

188

SECTION I l I SERVICE

 

(Fbr each remaining item, compare your firm against the specific competitive

clistributor firm.)

+ 1

+-2

IQ

significant disadvantage

slight disadvantage

equal

slight advantage

significant advantage

(II)

(12)

(13)

(I4)

(15)

(15)
(IT)

(13)

(19)

(20)

OELIVERY (readily available or rapid
shipment from manufacturer)

AVAILABILITY OF PARTS (management of
repair and replacement parts
inventory)

PROFICIENCY (utilization of current

methods and techniques)

EFFICIENCY (prompt scheduling and com-
pletion of service and repair work)

CUSTOMER EOUCATION (preventive main-
tenance information; Operator
training)

SHOP FACILITIES (tools and equipment)
CUSTOMER COMPLAINTS (handled in prompt

courteous, and fair manner)

WARRANTY FULFILLMENT (delivery inspec-

tion and service; handling of
claims by distributor)

FIELD SERVICE (trucks equipped with
proper tools and service
literature)

PERSONNEL (trained and experienced

service mechanics available)

-l

-'l

-'1

-1

-1

-1

-’1

- l

- l

— 1

189
SECTION III: FINANCIAL

i

 

significant disadvantage
slight disadvantage
equal

slight advantage

significant advantage

(ZI) PRICES (comparative prices across total
product line)

(22) CREOIT AVAILABILITY (sources, arrange-

ments)
(23) CREDIT TERMS (rates, payment scheduling)
(24) SERVICE CHARGES (parts and labor charges)

(25) TRAOE'IN POLICY (terms, allowances for
used equipment)

(26) RENTAL AND/OR LEASE CONTRACTS

(equipment available, charges)

(27) MANUFACTURER SUPPORT (floor planning;

rental and credit arrangements)

(28) OPERATING CAPITAL (distributor financial
’ strength)

(29) COST CONTROL (knowledge and control of

operating expenses)

(30) BILLING (form and frequency; cash
discount policies)

+ 1

+ l

+ l

+-1

+-1

+-1

+ l

+ l

+-l

+1

SECTION IV:
— 2
- 1

0 equal
+-1
+-2
+-2 (31)
+ 2 (32)
+ 2 (33)
4-2 (34)
+ 2 (35)
+-2 (36)
+-2 (37)
+ 2 (38)
4-2 (39)
4-2 (40)

190
PERSONAL SELLING

 

significant disadvantage

slight disadvantage

slight advantage

significant advantage

PRODUCT KNOWLEDGE (uses, features, and
benefits)

"PEOPLE" KNOWLEDGE (ability to assess
personality and motivational
factors)

STRATEGY FORMULATION (setting 0f Objec-
tives; planning steps for goal
attainment)

TACTICAL ADJUSTMENT (face-to-face
reactions; handling sales
resistance)

COMMUNICATIVE ABILITY (understandable,
interesting, believable, and
persuasive)

SOURCE OF INFORMATION (reporting of
competitive activities and other
relevant data to management)

MARKET KNOWLEDGE (awareness of growth

accounts; current prospect lists;
key decision makers)

REPUTATION (duration and strength of
account relationships)

EXPERIENCE AND TRAINING (better sales
meetings; home study courses; self-
improvement efforts)

PLANNING (usage of time; management of
each call, each account, and
total territory)

—’2

-’1

+ l

+ l

+ l

+ l

+ l

+ l

+ l

+ 1

+ l

+ l

+ l

+ 2

+ 2

+ 2

+'2

+-2

+-2

+-2

+-2

+-2

+2

+'2

191

SECTION V: PROMOTION

 

significant disadvantage

slight disadvantage

equal

slight advantage

significant advantage

(41)

(42)

(43)

(44)

(45)

(45)

(47)

(48)

(49)

(50)

SALES AIOS (product literature; manuals
and catalogs; technical material)

SALES PROMOTION (advertising specialties;

sales incentive programs)

MANUFACTURER'S ADVERTISING (strength of

corporate image; lead generation)

DISTRIBUTOR ADVERTISING (regional con-
struction publications; news-
papers and other local media)

OIRECT MAIL (selectivity of lists;

prospect responses)

VISUAL AIOS (photos; flip-charts; film
strips)

CUSTOMER REFERRALS (endorsement by

present customers)

PUBLICITY (mention of firm and/or
personnel in trade or local press;
community relations)

PERSONAL CONTACTS (executive level

contacts; customer relations)

DEMONSTRATION PROFICIENCY (sales and
service cooperation; equipment
operating skills)

+'l

+'1

+-1

+-l

+-1

+-l

+-l

+-l

+-l

+~l

+ l

+ 2

+'2

*‘2

+-2

+-2

+-2

+'2

+~2

4-2

+-2

+-2

192

SECTION VI: PERSONNEL

significant disadvantage

slight disadvantage

equal

slight advantage

significant advantage

(51)

(52)

(53)

(54)

(55)

(55)

(57)

(58)

(59)

(50)

EXECUTIVE LEADERSHIP (planning and

organizing skills; experience)

SALES SUPERVISION (training and directing

of sales force)

SERVICE SUPERVISION (training and

development of service personnel)

EMPLOYEE MORALE (labor relations;

cooperation; wage and salary
policies)

TECHNICAL ASSISTANCE (application and

engineering advice)

INDUSTRY RELATIONS (participation in
national and/or regional trade
associations)

MANUFACTURER'S REPRESENTATIVES
(assistance in making sales;
planning demonstrations; solving
engineering problems)

INTERPERSONAL SKILLS (pleasant and in-

formed relations with customers)

TEAMWORK (interdepartmental communication
and cooperation)

EXPERIENCE (familiarity with customer

needs and problems)

193
PART D

 

EXHIBIT 6--Individual Distributor Firm Data Sheet

Instructions: Please answer the following questions as accurately as you can.

(93)

(94)

(95)

(96)

(97)

(93)

(99)

(100)

What was the gross sales volume of your firm last year?

 

How many field salesmen does your firm employ on a full-time

basis?

 

How many people are employed in parts inventory and control

activities?

 

How many people are employed in service and repair activities?

 

How many competitors are located in your market area?

 

How long (number of years) has your firm operated under its present

ownership?

 

How many manufacturers of construction equipment does your firm

represent?

 

How long (number of years) has your firm represented the manufacturer

of wheel mounted tractors you currently handle?

 

..14.

APPENDIX II

AGGREGATIVE ANALYSIS TABLES

19A

 

195

TABLlZII-la--Competitive comparison item response percentages.~

 

 

 

Item Sample N Percgntages‘
SigAd SlAd Equal SlDis SigDis
Product

1 Versatility MMGR 7 ----- 28.57 A1.A3 ----------
(multiple uses) MDR 56 19.6A 17.86 53.57 7.1A 1.79
DMGR 37 5.Al 32 A3 51.35 5.01 5.81
DSM 72 6.9A 33.33 5A.17 A.l7 1.39
2 Durability R239 7 A2.86 —;--- 28.57 28.57 -----
(maintenance MDR 56 19.6A 32.1A 35.71 7.1A 5.36
requirements) DMGR 37 2A 32 37.8A 29.73 5.A1 2.70
SM 72 26.39 30.56 25.00 15.28 2.78
3 Mobility MMGR 7 1O 29 1A.29 57.1“ 18.29 -----
(over-the-road MDR 56 19.6A 19.6A 57.1A 1.79 1.79
movement; maneuver- DMGR 37 18.92 18.92 59.A6 2.70 -----
ability) DSM 73 16.AA 28.77 53.A2 1.37 -----
A Economy MMGR 7 28.57 1A.29 28.57 28.57 -----
(savings of time MDR 56 12 50 26 79 28.57 25.00 7.1A
and money; DMGR 37 8.11 29.73 “3.2“ 16 22 2.70
potential resale DSM 72 18 06 20.83 27.78 29.17 A.17

value) '
5 Attachments . MMGR 7 ----- 1A.29 “2.86 28.57 1U.29
(number and variety MDR 56 1.79 12.50 55.36 26.79 3.57
available) DMGR 37 8.11 13.51 56 76 21.62 -----
DSM 72 6.9“ 20 83 63.89 8.33 -----
6 Variety MMGR 7 28.57 ----- 1A.29 A2.86 1A.29
(bucket size, MDR 56 23 21 8 93 21.A3 23.21 23.21
horsepower, DMGR 37 21 62 21 62 27 03 21.62 8.11
weight, no. DSM 73 13.70 38 36 23 29 19.18 5.A8

of models)

