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Issues in marketing local area network products
Issues in Marketing Local Area Network Products Seen by Manufacturers, Value-Added Resellers, and End-Users
R. Stephen Parker E.Reed Doke Angela Acree i’his study examines key issues confronting the LAN industry and determines the degree of importance of each issue. The issue categories identified are compatibility, product attributes, education and training, communication, ana’ user expectations. Results indicate that sentice is more important than price, that compatibility is important, and that schools are not adequately training individuals in LAN technology.
INTRODUCTION The local area network (LAN) industry may be categorized into three major types of organizations: (1) manufac-
Address correspondence to R. Stephen Parker, Department of Marketing, College of Business Administration, Southwest Missouri State University, 901 South National Avenue, Springfield, Missouri 65804.
Indusrrial Marketing Managemenr 23, 71-81 (1994) 0 Elsevier Science Inc., 1994 655 Avenue of the Americas, New York, NY 10010
turers, the producers of LAN products including hardware and system software; (2) value-added resellers (VARS), those who market LAN products and specific application software, consulting, and other services; and (3) end-users, the firms that acquire and utilize LAN products. Although each channel member has their individual priorities and concerns, a definable set of issues facing the LAN industry as a whole exists. The identification of these issues and the determination of their importance should provide a guide to assist managers and marketers in allocating resources to fulfill consumer requirements. The purpose of this research is to identify the key issues confronting the LAN industry and determine the degree of importance each issue has to manufacturers, VARS, and end-users. In addition, differences in perceived issue importance between each of the three groups is investigated.
71 0019~8501/94/$7.00
The LAN market will continue to experience rapid growth. VALUE-ADDED
RESELLERS
The concept of channels and channel membership is a well accepted principle of marketing thought. Role relationships exist between various members of a channel and each member relies upon the others to perform specific function(s). Theoretically, each channel is seen as a unique combination of middlemen whose management skills combine resources in various ways to increase the value of products or services [16]. This value chain is often described as a set of interrelated activities to create, support and deliver products [lo]. Manufacturers provide form utility while wholesalers and retailers contribute time, place, and possession utility. Management is generally thought to be concerned with the value added by logistics as the improvements made by the additions of time and place utility are reflected in the firms’ profit [17]. With each intermediary’s contribution value is thought to be added to the end product. Because of these factors, the roles of value added resellers have become of significant importance.
to grow [18]. Although LAN sales have risen from $2.4 billion in 1987 to $5.9 billion in 1991, not all areas of the industry are growing. The LAN market seems to be continuing to grow in the areas of PC LAN operating systems, internetwork routers, and products using unshielded twistedpair cabling with Ethernet and Token Ring networks. Internetworking, which includes LAN to LAN and LAN to mainframe connections will increase from 10% of LAN revenues in 1988 to a projected 75 % by 1993 [4]. Sales of items such as bridges, routers and gateways, continue to increase because of the variety of systems in use which do not speak the same language [7]. Growth opportunities also exist in the smaller firm market segment. In the 1980s medium-to-small businesses were not being targeted, yet 60% of networks being sold in the early 1990s will be to these firms [13]. Although some segments of the LAN industry, such as adapter boards and proprietary servers, are perhaps in the mature stage, the LAN industry overall is undoubtedly a growth industry [4].
LOCAL AREA NETWORKS
COMPETITIVE
Local area networks began to emerge in 1984 and have now evolved into a technology that is central to much information processing. The current LAN industry is characterized by rapid sales growth, increasing competition, the introduction of new-product features, and stable or slightly falling prices which suggests it is in the growth stage of its life cycle [4]. The number of LANs installed is expected to continue
Given that the LAN industry is in the growth stage of the product life cycle, one would expect to see an increase in the number of competitors entering the market and a decrease in the price of the product. These expectations are being fulfilled. To illustrate, Microsoft has entered the software market with a new version of LAN manager. Equally significant, Microsoft plans to support this new product with 300 new sales representatives, 600 resellers in the U.S. and 400 resellers abroad, and $15 million in new advertising [19]. Further, competition is coming from a variety of areas. For example, Banyan sells primarily to VARS but also sells to end-users, suggesting that VARS must compete with manufacturers, in addition to, other VARS [4]. Prices have decreased due to technological advances and increasing competition. Recently, the introduction of fiber optic cable was expected to lower prices by 25% [2]. Given the number of new products and the intensity of
R. STEPHEN PARKER is Professor of Marketing at Southwest Missouri State University in Springfield,
Missouri.
E. REED DOKE is Professor of Computer Information Systems at Southwest Missouri State University in Springfield, Missouri. ANGELA ACREE is a Systems Analyst at Management Software Inc., Springfield, Missouri.