7 Operator Benefits MMGR 7 1A 29 57 1A 28.57 ----------
(safety, comfort, MDR 56 28 7 AA 6A 17.86 8.93 -----
Visibility, ease DMGR 37 13.51 51 35 29.73 5.U1 -----
of operation) DSM 72 3A 72 3A 72 23.61 6.9A -----
8 Engineering HMO. 7 57 1A 28.57 ----- 1A.29 -----
(operation and 63H 56 37 5O 3 .71 19 6A 7.1A —————
performance DMGR 37 32.A3 35.1A 21.62 8.11 2.70
features) DSM 73 31 51 27.AO 31.51 9.59 -----
9 Design MMGR 7 A2.86 28.57 1A.29 1A.29 -----
(appearance, MDR 56 30.36 50.00 8.93 10.71 -----
serviceability) DMGR 37 29173 A0.5A 18.92 10.81 -----
DSM 72 30.56 A3.06 15.28 9.72 1.39
10 Warranty Provisions MMGR 7 ----- A2.86 7.1A ----------
(extent and dur- MDR 56 7.1A 10.71 69.6A 12.50 -----
ation of DMGR '7 16.22 10.81 56.76 13.51 2.70
coverage) DSM 73 12.33 P6.AA 63.01 6.85 1.37

TABLE II-l (Continued)

196

 

 

 

Percentages 7
Item Sample N .
SigAd SlAd Equal SlDiS SigDis
Service
11 Delibery MMGR 7 19.29 19.29 28.57 92.86 --—--
(readily avail- MDR 56 3.57 8.93 53-57 21.93 12.50
able or rapid DMGR 37 ----- 16.22 62 16 16.22 5.91
shipment from DSM 72 5.56 16.67 50 00 22.22 5.96
mfgr.) '
12 Availability of MMGR 7 19.29 19.29 19.29 57.19 ------
Parts (mgmt. of MDR 56 16.07 12.50 25.00 30.36 16.07
repair and re- DMGR' 37 18.92 5.91 32 93 29.73 13.51
placement parts DSM 73 15.07 16.99 19.18 38.36 10.96
inventory) ‘
13 Proficiency MMGR 7 19.29 ----- 92 86 92.86 -----
(utilization of MDR 56 8.93 19.69 30.36 28.57 12.50
current methods DMGR 37 8.11 18.92 51.35 16.22 5.91
and techniques) DSM 71 9.86 19.72 90 85 26.76 2.82
19 Efficiency MMGR 7 ----- 19.29 28.57 57.19 -—-—-
(prompt scheduling MDR 56 7.19 19.69 37.50 21.93 19.29
and completion of DMGR. 37 8.11 27.03 35 19 27.03 2.70
service and repair DSM 72 11.11 23.61 30 56 27.78 6.99
work)
15 Customer Education MMGR 7 19.29 ----- 28.57 28.57 28.57
(preventive main-1 MDR 56 8.93 10.71 39.29 28.57 12.50
tenance infor- DMGR 37 5.91 18.92 32 93 27.03 16.22
mation; operator DSM 72 12.50 19.99 25.00 25.00 18.06
training)
16 Shop Facilities MMGR 7 19.29 ----- 19.29 57.19 19.29
(tools and equipment) MDR 56 8.93 7.19 37.50 32.19 19.29
' DMGR 37 13.51 10.81 35.19 90.59 -----
DSM 73 12.33 9-59 38 36 27.90 12.33
17 Customer Complaints MMGR 7 ----- 19.29 57 19 28.57 -----
(handled in prompt, MDR 56 3.57 19.69 53.57 19.29 8.93
courteous and DMGR 37 2.70 37.89 51.35 8.11 -----
fair manner) DSM 71 11.27 30.99 33.80 15.99 8.95
18 Warranty Fulfillment MMGR 7 19.29 ----- 71.93 19.29 -----
(delivery inspection MDR 56 5.36 21.93 58.93 10.71 3.57
and service; hand- DMGR 37 5.91 90.59 51 35 2.70 -----
ling of claims by DSM 73 10.96 28.77 53 92 2.79 9.11
distrib.)
19 Field Service MMGR 7 19.29 ----- 92 86 92.86 -----
(trucks equipped MDR 56 12.50 8.93 51 79 19.69 7.19
with proper tools DMGR 37 13.51 18.92 59.05 13.51 -----
and service liter- DSM 73 16.99 8.22 97.95 21.92 5.98
ature)
20- Personnel MMGR 7 ----- 19.29 92.86 92.86 -----
(trained and experi- MDR 56 10.71 8.93 96.93 26.79 7.19
enced service DMGR 37 16.22 10.81 98.65 29.32 -----
mechanics avail- DSM 73 12.33 17.81 96.58 20.55 2.79

able)

TABLE II-l (Continued)

1597

 

 

 

Percentages

Item Sample N f

' ‘ SigAd ,SlAd Equal SlDis SigDis
Financial

21 Prices MMGR 7 ----- 28.57 57.19 19.29 -----
(comparative prices MDR 56 7.19 8.93 99.69 33.93 5.36
across total pro- DMGR 36 ----- 33.33 36.11 16.67 13.89
duct line) DSM 73 9.11 27.90 31.51 19.18 17.81
22 Credit Availability MMGR 7 19.29 28.57 92.86 19.29 -----
- (sources, arrange- MDR 56 7.19 16.07 55.36 16.07 5.36
mentS) DMGR 36 ----- 8.33 80.56 11.11 -----
DSM 73 6.85 6.85 68.99 12.33 5.98
23 Credit Terms MMGR 7 19.29 19.29 71.93 ----- -----
(rates, payment MDR 56 1.79 7.19 71.93 12.50 7.19
scheduling) DMGR 36 ----- 8.33 66.67 16.67 8.33
DSM 73 9.11 6.85 71.23 10.96 6.85
29 Service Charges MMGR' 7 ----- 19.29 85.71 --e-- -----
(parts and labor MDR 56 3.57 5.36 80.36 5.36 5.36
charges) DMGR 36 ----- 13.89 80.56 5.56 ------
DSM 73 2.79 13.70 69.86 9.59 9.11
25 Trade-In Policy MMGR. 7 ---------- 57.19 92.86 -----
(terms, allowances MDR 56 1.79 25.00 32.19 30.36 10.71
for used equip- DMGR 36 ----- 30.56 38.89 25.00 5.56
ment) ‘ DSM 73 2.79 26.03 35.62 23.29 12.33
26 Rental And/Or Lease MMGR 7 ----- 28.57 57.19 19.29 -----
. Contracts (equipment MDR 56 7.19 17.86 91.07 26.79 7.19
available, charges) DMGR 36 ----- 19.99 99.99 27.78 8.33
DSM 73 5.98 15.07 38.36 30.19 10.96
'27 Manufacturer Support MMGR 7 19.29 71.93 19.29 ----------
(floor planning; MDR 56 10.71 26.79 99.69 12.50 5.36
rental and credit DMGR 36 8.33 16.67 91.67 27.78 5.56
arrangements) DSM- 69 1.95 15.99 50.72 17.39 19.99
28 Operating Capital MMGR 7 19.29 ---------- 57.19 28.57
(Distributor MDR 56 16.07 3.57 26.79 26.79 26.79
financial DMGR 36 16.67 5.56 22.22 30.56 25.00
strength) DSM 73 16.99 6.85 29.66 27.90 29.66
29 COst Control MMGR 7 ---------- 92.86 92.86 19.29
(knowledge and con- MDR 56 19.29 12.50 51.79 16.07 5.36
trol of operating DMGR 36 2.78 16.67 63.89 13.89 2.78
expenses) DSM 71 7.09 19.08 59.15 12.68 7.09
30 Billing MMGR 7 ----- ----- 71.93 28.57 .....
(form and frequency; MDR 56 7.19 5.36 78.57 7.19 1.79
cash discount DMGR 36 ----- 5.56 69.99 19.99 5.56
policies) DSM 72 2.78 8.33 12.50 2.78

TABLE II-1(Continued)

1598

 

Percentages

 

 

 

territory)

Item . Sample N
. SigAd SlAd Equal SlDis SigDis
Personal Selling
31 Product Knowledge MMGR 7 ----- 19.29 57.19 28.57 -----
(uses, features, MDR 56 8.93 . 26.79 35.71 19.69 8.93
and benefits) DMGR, 36 5.56 33.33 30.56 27.78 2.78
DSM 73 9.59 30.19 38.36 20.55 1.37
32 "People" Knowledge MMGR 7 ----- 19.29 92.86 92.86 -----
(ability to assess MDR 56 7.19 16.07 51.79 10.71 19.29
personality and DMGR 36 ----- 36.11 99.99 13.89 , -5.56
motivational DSM 73 7 9.59 39.25 97.95 8.22 -----
factors) - '
33 Strategy Formulation MMGR 7 ----- 19.29 92.86 28.57 19.29
(setting of objec- MDR 56 10.71 19.69 23.21 25.00 21.93
tives; planning DMGR 36 8.33 27.78 36.11 25.00 2.78
steps for goal DSM 73 5.98 21.92 95.21 26.03 1.37
attainment)
39 Tactical Adjustment MMGR 7 ----- 28.57 28.57 92.86 ------
(face-to-face re- MDR 56 10.71 17.86 32.19 25.00 19.29
actions; handling DMGR 36 5.56 27.78 52.78 78.33 5.56
sales resistance) DSM 73 6.85 21.92 59.79 16.99 -----
,35 Communicative Ability MMGR 7 ----- 28.57 92.86 28.57 -----
(understandable, MDR 56 8.93 16.07 98.21 16.07 10.71
interesting, be- DMGR 36 2.78 36.11 50.00 5.56 5.56
lievable, and DSM 73 6.85 28.77 58.90 5.98 -----
persuasive)
36 Source of Information MMGR 7 19.29 19.29 19.29 28.57 28.57
(reporting of com- MDR 56 3.57 10.71 96.93 23.21 16.07
petitive activities DMGR 36 2.78 19.99 33.33 30.56 13.89
and other relevant DSM 73 10.96 20.55 50.68 15.07 2.79
data to manage-
ment)
37 Market Knowledge MMGR 7 19.29 ----- 92.86 19.29 28.57
(awareness of growth MDR 56 5.36 17.86 26.79 28.57 21.93
accounts; current DMGR 36 5.56 13.89 97.22 25.00 8.33
prospect lists; DSM 72 5.56 19.99 51.39 22.22 1.39
key decision ,
makers)
38 Reputation MMGR 7 19.29 ----- 19.29 57.19 19.29
(duration and MDR 56 16.07 17.86 17.86 28.57 19.69
strength of DMGR 36 16.67 8.33 99.99 22.22 8.33
account relation- DSM 73 17.81 19.18 28.77 21.92 12.33
ships)
39 Experience and Train- MMGR 7 19.29 ----- 28.57 92.86 19.29
ing (better sales MDR 56 8.93 16.07 37.50 23.21 19.29
meetings; home DMGR 36 5.56 22.22 38.89 30.56 2.78
study courses; DSM 72 13.89 16.67 93.06 16.67 9.72
self-improvement
efforts)
90 Planning (usage of MMGR 7 ----- 19.29 28.57 57.19 -----
time; management MDR 56 3.57 8.93 39.29 30.36 17.86
of each call, each DMGR 36 ----- 25.00 36.11 33.33 5.56
account, and total DSM 72 8.33 23.61 98.61 16.67 2.78

TABLE 11-1(Continued)

199

 

 

 

Percentages
Item Sample N -
- SigAd SlAd Equal SlDis SigDis
Promotion
91 Sales Aids MMGR 7 28.57 ----- 92.86 28.57 -----
(Product liter- MDR 56 1.79 19.69 51.79 23.21 3.57
ature; manuals DMGR 37 2.70 16.22 98.65 27.03 5.91
and catalogs; DSM 73 6.85 12.33 56.16 23.29 1.37
technical material) ‘
92 Sales Promotion MMGR 7 ----- 28.57 57.19 19.29 -----
(advertising MDR 56 8.93 21.93 37.50 23.21 8.93
specialties; sales DMGR 37 2.70 13.51 51.35 29.73 2270
incentive pro- DSM 73 2.79 26.03 97.95 19.18 .11
grams) ‘
93 Mfgr's Advertising MMGR 7 19.29 28.57 28.57 28.57 -----
(strength of cor- MDR 56 7.19 10.71 39.29 33.93 8.93
porate image; DMGR 37 8.11 13.51 5.91, 29.73 93.29
lead generation) DSM 73 8.22 15.07 28.77 31.51 16.99
99 Distrib. Advertising MMGR . 7 ----- 19.29 28.57 92.86 19.29
(regional construc- MDR 56 5.36 19.29 92.86 23.21 19.29
tion publications; DMGR 37 8.11 18.92 27.03 32.93 13.51
newspapers and DSM 73 2.79 16.99 95.21 32.88 2.79
other local media)
95 Direct Mail MMGR 7 19.29 19.29 28.57 19.29 28.57
(selectivity of MDR 56 3.57 16.07 51.79 17.86 10.71
lists; prospect DMGR 37 8.11 16.22 95.95 29.32 5.91
responses) DSM 72 9.17 11.11 59.72 16.67 8.33
96 Visual Aids MMGR 7 19.29 28.57 92.86 ----- 19.29
' (photos; flip- MDR 56 1.79 8.93 57.19 21.93 10.71
charts; film DMGR 37 ----- 13.51 62.16 18.92 5.91
strips) D81 72 9.17 20.83 50.00 22.22 2.78
97 Customer Referrals MMGR 7 19.29 19.29 92.86 28.57 -----
(endorsement by MDR 56 12.50 19.69 17.86 28.57 21.93
present customers) DMGR 37 10.81 13.51 27.03 32.93 16.22
DSM 73 12.33 16.99 27.90 28.77 15.07
98 Publicity MMGR 7 ----- 19.29 57.19 ----- 28.57
(mention of firm MDR 56 3.57 17.86 26.79 39.29 12.50
and/or personnel DMGR 37 2.70 10.81 37.89 32.93 16.22
in trade or local DSM 73 8.22 9.59 96.58 28.77 6.85
press; community
relations)
99 Personal Contacts MMGR 7 ----- 28.57 28.57 28.57 19.29
(executive level MDR 56 8.93 12.50 30.36 25.00 23.21
contacts; customer DMGR 37 10.81 10.81 98.65 29.32 5.91
relations) DSM 73 8.22 21.92 35.62 21.92 12.33
50 Demo. Proficiency MMGR 7 19.29 19.29 19.29 57.19 .....
(sales and service MDR 56 12.50 10.71 35.71 16.07 25.00
cooperation; DMGR 37 2.70 29.32 32.93 35.19 5.91
DSM 73 6.85 28.77 28.77 27.90 8.22

equip. operating
skills) ,

TABLE 11-1(Continued)

200

 

 

 

Percentages
Item . Sample N a;_ ‘
‘ . SigAd SlAd Equal SlDis SigDis
Personnel
51 Executive Leader- MMGR 7 19.29 ----- 28.57 57.19 --q--
ship (planning and MDR 56 10.71 16.07 36.79 23.21 23.21
organizing skills; DMGR. 36 8.33 16.67 52.78 22.22 --—--
experience)‘ DSM 73 9.59 26.03 39.25 27.90 2.79
52 Sales Supervision MMGR 7 19.29 ----- 19.29 71.93 ------
(training and MDR 56 1.79 21.93 19.69 30.36 26.79
directing of DMGR 36 5.56 27.78 33.33 33.33 7 ~—---
sales force) DSM 73 16.99 15.07 35.62 26.03 6.85
53 Service Supervision MMGR 7 19.29 ----- 28.57 57.19 -----
(training and MDR 56 5.36 21.93 25.00 30.36 17.86
development of DMGR 36 , 11.11 11.11 99.99 30.56 2.78
service personnel) DSM 73 8.22 20.55 31.51 32.88 6.85
59 Employee Morale MMGR. 7 19.29 ----- 71.93 19.29 -----
(labor relations; MDR 56 8.93 16.07 99.69 17.86 12.50
cooperation; wage DMGR 36 ---—- 36.11 52.78 11.11 ------
and salary- DSM 73 10.96 20.55 50.68 9.59 8.22
policies) '
55 Tech. Assistance MMGR 7 19.29 19.29 28.57 92.86 -----
(application and MDR 56 5.36 19.69 91.07 21.93 12.50
engineering DMGR 36 8.33 2.78 36.11 38.89 13.89
advice) DSM 73 10.96 19.18 31.51 30.19 8.22
' 56 Industry Relations MMGR 7 ----- 28.57 57.19 19.29 -----
(participation in MDR 56 7.19 8.93 60.71 19.29 8.93
national and/or DMGR 36 5.56 8.33 55.56 30.56 -----
regional trade DMS 72 11.11 13.89 50.00 20.83 9.17
associations)
57 Mfgr's Reps MMGR 7 19.29 92.86 19.29 19.29 19.29
(assistance in MDR 56 19.69 19.29 50.00 19.29 1.79
making sales; DMGR 36 ----- 5.56 33.33 33.33 27.78
planning demon- DSM 73 8.22 16.99 91.10 20.55 13.70
strations; solv-
ing engineering
problems)
58 Interpersonal Skills MMGR 7 ----- 19.29 71.93 19.29 -----
(pleasant and in- MDR 56 3.57 21.93 ~60.7l 12.50 1.79
formed relations DMGR 36 5.56 19.99 66.67 8.33 -----
with customers) DSM 72 6.99 26.39 59.72 5.56 1.39
59 Teamwork MMGR 7 ---------- 85.71 19.29 -----
(interdepartmental MDR 56 8.93 16.07 98.21 19.29 12.50
communication and DMGR 36 2.78 30.56 58.33 8.33 -----
cooperation) DSM 73 6.85 15.07 92.97 31.51 9.11
60 Experience MMGR 7 ----- 28.57 28.57 92.86 -----
(familiarity with MDR 56 12.50 19.29 30.36 25.00 17.86
customer needs DMGR 36 8.33 30.56 91.67 19.99 -----
and problems) DSM 73 10.96 21.92 95.21 17.81 9.11