72
ENVIRONMENT
competition, those who wish to compete successfully in the LAN industry must know the criteria used to evaluate products. RESEARCH
PROBLEM
Today’s successful business must focus on satisfying customer requirements. A major difficulty, of course, is accurately identifying these requirements. Once identified they can be prioritized. For example, if the primary variable impacting a LAN product purchase decision is price, the manufacturer or value-added reseller may focus on cost containment, resulting in lower prices. Alternatively, if service after the sale is paramount then effort should be dim&d toward increasing technical support services. The LAN industry faces the same problems confronting most businesses in identifying and satisfying customer needs, plus the added difficulty of dealing with a complex and rapidly changing technology. Many LAN customers lack computer expertise; therefore, attempts to differentiate products using technical characteristics may fail. When customers encounter the seemingly endless barrage of technical buzz words, they may simply retreat to the “How much is it going to cost me?” position. To illustrate, a 1988 survey of users asked “what connection scheme do you use?“, and 18 % said they didn’t know [8]. On the other hand users do seem to know what LAN products cost and what they expect from the products and suppliers of those products. A 1989 study reported that the primary concerns among LAN purchasers was price, performance, and technical support [31. While many products may be in the same price range and perform approximately the same functions, they can be differentiated by the service that the company provides [15]. For example, it has been noted that while competing organizations provide many of the same types of service, they do not provide the same quality of service. As a result of this difference in quality, service may provide one of the most important means of differentiation that a firm possesses [l]. Rather than considering service a cost, firms must recognize that providing quality information, technical back-up, handling returns, maintenance networks, and providing ancillary products can add significant value to the product [9]. Service, training and telephone support can play an important role in LAN sales growth, provided the vendor becomes involved with the customer, listens to what he needs and then delivers it [7]. This would appear to be a rather obvious strategy, yet many networking articles describe poor
service from minimally qualified people [ll] . Recently, a systems manager noted that the most common problems he encounters with VARs are getting them to return his phone calls and to provide the service his company needs [5]. Similarly, when VARs were asked to identify difficulties they too responded that most dissatisfaction revolved around a lack of support and service. VARs were most satisfied when the manufacturer was familiar with the market, provided good products at fair prices, and provided excellent support services [12]. In what has been called a “consumer expectation-management perception gap”, managers do not understand which features and services connote high quality to consumers. Managers must know what features meet consumer needs and what level of performance is necessary to deliver high quality service [14]. To assist in filling this gap, our purpose here is to identify the key issues facing the LAN industry and to determine their importance to each component: manufacturers, VARs, and end-users. In addition, differences in importance ratings between the groups are explored. RESEARCH
METHODOLOGY
Firms operating in today’s LAN industry are categorized into three groups: (1) Manufacturers producing LAN products; (2) value-added resellers (VARs) adding value through specific application software, consulting and other services; and (3) end-users (users), who purchase LAN systems and use them in their business operations. This research effort was undertaken to address two timdamental questions: 1. what are the more important marketing issues facing the LAN industry today? 2. Do the three categories of firms view these issues differently? Initially, an extensive review of the LAN-related literature was made to begin to identify issues. It is significant that literature specifically involving the marketing of LAN systems is scarce. Nonetheless, in addition to identifying a few issues, the literature suggested a taxonomy: LAN compatibility issues; LAN product attributes; education and training issues; interindustry communications; and user expectations. Next, interviews were conducted with firms representing manufacturers, VARS, and users. The purpose of these interviews was to identify additional issues and to clarity those obtained from the literature. Although the majority
73
Service, training, and telephone support are important factors. of these interviews were by telephone, several face-to-face interviews were also completed. A prepared list of questions was used during these interviews. The questions were constructed to identify specific marketing issues related to the LAN industry. Detailed notes were made during the interviews to record interviewee responses. Following analysis of the interview data, a questionnaire was then constructed containing 37 specific statements about these issues. The statements were composed so the respondent could indicate their degree of agreement using a fivepoint Likert scale, where 1 = strongly disagree and 5 = strongly agree; 3 was used to indicate neither agreement nor disagreement. Survey packets consisting of a cover letter, the questionnaire and a return envelope were prepared and mailed to 400 firms. These firms were selected from manufacturer and value added reseller lists appearing in LAN magazine. Users were selected with the help of national user organizations. Overall, 96 firms responded to the mail questionnaire yielding a response rate of 24 percent. Responses by category are shown in Figure 1. Figures 2 and 3 illustrate firm size as indicated by total revenue and number of employees respectively. Although clearly all sizes of organizations are represented, a significant number of firms were large. For example, 34 % had revenues of $10-99 million, with 25% over $100 million.
RESULTS
AND
ANALYSIS
Results were analyzed to determine the amount of disagreement-agreement with each statement, both overall and by type of firm. Next x2 analysis was employed to detect significant differences in responses between respondent groups. As previously indicated, issue categories were (1) LAN Compatibility Issues, (2) LAN Product Attributes, (3) Education and Training Issues, (4) Interindustry Communications, and (5) User Expectations. Each of these will be individually discussed below. Compatibility
Issues
There were four compatibility cluded on the questionnaire:
issues identified and in-
1. Establishing industry-wide standards is important. 2. Hardware products from different manufacturers must be able to work together. 3. User software products from different vendors must be able to work together. 4. User software products should be compatible with various manufacturers’ hardware. Respondents were asked to indicate their disagreement-agreement using the five-point Likert scale. Table 1 shows the overall agreement, and the agreement for each respondent category.
$1 to $9 Million (33%)
MFR
(22%)
$1 Million (2%) $10 to $100 Million (34%)
USER (43%)
FIGURE 1.
74
Categories
of respondents
No Response (5%)
$100 Million (25%)
FIGURE 2.
Firm sizes: total revenue
25 _ 99 (23%)
TABLE 3 Overall Importance
No
FIGURE 3.
TABLE 1 Agreement
Issue
Attribute
Hardware
Software
Service Phone Assistance Training Easy to Install Price
4.59 4.04 3.88 3.67 3.69
4.27 4.14 3.91 3.78 3.57
lowing statements. Results are recapped for each respondent category in Table 2.
Issues
Manufacturer
VAR
User
Overall
p*
4.71 4.71 4.14
4.65 4.71 4.35
4.63 4.76 4.34
4.64 4.71 4.29
0.84 0.90 0.66
4.29
4.59
4.54
4.47
0.42
Industry standards important Hardware must work together Software must work together Software compatible with hardware *Significant
Sequence
Firm sizes: number of employees
with Product Compatibility
Compatability
Response (3%)
in Descending
at p < 0.05.
These results indicate product compatibility is very important to all three firm types. The high p values indicate there were no significant differences in the agreement ratings for each issue assigned by manufacturers, VARS, and Users. In other words, all three groups agreed with the compatibility statements. LAN Product Attributes The preliminary study identified 10 product attributes, 5 each for software and hardware, that impacted LAN purchase decisions: Price, Training, Service, Ease of Installation, and Telephone Support. Respondents were asked to indicate their agreement or disagreement with the fol-
TABLE 2 LAN Product Attribute
Importance
Ratings: Respondent
1. Price is an important factor in a purchase decision. 2. Training on the use of the product is an important factor in a purchase decision. 3. Service after the sale is an important factor in a purchase decision. 4. Ease of installation is an important factor in a purchase decision. 5. Technical telephone assistance is an important factor in a purchase decision. Table 3 lists the overall agreement with each statement arranged in descending sequence. Notice that price is the least important software product attribute, whereas easy to install is the least important hardware attribute. Notably, service, telephone assistance, and training are the leading attributes for both hardware and software LAN products. There were four significant differences in attribute importance ratings among the three categories of respondents as indicated in Table 4. Table 4 suggests users think ease of installation and price are more important than do manufacturers and VARS. VARS see hardware training as significantly more important and
Category
Manufacturer
VAR
P*
User
Attribute
Hdw
Sfw
Hdw
Sfw
Hdw
Sfw
Hdw
Sfw
Price Training Service Easy to Install Phone Assistance
3.57 3.62 4.38 3.76 4.05
3.52 3.86 4.24 3.95 4.19
3.53 4.12 4.68 3.12 4.03
3.35 4.03 4.24 3.41 4.21
3.98 3.76 4.63 4.12 4.02
3.76 3.78 4.42 3.98 4.07
0.09* 0.09* 0.44 o.OO* 0.94
0.23 0.39 0.60 0.01* 0.40
Hdw, hardware; Sfw, software. *Significant at p < 0.010.
75
TABLE 4 Differences
in Attribute
Attribute and Product
Ratings Among Respondent Manufacturer
VAR
User
3.76 3.51 3.62 3.95
3.12 3.53 4.12 3.41
4.12 3.98 3.76 3.98
Easy to Install-hardware Price- hardware Training-hardware Easy to Install-software
ease of software installation manufacturers and users. Education
TABLE 5 Agreement
Groups
as less important
than do
and Training Issues
Both the literature and interviews suggested concerns about the LAN-related education and training of personnel. The questionnaire contained the following statements and respondents were asked to indicate their level of agreement. 1. People who sell LAN systems have adequate training to do their job. 2. People who use LAN systems have adequate training to do their job. 3. Finding potential employees with LAN experience is easy. 4. Employment applicants should have LAN training or education. 5. Universities adequately prepare potential employees for working in a LAN environment. Trade schools adequately prepare potential em6. ployees for working in a LAN environment. 7. End-users should be aware of the latest LAN technology. 8. Manufacturers and VARS should understand the latest LAN technology. The disagreement-agreement ratings for each firm category plus overall agreement is shown in Table 5. In addition, significant differences in ratings between types of firms is indicated. These results indicate overall disagreement with the statements 3 (experienced employees are available), 5 (universities adequately train personnel), and 6 (trade schools adequately train personnel). In addition there is strong overall agreement for statement 8 (manufacturers and VARS should understand the technology). Also notable is the existence of significant differences in the ratings between respondent groups with statements 5 (universities adequately train personnel) and 7 (users should be aware of the latest LAN technology). For state-
76
with LAN Education
EducatioNTraining
Issue
Salesmen are adequately trained Users are adequately trained Experienced employers are available Applicants should have training Universities adequately train personnel Trade Schools adequately train personnel Users should be aware of technology ManufacturersNARS should understand technology *Significant
and Training
Manufacturer
Issues
VAR User Overall
p
2.71 3.71
2.76 2.58
2.78 2.81
2.75 2.70
0.93 0.44
2.14 3.29
1.97 3.12
2.05 3.00
2.07 3.11
0.57 0.47
2.19
1.62
2.29
2.04
O.OO*
2.15
1.94
2.34
2.18
0.13
3.29
3.27
2.71
3.05
0.03*
4.62
4.79
4.75
4.14
0.27
at p < 0.010
ment 5, VARS indicated significantly more disagreement than did manufacturers or users. In addition, users disagreed more with statement 7 than did the other two groups. Interindustry
Communications
The literature review and interviews suggested the following LAN interindustry communications issues were relevant: 1. Good communications exists between manufacturers and VARS. 2. Good communications exists between manufacturers and end-users. 3. Good communications exists between VARS and end-users. 4. Teamwork between manufacturers, V’S, and endusers is necessary. about products is best accom5. Communications plished by meetings. about products is best accom6. Communications plished by newsletters and bulletins. 7. Communications about products is best accomplished by education and training. 8. Communications about products is best accomplished by service and support. 9. Communications about products is best accomplished by sales people. 10. Communications about products is best accomplished by trade shows. 11. Communications about products is best accomplished by direct mail.