 

201

TABLE II-2émResponses to competitive comparison items.

 

‘ Response Frequencies

Standard. Significance Test

 

 

Item Sample Mean N
Deviation Egg 2% Equal Sis 3:: Sample Level
Product
1 Versatility MMGR 3.286 0.952 7 — 2 5 - - _
MDR 3.969 0.999 ‘ 56 11 10 30 9 1 MDR-DMGR n.s.
DMGR 3 270 0.859 37 2. 12 19 2 2 MDR-DSM n.s.
DSM 3 903 0.739 72 5 29 39 3 1 DMGR-DSM n.s.
2 Durability MMGR 3 571 1.299 7 3 e 2 2 -
MDR 3 536 1.052 56 11 18 20 9 3 MDR-DMGR n.s.
DMGR 3 757 0.970 37 9 19 11 2 1 MDR-DSM n.s.
DSM 3 625 1.111 72 19 22 18 11 2 DMGR-DSM n.s
3 Mobility MMGR 3 286 0.881 7 1 1 9‘ 1 - -
MDR 3 536 0.886 56 11 11 32 1 1 MDR-DMGR n.s.
DMGR 3 591 0.825 37 7 7 22 1 - MDR-DSM n.s.
DSM 3 603 0.772 73 12 21 39 1 - DMGR-DSM n.s.
9 Economy 1 MMGR 3 929 1.178 7 2 l 2 2 -
MDR 3 125 1.135 56 7 15 16 19 9 MDR-DMGR n.s.
DMGR 3 293 0.913 37 3 11 16 6 1 MDR-DSM n.s.
DSM 3 199 1.162 72 13 15 20 21» 3 DMGR-DSM n.s
5 Attachments MMGR 2 571 0.909 7‘ — 1 3 2 1
' MDR 2 821 0.758 56 1 _31 15 2 MDR-DMGR n.s.
DMGR 3.081 0.818 37 3 5 21 8 — MDR-0M3 - n.s.
DSM 3.269 0.707 72 5 15 96 _ 6 - DMGR-DSM .05
6 Variety MMGR 2.857 1.957 7 2 - 1 3 1
MDR 2.857 1.969 56 - 13 5 12 13 13 MDR-DMGR n.s.
DMGR_ 3.270 1.299 37 8 8 10 8 3 MDR-DSM n.s.
DSM 3 56 1.103 73 10 28 17 9 DMGR-DSM .05
7 Operator . MMGR 3 57 0.639 7 1 9 2 - -
Benefits MDR 3.929 0.909 56 16 25 10 5 - MDR-DMGR n.s.
DMGR 3.730 0.759 37 5 19 11 2 - MDR—DSM n.s.
DSM 3.972 0.928 72 25 25 17 5 - DMGR-DSM n.s.
8 Engineering MMGR 9.286 1.030 7 9 2 - 1 -
. MDR 9.036 0.925 56 21 20 11 9 - MDR-DMGR n.s.
DMGR 3.865 1.099. 37 12 13 8 3 1 MDR-DSM n.s.
. DSM 3.808 0.988 73 23 20 23 7 - DMGR-DSM .05
9 Design MMGR 9.00 1.069 7 3 2 1 1 -
MDR 9.00 0.906 56 17 28 5 6 — MED—DMGR n.s.
DMGR 3.892 0.952 37 11 15 7 9 - MDR-DSM n.s.
DSM 3.917 0.982 72 22 31 11 7 1 DMGR-DSM n.s.
10 Warranty MMGR 3.929 0.995 7 - 3 9 — —
Provisions MDR 3.125 0.709 56 9 6 39 7 - MDR-DMGR n.s.
DMGR 3.293 0.970 37 6 9 21 9 1 MDR-DSM n.s.
DSM 3.315 0.82 73 9 12 96 5 1 DMGR-DSM .01
Service -
11 Delivery MMGR 3.000 1.069 7 1 1 2 3 —
MDR 2 696 0.929 56 2 5 30 12 7 MDR-DMGR n.s.
DMGR 2.892 0.727 37 - 6 23 6 2 MDR-DSM n.s.
DSM ~ 2.999 0.911 72 9 12 36 16 9 DMGR—DSM .01
12 Availability MMGR 2.857 1.125 7 l l l —
of Parts MDR 2 821 1.297 56 9 7 19 17 9 MDR-DMGR n.s.
' DMGR 2 865 1.277 37 7 2 12 11 5 MDR-DSM n.s.
DSM 2 863 1.253 73 11 12 19 28 8 DMGR-DSM n.s.
13 Proficiency MMGR 2.857 0.990 7 1 - 3 .3 —
MDR 2.839 1.196 56 5 . 11 17 16 7 MDR-DMGR n.s.
DMGR 3.081 0.991 37 3 7 19 6 2 MDR-DSM n.s.
DSM 3.070 0.98 71 7 19 29 13 2 DMGR-DSM n.s.
19 Efficiency MMGR 2 571 0.72 7 - 1 2 -
MDR 2.839 1.119 56 9 11 21 12 8 MDR-DMGR n.s.
DMGR 3 108 0.980 37 3 10 13 10 1 MDR-DSM n.s.
DSM 3.092 1.1114 72 8 17 22 20 3 DMGR-DSM n.s.
15 Customer MMGR 2.929 1.299 7 1 - 2
Education MDR 2.750 1.090 56 5 6 22 16 7 MDR-DMGR n.s.
DMGR 2.703 1.112 37 2 7 12 10 6 MDR-DSM n.s.
DSM 2.833 1.280 72 9 19 18 18 13 DMGR-DSM n.s.

202

TABLE II-2 (continued)

 

Response Frequencies - Significance Test

 

 