Price is the least important factor. 12. Communications about products is best accomplished by print advertising. The amount of disagreement-agreement is shown by category of respondent and overall in Table 6. Direct mail and print advertising are not seen as important, while education and training appears to be an important communication technique. Note that VARs agree good communications exists between VARS and users yet users fail to agree. (This difference is significant at p < 0.001.) Also, education and training were seen as significantly more effective by VARS than by users. User Expectations There were three user expectation issues generated by the literature and interviews and included on the questionnaire:
1. End-users have reasonable expectations about LAN systems. 2. End-users have reasonable expectations about user software. 3. Shipping a LAN component 60-90 days after receipt of an order is acceptable. The level of respondent agreement is shown in Table 7. Although there is some disagreement with all three statements, it is more pronounced for statement (3) Shipping a LAN component 60-90 days after receipt of an order is acceptable. Unfortunately, such shipping delays are common industry practice. Also, significant differences in agreement ratings for user expectations about LAN systems were identified. Manufacturers agree that user expectations are reasonable, whereas VARS and users indicate less agreement. CONCLUSIONS
TABLE 6 Agreement
with Interindustry
Communication
Issue
Good communications exists Manufacturers-VARS Good communications exists Manufacturers-Users Good communications exists VARS-Users Teamwork is necessary Communications best by meetings Communications best by newsletters/bulletins Communications best by education/training Communications best by service/support Communications best by sales people Communications best by trade shows Communications best by direct mail Communications best by print advertising *Significant
at p < 0.010.
Communications
Issues p
The results of this study identify a variety of issues that, if addressed, could improve the overall effectiveness of the LAN industry’s channel of distribution. Certain issues seem to be important to all channel members. For example, all four compatibility issues examined were rated very important (4.1-4.7). Although no significant differences were found between categories of organizations, it is clear, given the rating of over 4.0, that each of these issues are of importance to each member category in the channel. The compatibility issue should therefore, be given considerable attention by each member in the channel to assure compliance by all members. To insure that the compatibility issue is being adequately addressed, it would seem reasonable for channel members
VAR
User
Overall
3.05
3.30
3.10
3.18
0.70
2.67
2.15
2.30
2.36
0.12
3.33 4.38
3.68 4.32
2.95 4.25
3.31 4.30
o.OO* 0.78
2.80
3.27
3.38
3.21
0.21
3.90
3.65
3.58
3.69
0.29
4.00
4.35
3.89
4.11
0.08*
3.90
4.03
3.65
3.85
0.33
3.50
3.61
3.32
3.46
0.45
TABLE 7 Agreement
3.62
3.12
3.34
3.32
0.36
User Expectation
2.95
3.00
3.11
3.02
0.83
3.40
3.00
3.03
3.11
0.48
LAN systems User software 6f-90-day shipment
Manufacturer
AND RECOMMENDATIONS
*Significant
with User Expectation Issue
Issues
Manufacturer
VAR
User
Overall
p
2.91 2.95 1.71
2.44 2.74 1.68
2.43 2.68 1.54
2.55 2.80 1.65
0.10* 0.46 0.88
at p < 0.010.
77
to use either an interpretation strategy or a boundary strategy. In the interpretation strategy, frequent informal interaction is required to gain an appreciation for each member’s perspectives. In the boundary strategy, an employee who is familiar with the perspective of the other party will discuss the matter in question with his/her counterpart. In either situation a line of informal communication will allow each member within the channel to know what types of hardware and software the other members are presently using as well as what their future needs may be. As mentioned earlier, it is possible for members of a channel to be faced with a consumer expectation-management perception gap. This communication problem does seem to exist in the LAN channel. For example, VARs believe that good communication exists between themselves and users (3.68). However, users do not share the same feeling as they rated VAR to user communication at a level of 2.95. Clearly, a communication gap does exist, and this gap may serve as a source of conflict within the channel. When product attributes were examined several predictable differences were found between channel members. Users believe that the ease of installation and price are more important than do either manufacturers or VARS. VARS see hardware training as more important and ease of software installation as less important than do manufacturers and users. Again, having a clear understanding of the other members perception of these attributes would help reduce conflict within the channel. Perhaps a more important finding is that service, telephone assistance, and training are all highly regarded by all members of the channel. It is clear that these attributes must be of prime consideration in any marketing program, and a lack of emphasis in these areas will result in conflict and dissatisfaction. An area of interest that can not be directly addressed by any specific member of the LAN channel is the lack of experienced employees. Channel members report dissatisfaction with the training level of graduates from both university and trade schools. Although it is impossible for them to directly change the training or experience level of these individuals, it may be possible to indirectly influence the courses to which graduates are exposed. For example, if the types of training are perceived as being inadequate, discussions with deans or department heads are generally welcomed. Intern programs would also be a relatively easy way of providing the necessary experience to potential employees prior to graduation. The recognition of different perceptions in both needs
78
and uses of products in the LAN industry may be the first step toward a more effective channel system. A channel leader is in a position to help each member of the channel reach their own particular goals and objectives. This study has shown the importance each member places on a variety of issues. With this information, a channel member is in a position to formulate strategy that will be both problem solving and profitable.
REFERENCES 1. Berry, Leonad L., Parasuraman, A., and Zeithaml, Valarie A., The ServiceQuality Puzzle, Business Horizons 31, 35-43 (1988). 2. Buckler, Grant, Buyers Seeing the Light of Optical Fiber, PC Week 121 (April 17, 1989). 3. Buerger, David, LAN Speed Tests Are Relative and May Mean Nothing, Info World 16 (April 3, 1989). 4. Carr, Jim, Forecast Growth: The Lan Market Just Keeps Getting Bigger and Bigger, LAN Magazine 5, 48-58 (1990). 5. Can; Jim, Backtalk (1990).
Readers Rate Their VAR’s, LAN Magazine
5, 67-78
6. Carr, Jim, David Mahoney: Charting Banyan’s Course Through the NOS Quagmire, LAN Magazine 5, 28-36 (1990). I.
Carr, Jim, and Schnaidt, Patricia, Chuck Stegman: How Businessland Became Number One in the Lan 100, LAN Magazine 5, 26-32 (1990).
8. Derfler, Fred, Important Connections: Magazine 7, 94 (1988).
PC Magazine Readers Tell All, PC
9. Johnson, Gerry, Scholes, Kevan, and Sexty, Robert W., Exploring Sfrategic Management, Prentice-Hall, Scharborough, Ontario, 1984. 10. Kerin, Roger A., Mahajan, ViJay, and Varadarajan, P. Rajan, Confempomry Perspective on Srrutegic Market Planning, Allyn and Bacon, Needham Heights, Massachusetts, 1990. 11. Keefe, Patricia, LANs Lean on Third Parties, Cornpurer WrM45,52 23, 1987).
(March
12. LAN 100, Talking Heads: Some Var’s Aren’t Afraid to Speak Their Minds, L&V Magazine 5, 63-74 (1990). 13. L&on, Teny, Microsoft Marketing LAN Software, Elecfronic News 14 (August 6, 1990). 14. Parasuraman, A., Zeithaml, Valarie A., and Beny, Lenard L., A Conceptual Model of Service Quality and Its Implications for Future Research, Joumal of Marketing 49, 41-50 (1985). 15. Porter, Michael E., Competitive Strategy, The Free Press, New York, 1980. 16. Stern, Louis W., and El-Ansary, Adel I., Murkefing Channels, 3rd ed., Prentice-Hall, Englewood Cliffs, New Jersey, 1988. 17. Stock, James R., and Lambert, Douglas M., Sfrategic Logistic Management, 2nd ed., Richard D. Irwin, Homewood, Illinois, 1987. 18. Stromer, Richard, and McGovern, Laura Cooper, IBM Captures the Lion’s Share of the Expanding LAN Hardware Market, PC Week 118 (Feb. 13, 1989). 19. Zachary, Pascal, Microsoft Starts Effort to Catch Novell in Market for PC Networking Software, Wall Streer Journal B4 (July 27, 1990).
LOCAL
AREA NETWORK
SURVEY
Our organization is primarily (please check one): -
Manufacturer: One who makes LAN system products. (VAR) One who adds value to LANs through specific application software, consulting, Value Added Reseller: A single point of sale providing all aspects of the LAN system. and/or other services. End-user: One who uses LAN systems to assist in daily business operations.
Description: Lan system: User Software:
Includes both LAN hardware and operating system software. Includes common LAN applications such as E-Mail and custom
software.
Instructions: Please darken the circle that corresponds to your opinion of the statement. “5” indicates that you strongly agree, “1” indicates that you strongly disagree, “3” indicates that you neither agree nor disagree. Strongly disagree
Strongly agree
1.
Establishing industry-wide LAN Standards is important.
1 2
3
4
5
2.
Hardware products from different manufacturers must be able to work together.
1 2
3
4
5
3.
User software products from different vendors must be able to work together.
1 2
3
4
5
4.
User software products should be compatible with various manufacturers’ hardware.
1 2
3
4
5
5.
Price is an important factor in a LAN system purchase decision.
1 2
3
4
5
6.
Price is an important factor in an user software product purchase decision.
1 2
3
4
5
7.
Training on the use of the product is an important factor in a LAN system purchase decision.
1 2
3
4
5
8.
Training on the use of the product is an important factor in an user software product purchase decision.
1 2
3
4
5
9.
Service after the sale of the product is an important factor in a LAN system purchase decision.
1 2
3
4
5
10.
Service after the sale of the product is an important factor in an user software product purchase decision.
1 2
3
4
5
11.
Ease of installation is an important characteristic in a LAN system purchase decision.
1 2
3
4
5
12.
Ease of installation is an important characteristic in a user software product purchase decision.
1 2
3
4
5
13.
Technical phone assistance is an important factor in a LAN system purchase decision.
1 2
3
4
5
(OVER)
79
Strongly disagree
14.
Technical phone assistance is an important factor in a user software product purchase decision.
1 2
3
4
5
15.
People who sell LAN systems have adequate training to do their jobs.
1 2
3
4
5
16.
People who use LAN systems have adequate training to do their jobs.