Standard
Item Sample Mean N .
Deviation Egg 2; Equal Sis gig Sample Level
Service (Cont.)
16 Shop MMGR 2.929 1.178 7 1 - 1 9 1
Facilities MDR 2.693 1.093 . 56 5 9 21 18 8 MDR-DMGR n.s.
DMGR 2.973 1.026 37 5 9 13 15 - MDR-DSM n.s.
DSM 2.822 1.151 73 9. 7 28 20 9 DMGR-DSM n.s.
17 Customer - MMGR 2.857 0.639 7 - 1 9 2 -
Complaints MDR 2.996 0.915 56 2 11 30 8 5 MDR-DMGR n.s.
DMGR 3.351 0.666 37 1 19 19 3 - MDR-DSM n.s.
DSM 3.211 1.099 71 8 22 29 11 6 DMGR-DSM n.s.
18 Warranty MMGR 3.193 0.833 7 1 - 5 1 -
Fulfillment MDR 3.193 0.811 56 3 12 33 6 2 MDR-DMGR n.s.
DMGR 3.986 0.692 37 2 15 19 1 - MDR-DSM n.s.
DSM 3.397 0.872 73 8 21 39 ‘ 2 3 DMGR-DSM n.s.
19 Field Service MMGR 2.857 0.990 7 1 - 3 3 -
MDR 3.000 1.035 56 7 5 29 11 9 MDR-DMGR n.s.
DMGR 3.329 0.872 37 9 7 20 5 - MDR-DSM n.s.
. DSM 3.802 1.082 73 12 6 35 16 9 DMGR-DSM .05
20 Personnel MMGR 2.719 0.700 7 - 1 3 3' -
MDR 2.893 1.030 56 6 - 5 26 15 9 MDR-DMGR n.s.
DMGR 3.189 0.982 37 6 9 18 9 - MDR-DSM n.s.
DSM 3.169 ' 0.979 73 9 13 39 15 2 DMGR-DSM ' n.s.
Financial
21 Prices MMGR 3.193 0.639 7 - 2 9 1 -
MDR . 2.786 0.939 56 9 9 25 19 3 MDR—DMGR n.s.
DMGR 2.889 1.021 36 - 12 13 6 5 MDR-DSM n.s.
081 2.808 1.193 73 3 .20 23 19 13 DMGR-DSM .01
22 Credit MMGR 3.929 0.909 7 1 2 3 1 -
Availability MDR 3.036 0.906 56 9 9 31 9 3 MDR-DMGR n.s.
DMGR 2.972 0.990 36 - 3 29 9 - MDR-DSM n.s.
DSM 2.973 0.827 73 5 5 50 9 9 DMGR-DSM n-S-
23 Credit Terms MMGR 3.929 0.728 7 l l 5 - -
MPH 2.839 0.726 5 1 9 90 7 9 MDR-DMGR n.s.
DMCH 2.750 0.722 36 - 3 29 6 3 MDR-DSM n.s.
DSM 2.909 0.779 7 3 5 52 8 5 DMGR-DSM n.s.
29 Service MMGR 3.193 0.350 7 - 1 0 - -
Charges MDR 2.969 0.680 56 2 3 95 3 3 MDR-DMGR n.s.
DMGR 3.083 0.933 36 - 5 29 2 - MDR-DSM n.s.
DSM 3.019 0.712 73 2 10 51 7 3 DMGR-DSM n.s.
25 Trade-in MMGR 2.571 0.995 7 - - 9 3 -
Policy MDR ].768 1.000 56 1 19 18 17 6 MDR-DMGR n.s.
DMGR 2.999 0.880 36 - 11 19 9 2 MDR-DSM n.s.
DSM 2.836 1.039 73 2 19 26 17 9 DMGR-DSM .05
26 Rental and/or MMGR 3.193 0.639 7 - 2 9 1 -
Lease - MDR 2.911 1.005 56 9 10 23 15 9 MDR-DMGR n.s.
Contracts DMGR 2.750 0.862 36 - 7 16 10 3 MDR-DSM n.s.
DSM 2.790 1.021 73 9 11 28 22 8 DMGR—DSM .05
27 Manufacturer MMGR ,9.000 0.535 7 1 5 l - -
Support MDR 3.250 0.987 56 6 15 25 7 3 MDR-DMGR n.s.
DMGR 2.999 0.998 36 3 6 15 10 2 MDR-DSM n.s.
DSM 2.725 0.996 69 1 11 35 12 10 DMGR-DSM .05
28 Operating MMGR 2.193 1.259 7 .1 - - 9 2
Capital MDR 2.559 1.399 56 9 2 15 15 15 MDR-DMGR n.s.
DMGR 2.583 1.362 36 6 . 2 8 11 9 MDR-DSM n.s.
DSM 2.630 1.360 73 12 5 18 20 18 DMGR-DSM .05
29 Cost MMGR 2.286 0.700 7 - - 3 3 1
Control MDR 3.193 1.025 56 8 7 29 9 3 MDR-DMGR n.s.
DMGR 3.028 0.726 36 1 6 23 5 1 MDR-DSM n.s.
DSM 3.019 0.911 71 5 10 92 9 5 DMGR-DSM n.s.
30 Billing MMGR 2.719 0.952. 7 — - 5 2 —
MDR 3.089 0.689 56 9 3 99 9 1 MDR-DMGR n.s.
DMGR 2.750 0.690 36 - 2 25 7 2 MDR-DSM n.s.
DSM 2.958 0.655 72 2 6 53 9 2 DMGR-DSM n.s.

203

TABLE II—2 (continued)

 

Response Frequencies I Significance Test

 

Standard

 

 

Item Sample Mean N '
Deviation :33. i; Equal 813 818 Sample , Level
Personal Selling
31 Product MMGR 2.857 0.639 7 - 1 9 2 - ,
Knowledge MDR 3.071 1.083 '56 5 15 20 11 5 MDR-DMGR n.s.
DMGR 3.111 0.965 36 2‘ 12 ll 10 1 MDR-DSM n.s.
, DSM 3.260 0.937 73 7 22 28 15 l DMGR-DSM .05
32. "People" MMGR 2.719 0.700 7 ’- l 3 3 -
Knowledge MDR 2.911 1.057 56 9 9 29 6 8 MDR-DMGR n.s.
DMGR 3 111 0.893 36 -- 13 16 5 2 MDR-DSM n.s.
DSM 3 952 0.777 73 7 25 35 6 —- DMGR-DSM n.s.
33 Strategy MMGR 2.571 0.909 7 — 1 3 2 l -
Formulation MDR 2 732 1.289 56 6 11 13~ 19 12 MDR-DMGR n.s.
DMGR 3 139 0.976 36 3 10 13 9 l MDR-DSM n.s.
DSM 3 091 0.867 73 9 16 33 19 1 DMGR-DSM .01
39 Tactica1~ MMGR 2.857 0.833 7 - 2 2 3 -
Adjustment MDR 2 857 1.187 56 6 10 18 19 8 MDR-DMGR n.s.
DMGR 3 199 0.876 36 2 10 19 3 2 MDR-DSM n.s.
DSM 3 192 0.788 73 5 16 90 12» -- DMGR-DSM .01
35 Communicative MMGR 3 000 0.756 7' - 2 3 2 -.
Ability ' MDR 2 969 1.052 56 - 5 9 27 9 6 MDR-DMGR n.s.
DMGR 3 250 0.829 36 l 13 18 2 2 MDR-DSM - n.s.
SM 3.370 0.693 73 5 21 93 9 -- DMGR-DSM .05
36 Source of MMGR 2.571 1.900 7 1 l l ' 2 2
Information MDR 2 625 0.992 56 2 6 26 13 9 MDR-DMGR n.s.
DMGR_ 2.667 1.027 36 l 7 12 11 5 MDR-DSM .05
DSM 3 219 0.925 73 8 15 37 11 2 DMGR-DSM n.s.
37 Market MMGR 2 571 1.299 7 l - 3 2
Knowledge MDR 2.571 1.163 56 3 10 15 16 12 MDR-DMGR n.s.
DMGR 2.833 0.957 36 2 5 l7 9 3 MDR-DSM n.s.
DSM 3.056 0.831 72 9 19 37 16 1 DMGR-DSM .05
38 Reputation MMGR 2.929 1.178 7 1 — 1 l
NEE 2.821 1.369 56 9 10 10 16 11 MDR-DMGR n.s.
DMGH 3.028 1.19? 36 6 l6 8 3 MDR-DSM n.s.
. DSM 3.08? 1.26‘ 73 13 19 21 16 9 DMGR-DSM n.s.
39 Experience MMGR 2.571 1.17 7 1 - 2 3 1
and Training MDR 2.821 1.136 56 5 9 21 13 8 MDR—DMGF n.s
DMGR 7 972 0.928 36 2 8 l9 11 l MDR-DSM n.s
DSM 3 083 1.127 7? 10 12 31 12 7 DMGR-DSM n.s
90 Planning _ MNGR 2 571 0.728 7 - 1 2 9 -
MDR 2.500 1.000 56 2 5 22 17 10 MDR-DMGR n.s
DMGR .2806 0.876 36 -- 9 13 12 2 MDR-DSM n.s
DSM 3.181 0.903 72 6 17 35 12 2 DMGR-DSM n.s
Promotion
91 Sales Aids MMGR 3.286 1.161 7 2 — 3 2 -
MDR 2.929 0.799 56 1 11 29 13 2 MDR-DMGR n.s.
DMGR 2.838 0.855 37 1 6 18 10 2 MDR-DSM n.s.
DSM 3.000 0.828 73 5 9 91 17 1 DMGR-DSM n.s.
92 Sales MMGR 3.193 0.639 7 - 2 9 1 -
Promotion MDR 2.982 1.077 56 5 12 21 13 5 MDR-DMGR n.s.
‘ DMGR 2.838 0.789 37 1 5 19 11 1 MDR—DSM n.s.
DSM 3.091 0.851 73 .2 19 35 19 3 DMGR=DSM n.s.
93 Manufacturer's MMGR 3.286 1.030 7 1 2 2 2 -
Advertising MDR 2.732 1.009 56 9 . 6 22 19 5 MDR-DMGR .05
DMGR 2.135 1.319 37 3 5 2 11 16 MDR-DSM n.s.
. DSM 2.671 1.15 73 6 11 21 23 12 DMGR-DSM n.s.
99 Distributor MMGR 2.929 0.90 7 - 1 2 3 1
Advertising ‘ MDR 2.732 1.099 56 3 8 29 13 8 MDR-DMGR n.s.
DMGR 2.757 I 1.199 37 3 7 10 12 5 MDR—DSM n.s.
DSM 2.836 0.828 73 2 12 33 29 2 DMGR—DSM n.s.
95 Direct Mail MMGR 2.719 1.385' 7 l 1 2 1 2
MDR 2.839 0.991 56 2 9 29 10 6 MDR-DMGR n.s.
DMGR 2.973 0.972 37 3 6 17 9 2 MDR-DSM n.s.
DSM 2.861 0.871 72 3 8 93 12 6 DMGR-DSM n.s.
96 Visual Aids MMGR 3.286 1.161 . 7 1 2 3 - 1
MDR 2.696 0.893 , 56 1 5 32 12 6 MDR-DMGR n.s.
DMGR 2.838 0.717 37 -- 5 23 2 MDR-DSM - n.s.
DSM 3.019 0.892 72 3 15 36 16 2 DMGR-DSM n.s.

209

TABLE II-2 (continued)

 

Response Frequencies‘ Significance Test

 

Standard

 

Item Sample Mean N -
- Deviation :38 i; Equal 518 3:: Sample Level
Promotion (Cont.)
97 Customer MMGR 3.193 0.990 7 l 1 3 2 -
Referrals MDR 2.732 1.329 . 56 7 11 10 16 12 MDR-DMGR ' n.s.
DMGR 2.703 1.205 37 9 5 10 12 6 MDR-DSM n.s.
DSM 2.822 1.231 73 9 12 20 21 11 DMGR-DSM n.s.
98 Publicity ' MMGR 2.571 1.050 7 - 1 9 — 2
* MDR 2.607 1.030 56 2 10 15 22 7 MDR—DMGR n.s.
DMGR 2.519 0.976 37 l 9 19 12 6 MDR-DSM n.s.
DSM 2.836 0.979 73 6 7 39 21 5 DMGR-DSM n.s.
99 Personal MMGR 2.719 1.030 7 - 2 2 2 1
Contacts MDR 2.589 1.221 56 5 7 174 19 13 MDR-DMGR ' n.s.
DMGR 2.973 1.000 37 9 9 l8 _ 9 2 MDR-DSM n.s.
DSM 2.918 1.120 73 6 16 26 16 9 DMGR-DSM n.s.
50 Demonstration MMGR 2.857 1.125 7 l l 1 9 -
Proficiency MDR 2.696 1.299 56 7 6 20 9 l9 MDR-DMGR n.s.
DMGR 2.838 0.995 37 1 9 12 13 2 MDR-DSM n.s.
DSM 2.986 1.079 73 5 21 21 20 6 DMGR-DSM n.s.
Personnel .
51 Executive MMGR 2.719 . 1.030 7 l - 2 9 - ,
Leadership MDR 2.679 1.283 56 6 9 15 13 13 MDR-DMGR n.s.
. DMGR 3.111 0.893 '36 3 6 19 8 -- MDR-DSM n.s.
DSM 3.123 1.006 73 7 19 25 20 2 ' DMGR—DSM n.s.
52 Sales MMGR 2.571 1.050 7 - 1 - 1 5 -
Supervision MDR ' 2.911 1.196 56 1 12 ll 17 15 MDR-DMGR n.s.
DMGR 3.056 0.911 36 2 10 12 12 -- MDR-DSM n.s.
‘ DSM 3.082 1.156 73 12 11 26 19 5 DMGR-DSM .05
53 Service MMGR 2.719 1.030 7 l - 2 9 -
Supervision MDR 2.661 1.159 56 3 12 19 17 10 MDR-DMGR n.s.
DMGR 2.972 0.986 36 9 9 16 11 1 MDR-DSM n.s.
DSM 2.909 1.062 73 6 15 23 29 5 DMGR-DSM n.s
59 Employee MMGR 3.193 0.833 7 l - 5 l -
Morale MDR 2.911 1.090 56 5 9 25 10 7 MDR-DMGR n.s.
. DMGR 3.250 0.690 36 -- 13 19 9 -- MDR-DSM n.s.
DSM 3.169 1.021 73 8 15 37 7 6 DMGR-DSM .05
55 Technical MMGR 3.000 1.069 7 1 1 2 3 -
Assistance MDR 2.839 1.098 56 3 11 23 12 7 MDR-DMGR n.s.
DMGR 2.528 1.090 36 3 1 13 19 5 MDR-DSM n.s.
DSM 2.995 1.121 73 8 19 23 22 6 DMGR-DSM n.s.
56 Industry MMGR 3.193 0.639 7 - 2 9 1 -
Relations MDR 2.911 0.931 56 9 5 39 8 5 MDR-DMGR n.s.
DMGR 2.889 0.779 36 2 3 20 11 -- MDR-DSM n.s.
DSM 3.069 0.976 72 8 10 36 15 3 DMGR-DSM n.s.
57 Manufacturer's MMGR 3.286 1.278 7 1 3 1 1 1
RepresentativesMDR 3.357 1.008 56 11 8 28 8 1 MDR-DMGR .01
DMGR 2.167 0.898 36 -- 2 12 12 10 MDR-DSM n.s.
'DSM . 2.899 1.106 73 6 12 30 15 10 DMGR-DSM n.s.
58 Interpersonal MMGR 3.000 0.535 7 - 1 5 l -
Skills MDR 3.125 0.733 56 2 12 39 7 1 MDR-DMGR n.s.
DMGR 3.222 0.671 36 2 7 29 3 __ MDR-DSM n.s.
DSM 3.319 0.792 72 5 19 93 9 1 DMGR-DST n.s.
59 Teamwork MMGR 2.857 0.350 7 - - 6 1 -
MDR 2.996 1.076 56 5 9 27 8 7 MDR-DMGR n.s.
DMGR 3.278 0.650 36 l ' ll 21 3 -- MDR-DSM n.s.
DSM 2.890 0.995 73 5 11 31 23 3 DMGR-DSM .01
60 Experience MMGR 2.857 0.833 7 - 2 2 3 -
MDR 2.786 1.299 56 7 8 17 19 10 MDR-DMGR n.s.
DMGR 3.278 0.870 36 3 11 15 7 -- MDR-DSM n.s.
DSM 3.178 0 8 16 33 13 3 DMGR-DSM .01

.989 73

 

C‘!\i${.l;

2(15

Iil-l.--Manufacturer-dlstributor combination item mean scores.

 

Combination

 

 

 