1
2
3
4
5
17.
Finding potential employees with LAN experience is easy.
1 2
3
4
5
18.
Employment applicants should have LAN training or education.
1 2
3
4
5
19.
Universities adequately prepare potential employees for working in a LAN environment.
1 2
3
4
5
20.
Trade schools adequately prepare potential employees for working in a LAN environment.
1 2
3
4
5
21.
Teamwork between manufacturers, VARS and end-users is necessary.
1 2
3
4
5
22.
Shipping a LAN component 60-90 days after receipt of an order is acceptable.
1 2
3
4
5
23.
End-users have reasonable expectations about LAN systems
1 2
3
4
5
24.
End-users have reasonable expectations about user software.
1
2
3
4
5
25.
End-users should be aware of the latest LAN technology.
1 2
3
4
5
26.
Manufacturers and VARS should understand the latest LAN technology.
1 2
3
4
5
27.
Good communication exists between: manufacturers and value added resellers manufacturers and end-users value added resellers and end-users
1 2 1 2 1 2
3 3 3
4 4 4
5 5 5
1 1 1 1 1 1 1 1
3 3 3 3 3 3 3 3 3
4 4 4 4 4 4
5 5 5 5 5 5
28.
Communication about products is best accomplished by: meetings newsletters and bulletins education and training service and support sales people trade shows direct mail print advertising other: (please specify) (OVER)
80
Strongly agree
2 2 2 2 2 2 2 2 1 2
4
5
4 4
5 5
Your company’s gross sales or revenues: _ under $1 million _ over $100 million
_ $1 - $9 million _ not applicable
_ $10 - $99 million
Number of employees in your entire company: _ -
25 or less _ 26-99 not applicable
_
100-499
_ 500-999
_
1000 or more
Manufacturers only: We sell our products primarily to: _ end-users
_ value added resellers
Our major product lines are: -
LAN systems
_ user software
-
multiapplication users single application users
Value added resellers only: We sell our products primarily to:
In deciding what LAN products to purchase for resale we rely on the expertise of:
1 1 1 1
in-house technical staff manufacturer representatives customer requests other (please specify) End-users only: On our LAN, we use: - many different applications, please list:
Strongly disagree
2 2 2 2
Strongly agree
3 3 3 3
4 4 4 4
5 5 5 5
_ only one application
In deciding which LAN products to purchase, we rely on the expertise & consultants manufacturer sales people value added reseller sales people office managers in-house technical staff other (please specify)
Strongly disagree
1 1 1 1 1 1
2 2 2 2 2 2
Strongly agree
3 3 3 3 3 3
4 4 4 4 4 4
5 5 5 5 5 5
Please use this space to make any comments you feel appropriate:
THANK YOU
81
R. Stephen Parker E.Reed Doke Angela Acree i’his study examines key issues confronting the LAN industry and determines the degree of importance of each issue. The issue categories identified are compatibility, product attributes, education and training, communication, ana’ user expectations. Results indicate that sentice is more important than price, that compatibility is important, and that schools are not adequately training individuals in LAN technology.
INTRODUCTION The local area network (LAN) industry may be categorized into three major types of organizations: (1) manufac-
Address correspondence to R. Stephen Parker, Department of Marketing, College of Business Administration, Southwest Missouri State University, 901 South National Avenue, Springfield, Missouri 65804.
Indusrrial Marketing Managemenr 23, 71-81 (1994) 0 Elsevier Science Inc., 1994 655 Avenue of the Americas, New York, NY 10010
turers, the producers of LAN products including hardware and system software; (2) value-added resellers (VARS), those who market LAN products and specific application software, consulting, and other services; and (3) end-users, the firms that acquire and utilize LAN products. Although each channel member has their individual priorities and concerns, a definable set of issues facing the LAN industry as a whole exists. The identification of these issues and the determination of their importance should provide a guide to assist managers and marketers in allocating resources to fulfill consumer requirements. The purpose of this research is to identify the key issues confronting the LAN industry and determine the degree of importance each issue has to manufacturers, VARS, and end-users. In addition, differences in perceived issue importance between each of the three groups is investigated.
71 0019~8501/94/$7.00
The LAN market will continue to experience rapid growth. VALUE-ADDED
RESELLERS
The concept of channels and channel membership is a well accepted principle of marketing thought. Role relationships exist between various members of a channel and each member relies upon the others to perform specific function(s). Theoretically, each channel is seen as a unique combination of middlemen whose management skills combine resources in various ways to increase the value of products or services [16]. This value chain is often described as a set of interrelated activities to create, support and deliver products [lo]. Manufacturers provide form utility while wholesalers and retailers contribute time, place, and possession utility. Management is generally thought to be concerned with the value added by logistics as the improvements made by the additions of time and place utility are reflected in the firms’ profit [17]. With each intermediary’s contribution value is thought to be added to the end product. Because of these factors, the roles of value added resellers have become of significant importance.
to grow [18]. Although LAN sales have risen from $2.4 billion in 1987 to $5.9 billion in 1991, not all areas of the industry are growing. The LAN market seems to be continuing to grow in the areas of PC LAN operating systems, internetwork routers, and products using unshielded twistedpair cabling with Ethernet and Token Ring networks. Internetworking, which includes LAN to LAN and LAN to mainframe connections will increase from 10% of LAN revenues in 1988 to a projected 75 % by 1993 [4]. Sales of items such as bridges, routers and gateways, continue to increase because of the variety of systems in use which do not speak the same language [7]. Growth opportunities also exist in the smaller firm market segment. In the 1980s medium-to-small businesses were not being targeted, yet 60% of networks being sold in the early 1990s will be to these firms [13]. Although some segments of the LAN industry, such as adapter boards and proprietary servers, are perhaps in the mature stage, the LAN industry overall is undoubtedly a growth industry [4].
LOCAL AREA NETWORKS
COMPETITIVE
Local area networks began to emerge in 1984 and have now evolved into a technology that is central to much information processing. The current LAN industry is characterized by rapid sales growth, increasing competition, the introduction of new-product features, and stable or slightly falling prices which suggests it is in the growth stage of its life cycle [4]. The number of LANs installed is expected to continue
Given that the LAN industry is in the growth stage of the product life cycle, one would expect to see an increase in the number of competitors entering the market and a decrease in the price of the product. These expectations are being fulfilled. To illustrate, Microsoft has entered the software market with a new version of LAN manager. Equally significant, Microsoft plans to support this new product with 300 new sales representatives, 600 resellers in the U.S. and 400 resellers abroad, and $15 million in new advertising [19]. Further, competition is coming from a variety of areas. For example, Banyan sells primarily to VARS but also sells to end-users, suggesting that VARS must compete with manufacturers, in addition to, other VARS [4]. Prices have decreased due to technological advances and increasing competition. Recently, the introduction of fiber optic cable was expected to lower prices by 25% [2]. Given the number of new products and the intensity of
R. STEPHEN PARKER is Professor of Marketing at Southwest Missouri State University in Springfield,
Missouri.
E. REED DOKE is Professor of Computer Information Systems at Southwest Missouri State University in Springfield, Missouri. ANGELA ACREE is a Systems Analyst at Management Software Inc., Springfield, Missouri.
72
ENVIRONMENT
competition, those who wish to compete successfully in the LAN industry must know the criteria used to evaluate products. RESEARCH
PROBLEM
Today’s successful business must focus on satisfying customer requirements. A major difficulty, of course, is accurately identifying these requirements. Once identified they can be prioritized. For example, if the primary variable impacting a LAN product purchase decision is price, the manufacturer or value-added reseller may focus on cost containment, resulting in lower prices. Alternatively, if service after the sale is paramount then effort should be dim&d toward increasing technical support services. The LAN industry faces the same problems confronting most businesses in identifying and satisfying customer needs, plus the added difficulty of dealing with a complex and rapidly changing technology. Many LAN customers lack computer expertise; therefore, attempts to differentiate products using technical characteristics may fail. When customers encounter the seemingly endless barrage of technical buzz words, they may simply retreat to the “How much is it going to cost me?” position. To illustrate, a 1988 survey of users asked “what connection scheme do you use?“, and 18 % said they didn’t know [8]. On the other hand users do seem to know what LAN products cost and what they expect from the products and suppliers of those products. A 1989 study reported that the primary concerns among LAN purchasers was price, performance, and technical support [31. While many products may be in the same price range and perform approximately the same functions, they can be differentiated by the service that the company provides [15]. For example, it has been noted that while competing organizations provide many of the same types of service, they do not provide the same quality of service. As a result of this difference in quality, service may provide one of the most important means of differentiation that a firm possesses [l]. Rather than considering service a cost, firms must recognize that providing quality information, technical back-up, handling returns, maintenance networks, and providing ancillary products can add significant value to the product [9]. Service, training and telephone support can play an important role in LAN sales growth, provided the vendor becomes involved with the customer, listens to what he needs and then delivers it [7]. This would appear to be a rather obvious strategy, yet many networking articles describe poor
service from minimally qualified people [ll] . Recently, a systems manager noted that the most common problems he encounters with VARs are getting them to return his phone calls and to provide the service his company needs [5]. Similarly, when VARs were asked to identify difficulties they too responded that most dissatisfaction revolved around a lack of support and service. VARs were most satisfied when the manufacturer was familiar with the market, provided good products at fair prices, and provided excellent support services [12]. In what has been called a “consumer expectation-management perception gap”, managers do not understand which features and services connote high quality to consumers. Managers must know what features meet consumer needs and what level of performance is necessary to deliver high quality service [14]. To assist in filling this gap, our purpose here is to identify the key issues facing the LAN industry and to determine their importance to each component: manufacturers, VARs, and end-users. In addition, differences in importance ratings between the groups are explored. RESEARCH
METHODOLOGY
Firms operating in today’s LAN industry are categorized into three groups: (1) Manufacturers producing LAN products; (2) value-added resellers (VARs) adding value through specific application software, consulting and other services; and (3) end-users (users), who purchase LAN systems and use them in their business operations. This research effort was undertaken to address two timdamental questions: 1. what are the more important marketing issues facing the LAN industry today? 2. Do the three categories of firms view these issues differently? Initially, an extensive review of the LAN-related literature was made to begin to identify issues. It is significant that literature specifically involving the marketing of LAN systems is scarce. Nonetheless, in addition to identifying a few issues, the literature suggested a taxonomy: LAN compatibility issues; LAN product attributes; education and training issues; interindustry communications; and user expectations. Next, interviews were conducted with firms representing manufacturers, VARS, and users. The purpose of these interviews was to identify additional issues and to clarity those obtained from the literature. Although the majority
73
Service, training, and telephone support are important factors. of these interviews were by telephone, several face-to-face interviews were also completed. A prepared list of questions was used during these interviews. The questions were constructed to identify specific marketing issues related to the LAN industry. Detailed notes were made during the interviews to record interviewee responses. Following analysis of the interview data, a questionnaire was then constructed containing 37 specific statements about these issues. The statements were composed so the respondent could indicate their degree of agreement using a fivepoint Likert scale, where 1 = strongly disagree and 5 = strongly agree; 3 was used to indicate neither agreement nor disagreement. Survey packets consisting of a cover letter, the questionnaire and a return envelope were prepared and mailed to 400 firms. These firms were selected from manufacturer and value added reseller lists appearing in LAN magazine. Users were selected with the help of national user organizations. Overall, 96 firms responded to the mail questionnaire yielding a response rate of 24 percent. Responses by category are shown in Figure 1. Figures 2 and 3 illustrate firm size as indicated by total revenue and number of employees respectively. Although clearly all sizes of organizations are represented, a significant number of firms were large. For example, 34 % had revenues of $10-99 million, with 25% over $100 million.