Item Competitive
A .8 C D E F 0
Product
1 Versatility 3.500 ' 3.387 3.538 3.316 3.655 2.829 3.250
2 Durability 3.038 9.871 3.896 2.997 . 3.395 3.588 3.292
3 Mobility 3.808 3.989 3.269 3.997 3.291 3.722 3.625
9 Economy 2.692 9.677 3.231 ,2.892 3.103 2.529 2.625
5 Attachments 3.115 3.323 3.269 2.526 3.103 2.765 2.958
6 Variety 2.000 3.032 3.659 2.105 9.103 2.999 3.875
7 Oper. Benefits 3.615 9.581 3.962 3.737 9.069 3.912 3.592
8 Engineering 9.000 9.792 3.885 3.579 3.82 3.500 3.958
9 Design 3.808 9.989 9.231 3.579 9.207 3.235 3.592
10 Warranty Provisions 2.885 3.097 3.159 3.105 . 3.655 3.999 ' 3.375
Total 32.961 39.678 36.039 31.683 36.309 31.963 33.592
Service 7
11 Delivery -3.038 2.806 2.385 2.997 2.862 3.056 3.000
12 Avail. of Parts 1.923 9.806 2.731 3.000 2.379 2.999 2.208
13 Proficiency 2.962 9.226 2.538 2.892 2.857 2.529 3.092
19 Efficiency 2.385 9.065 2.885 3.211 2.759 2.829 2.958
15 Customer Educ. 2.038 9.355 2.896 2.579 2.983 2.176 2.292
16 Shop Facilities ,2.159 9.258 2.923 2.579 2.395 2.778 2.625
17 Cust. Complaints 2.885 3.779 3.192 3. 58 3.291 2.882 2.565
18 Warr. Fulfillment 3.115 9.000 3.192 3.158 3.919 3.000 3.083
19 Field Service 2.308 9.598 3.077 2.895 2.966 2.889 2.583
20 Personnel 2.396 9.598 2.808 2.789 3.039 2.889 2.583
Total 29.659 91.386 28.077 29.158 28.390 27.967 .939
Financial
'21 Prices 2.885 1.733 2.577 2.892 3.983 2.778 3.667
22 Credit Avail. 2.769 3.367 2.808 3.053 3.069 3.111 2.875
23 Credit Terms 2.577 2.567 2.923 2.997 3.138 3.056 3.000
29 Service Charges 2.962 3.100 3.102 2.997 2.966 3.111 2.833
25 Trade-In Policy 2.896 2.233 3.077 2.979 3.395 3.111 2.708
26 Rental/Lease 2.692 2.500 3.159 2.632 3.039 2.778 2.875
27 Mfgr. Support 3.090 2.967 2.923 2.833 3.219 3.222 3.935
28 Uper. Capital 1.538 9.600 1.923 2.689 2.998 1.889 2.958
29 Cost Control 2.769 3.967 2.885 3.056 2.969 2.611 2.667
30 Billing 3.000 3.267 2.896 3.000 2.897 2.778 2.750
Total 27.078 29.801 ’8.308 28.968 .558 28.995 29.268-
Personal Selling
31 Product Know. 2.808 3.833 3.038 2.789 3.998 2.722 3.092
32 "People" Know. 2.885 3.933 3.077 2.997 3.276 2.833 2.958
33 Strategy Form. 2.577 9.033 2.808 2.526 2.931 2.667 2.667
39 Tactical Adjust. 2.896 3.900 2.577 2.892 3.207 3.056 2.833
35 Comm. Ability 2.962 3.867 3.115 3.000 3.207 3.000 3.000
36 Source of Info. 2.692 9.100 2.962 2.921 2.793 2.556 2.750
37 Market Know. 2.923 9.033 2.692 2.316 2.759 2.778 2.935
38 Reputation 2.385 9.667 2.500 2.997 3.069 2.389 2.250
39 Exp. & Training 2.769 9.267 2.538 2.921 2.966 2.556 2.652
90 Planning 2.615 3.833 2.692 2.979 2.862 2.556 2.565
Total 26.962 90.966 27.999 .683 30.518 27.113 27.152

 

WI“, t ’9

TABLE 11191 (continued)

2(36

 

Competitive Combination

 

 

Item ----- -
A -B C D E F G

Promotion
91 Sales Aids 2.808 3.935 2.659 2.895 2.759 2.221 3.030
92 Sales Promotion 2.962 3.695 3.231 2.789 3.039 2.167 2.553
93 Mfgr's. Advert. -2.269 3.968 2.308 2.979 2.919 2.333 2.092
99. Distrib. Advert. 2.500 3.871 2.659 '2.632 2.655 2.278 2.375
95 Direct Mail 2.615 9.097 2.692 2.789 2.719 2.000 2.667
96 Visual Aids 2.615 3.779 2.808 2.979 2.690 2.556 2.913
97 Customer Referrals 2.269 9.581 2.896 2.263 2.729 2.056 1.958
98 Publicity 2.923 3.839 2.577 2.316 2.517 2.500 2.208
99 Personal Contacts 2.308 3.935 ].769 2.689 . 2.897 ' 2.999 2.250
50 Demo. Proficiency 2.962' 9.065 2.962 2.263 3.138 2.667 2.917

Total 25.231 39.710 27.001 25.579 27.592 23.223 29.913
Personnel
51 Exec. Leadership '2.396 9.333 2.896 2.689 2.966 2.722 2.917
92 Sales Superv. 2.923 9.267 2.577 2.316 3.069 2.333 2.292
53 Service Superv. 2.192 9.333 2.577 3.000 2.690 2.278 2.375
59 Employee Morale 2.962 3.967 3.159 3.211 13.172 2.72 2.750
55 Tech. Assistance 2.385 9.333 3.159 2.526 2.983 2.611 2.958
56 Industry Rels. '2.538 3.800 2.760 2.895 3.069 2.722 2.833
57 Mfgr's. Reps. 2.538 3.833 2.385 2.921 2.690 2.611 3.958
58 Interper. Skills 2.962 9.033 3.120 3.053 3.291 3.056 2.833
59 Teamwork 2.923 3.867 2.885 2.895 2.828 2.889 2.958
60 Experience 2.500 9.933 2.808 2.997 2.931 2.778 2.667

Total 29.769 91.199 28.266 27.998 29.139 26.7f2 27.591
Element
Product 2.961 39.678 36.039 31.683 36.309 31.90%
Service 29.659 91.386 28.077 29.158 28.390 27.9a;
Financial 27.078 29.801 28.308 28.968 30.558 28.995 2'
Pers. Selling 26.962 90.966 27.999 26.683 30.518 27.113 27 it
Promotion 25.231 39.710 27.001 25.579 27.592 23.223 23.9 3
Personnel 29.769 91.199 28.266 27.998 29.139 26.722 27 5’1

Composite Total 161.155 232.290 175.190 169.519 182.906 169.933 168.355

 

2(17

TABLE Lil—2.-—K1L1"1010r0r—d‘:tribuzor combination item standard deviation scores.

 

 

 

 

Combinations
Iten1
' A .B c D E F 0
Product
1 Versatility 0.747 3.748 0.929 0.862 0.708 0.706 0.878
2 Durability 1.126 0.335 0.769 0.887 0.957 0.691 1.020
3 Mobility 0.878 0 615 0.762 0.887 0.625 0.731 1.033
4’ Economy 0.821 0.467 0.750 .1.136 0.803 1.036 0.857
5 Attachment: 0.640 0.642 0.592 0.819 0.803 1.059 0.735
6 Variety 0.784 0 999 0.829 1.209 1.029 1.268 1.235
7 Oper. Benefit; 0.738 0 555 0.75 1.068 0.521 0.844 1.079
8 Engineering 0.832 0.438 0.974 0.990 0.746 1.014 1.224
9 Design 0.556 0.561 0.639 1.042 0.804 1.113 1.290
10 Warranty FroYi.ious 0.640 0.962 0.717 0.640 v0.800 0.831 '0.753
Total 7.762 6 322 7.720 9.540 7.796 9.293 10.104
Service
11 Delivery 0.706 0 780 1.003 0.605 0.860 1.129 0.933
12 Avail. of ertv '0.828 0.395 0.943 0. 2 0.611 1.012 1.154
13 Proficiency 0.887 0 705 0.796 0.874 0.693 0.848 1.060
14 Efficiency 1.211 0 840 0.847 0.766 0.857 0.923 0.912
15 Customer £100. 0.898 0 698 1.063 0.878 0.815 0.984 0.994
16 Shop Facilities 1.026 0 841 0.631 0.990 0.708 0.786 0.992
17 Cust. Ccmpldint: -1.187 0 791 0.785 0.488 0.773 0.758 1.135
18 Warr. Fulfillment 1.050 0 803 0.482 0.670 0.670 0.667 0.702
19 Field Service 0.821 0 614 0.828 0.307 0.809 0.737 0.812
20 Personnel 0.782 0 559 0.785 0.521 0.669 0.737 0.702
Total 9.396 7 026 8.163 6.824 7.465 8.581 9.336
F.n.nsr;1
21 Price“ 0.698 0.639 0.927 0.744 0.676 1.272 0.898
22 Cr. ‘C 2W1.i 0.799 1.01; 0.680 0.605 0.450 0.809 0.791
23 Crtilt 157 0.743 0.969 0.675 0.510 0.433 0.621 0.866
24 Se: vb... 0.854 0.473 0.394 0.510 0.414 0.875 0.799
25 Trade-in 7611:; 1.026 1.055 0.730 0.939 0.800 1.048 0.676
26 Rental/160:0 0.773 1.118 0.907 1.037 0.850 0.975 0.971
27 Mfgr. Surrort 3.958 1.204 0.828 0.957 0. 25 0.975 0.970
8 Oper. 2171121 0.634 0.879 0.675 1.216 0.894 0. 75 1.130
29 Cost Control 0.890 0.836 0.847 0.848 0.499 0.891 0.799
30 Billing 0.734 1.123 0.361 0.000 0.402 0.533 0.520
Total 8.109 9.322 7.024 7.366 6.143 8.874 8.570
Personal Selling
31 Product Know. 0.735 0.778 0 980 0 893 0 813 0 989 1.172
32 "People” Know. 0.751 0.629 0.874 0 887 0 518 0 764 1.338
33 Strategy Form. 0.927 0.795 1 001 1 045 0 828 0 582 1.027
34 Tactical Adjust. 0.662 0.790 0.927 O 670 0.886 0.780 1.213
35 Comm. Abi1ity 0.706 0.763 0 891 0 725 0 609 0.667 1.100
36 Source of Info. 0.821 0.790 0 929 0 936 0 713 0.762 1.051
37 Market Know. 0.793 0.752 0.773 0 921 0 773 0.853 1.055
38 Reputation 1.146 0.537 0 797 0 887 O 785 1.253 1.331
3 Exp. 1 Training 1.085 0.7 2 1 009 0 878 0 718 0.831 1.005
40 Planning 0.880 0.734 09.51 0 819 0.819 0 762 0.970
Total 8.506 7.340 9 132 8 661 7 462 8 543 11 353

TABLE III—2 (continued)

208

 

 

 

Combinations
Item ‘
A .B C D E F G

Promotion
41 Sales Aids 0.680 0.669 0.551 0.788 0.502 0.711 0.866
42 Sales Prom. 0.706 0.785 0.846 1.004 0.765 0.833 0.759
43 Mfgr's Advert. 0.983 0.933 0.951 1.094 0.766 1.155 1.060
44 Distrib. Advert. 0.797 0.793 0.782 _0.809 0.800 0.989 0.857
45 Direct Mail 0.738 0.689 0.606 0.832 0.589 0.816 0.799
46 Visual Aids 0.788 0.658 0.680 0.819 0.748 0.762 0.654
47 Customer Referrals 0.983 0.493 ‘1.063 0.909 0.826 0.970 0.889
48 Publicity 0.885 0.846 0.793 0.653 0.895 0.833 0.912
49 Pers. Contacts 1.066 1.014 1.012 0.862 1.029 0.896 0.924
50 Demo. Profic. 1.009_ 0.840 1.082 0.965 , 0.937 1.054 ' 0.759
Total 8.635 7.720 8.366 8.735 7.857 9.019 8.479

Personnel
51 Exec. Leadership 0.676 0.596 1.063 1.259 0.765 0.650 0.997
52 Sales Superv. '0.689 0.727 1.044 1.126 0.980 0.745 0.934
53 Service Superv. 0.680 0.596 0.743 1.076 0.875 0.931 0.753
54 Employee Morale 1.009 0.706 0.988 1.004 0.746 0.558 0.878
55 Tech. Assistance 0.964 0.699 0.863 0.752 0.676 0.678 0.978
56 Industry Rels. 0.692 0.980 0.907 8.852 0.691 0.448 0.943
57 Mfgr's Reps. -0.887 1.067 1.041 0.936 0.700 0.891 1.290
58 Interper. Skills 0.517 0.706 0.652 0.510 0.625 0.524 0.624
59 Teamwork 0.927 0.806 0.974 0.852 0.698 0.657 0.789
60 Experience 0.888 0.616 0.833 0.999 0.785 0.711 1.106
Total 7.929 7.499 9.108 9.366 7.541 6.793 9.292
7 Product 7.762 6.322 7.720 9.540 7.796 9.293 10.104
Service 9.396 7.026 8.163 6.824 7.465 8.581 9.336
Financial 8.109 9.322 7.024 7.366 6.143 8.874 8.570
Pers. Selling 8.506 7.340 9.132 8.661 7.462 8.543 11.353
Promotion 8.635 7.720 8.366 8.735 7.857 9.019 8.479
Personnel 7.929 7.499 9.108 9.366 7.541 6.793 9.292
Composite Total 50.337 45.229 49.513 50.492 44.264 51 103 57.134

 

 

APPENDIX IV

MICROSCOPIC ANALYSIS TABLES

209

210

TABLE IV-1.--Rank correlation of competitive unit market
shares and element scores (product and service).

 

 

Unit Product Service Market Share
Code Bank Rank Rank
01 8.0 13.5 8.5
El 19.0 11.0 14.5
B2 11.0 2.0 4.0
F2 21.5 18.0 19.5
A3 17.0 9.0 8.5
B3 7.0 5.0 6.5
D3 25.0 7.0 18.0
E3 14.5 12.0 5.0
G3 16.0 24.0 19.5
A4 20.0 17.0 16.0
B4 1.0 3.0 6.5
E4 14.5 20.0 10.5
D5 23.0 19.0 17.0
G6 6.0 21.5 22.5
B7 4.0 ‘6.0 1.0
G7 24.0 25.0 22.5
B8 3.0 1.0 2.0
C8 12.0 8.0 10.5
E8 5.0 13.5 13.0
F8 9.5 16.0 24.0
A9 18.0 23.0 21.0
B9 2.0 4.0 3.0
C9 9.5 10.0 12.0
E9 13.0 15.0 14.5
F9 21.5 21.5 25.0

 

Spearman Rank Correlation Coefficients:
.619; Service .819.

Product

211

TABLE IV-2.--Rank correlation of competitive unit market
shares and element scores (financial and personal sell-
ing).

 

Unit Financial Personal Selling Market Share
Code Bank Rank Rank

 

Cl
E1
B2
F2
A3
B3
D3
E3
G3
A4
B4
E4
D5
G6
B7
G7
B8
08
E8
F8
A9
B9‘
C9
E9
F9

I'U

NFJF’

[UN

HHHHN
UHfl£=FWflKNOkflRMO~QmHflthLtFJGnflUJFHv~JUHU

H F’

0). o o o o o o o o o o

OOOOOU‘IOU‘IUTOOOOOU'IOOOU'IOOUTOOO

FJH

Mm
mmxmzmmmemNmmzmmeN

HH H

U‘IUTOOOOOOOU'IOOUTOOU'IOOOO

iAFJH

NHHH m
o
o

m
HH
om

10.0
22.0

H r4

armour-i:wommi—JMQOONoxxomoooxoomL-zoo

l—'
OU'IOOOOOWOWOWOWWOUTOOU‘IWWOWU‘I

MPH NMHH m NHH HH

 

Spearman Rank Correlation Coefficients:
Financial .269; Personal Selling .765.

212

TABLE IV-3.--Rank correlation of competitive unit market
shares and element scores (promotion and personnel).

 

 

Unit Promotion Personnel Market Share
Code Rank Rank Rank
01 7.0 10.5 8.5
E1 16.0 7.0 15.5
B2 1.0 3.0 4.0
F2 21.5 22.0 19.5
A3 17.5 18.0 8.5
B3 5.5 5.0 6.5
D3 14.0 8.0 18.0
E3 15.0 9.0 5.0
03 17.5 18.0 19.5
A4 13.0 16.0 16.0
B4 4.0 1.0 6.5
E4 10.0 14.5 10.5
D5 24.5 24.5 17.0
G6 20.0 14.5 22.5
B7 5.5 6.0 1.0
G7 23.0 23.0 22.5
B8 3.0 4.0 2.0
C8 11.0 12.0 10.5
E8 8.0 13.0 13.0
F8 24.5 18.0 24.0
A9 19.0 20.5 21.0
B9 2.0 2.0 3.0
C9 12.0 24.5 12.0
E9 9.0 10.5 14.5
F9 21.5 20.5 25.0

 

Spearman Rank Correlation Coefficients:
Promotion .848; Personnel .727.

213

TABLE IV-4.-—Rank correlation of competitive unit market
shares and composite scores.

 

 

Unit Code Composite Rank Market Share Rank
01 8.0 8.5
El 12.0 14.5
B2 3.0 4.0
F2 21.0 19.5
A3 16.0 8.5
B3 5.0 6.5
D3 14.0 18.0
E3 13.0 5.0
G3 20.0 19.5
A4 18.0 16.0
B4 2.0 6.5
E4 11.0 10.5
D5 25.0 17.0
G6 19.0 22.5
B7 6.0 1.0
G7 24.0 22.5
B8 4.0 2.0
C8 f7.0 10.5
E8 9.0 13.0
F8 17.0 24.0
A9 22.0 21.0
B9 1.0 3.0
C9 15.0 12.0
E9 10.0 14.5
F9 23.0 25.0

 

Spearman Rank Correlation Coefficient:
Composite .847.

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214

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