RESULTS
AND
ANALYSIS
Results were analyzed to determine the amount of disagreement-agreement with each statement, both overall and by type of firm. Next x2 analysis was employed to detect significant differences in responses between respondent groups. As previously indicated, issue categories were (1) LAN Compatibility Issues, (2) LAN Product Attributes, (3) Education and Training Issues, (4) Interindustry Communications, and (5) User Expectations. Each of these will be individually discussed below. Compatibility
Issues
There were four compatibility cluded on the questionnaire:
issues identified and in-
1. Establishing industry-wide standards is important. 2. Hardware products from different manufacturers must be able to work together. 3. User software products from different vendors must be able to work together. 4. User software products should be compatible with various manufacturers’ hardware. Respondents were asked to indicate their disagreement-agreement using the five-point Likert scale. Table 1 shows the overall agreement, and the agreement for each respondent category.
$1 to $9 Million (33%)
MFR
(22%)
$1 Million (2%) $10 to $100 Million (34%)
USER (43%)
FIGURE 1.
74
Categories
of respondents
No Response (5%)
$100 Million (25%)
FIGURE 2.
Firm sizes: total revenue
25 _ 99 (23%)
TABLE 3 Overall Importance
No
FIGURE 3.
TABLE 1 Agreement
Issue
Attribute
Hardware
Software
Service Phone Assistance Training Easy to Install Price
4.59 4.04 3.88 3.67 3.69
4.27 4.14 3.91 3.78 3.57
lowing statements. Results are recapped for each respondent category in Table 2.
Issues
Manufacturer
VAR
User
Overall
p*
4.71 4.71 4.14
4.65 4.71 4.35
4.63 4.76 4.34
4.64 4.71 4.29
0.84 0.90 0.66
4.29
4.59
4.54
4.47
0.42
Industry standards important Hardware must work together Software must work together Software compatible with hardware *Significant
Sequence
Firm sizes: number of employees
with Product Compatibility
Compatability
Response (3%)
in Descending
at p < 0.05.
These results indicate product compatibility is very important to all three firm types. The high p values indicate there were no significant differences in the agreement ratings for each issue assigned by manufacturers, VARS, and Users. In other words, all three groups agreed with the compatibility statements. LAN Product Attributes The preliminary study identified 10 product attributes, 5 each for software and hardware, that impacted LAN purchase decisions: Price, Training, Service, Ease of Installation, and Telephone Support. Respondents were asked to indicate their agreement or disagreement with the fol-
TABLE 2 LAN Product Attribute
Importance
Ratings: Respondent
1. Price is an important factor in a purchase decision. 2. Training on the use of the product is an important factor in a purchase decision. 3. Service after the sale is an important factor in a purchase decision. 4. Ease of installation is an important factor in a purchase decision. 5. Technical telephone assistance is an important factor in a purchase decision. Table 3 lists the overall agreement with each statement arranged in descending sequence. Notice that price is the least important software product attribute, whereas easy to install is the least important hardware attribute. Notably, service, telephone assistance, and training are the leading attributes for both hardware and software LAN products. There were four significant differences in attribute importance ratings among the three categories of respondents as indicated in Table 4. Table 4 suggests users think ease of installation and price are more important than do manufacturers and VARS. VARS see hardware training as significantly more important and
Category
Manufacturer
VAR
P*
User
Attribute
Hdw
Sfw
Hdw
Sfw
Hdw
Sfw
Hdw
Sfw
Price Training Service Easy to Install Phone Assistance
3.57 3.62 4.38 3.76 4.05
3.52 3.86 4.24 3.95 4.19
3.53 4.12 4.68 3.12 4.03
3.35 4.03 4.24 3.41 4.21
3.98 3.76 4.63 4.12 4.02
3.76 3.78 4.42 3.98 4.07
0.09* 0.09* 0.44 o.OO* 0.94
0.23 0.39 0.60 0.01* 0.40
Hdw, hardware; Sfw, software. *Significant at p < 0.010.
75
TABLE 4 Differences
in Attribute
Attribute and Product
Ratings Among Respondent Manufacturer
VAR
User
3.76 3.51 3.62 3.95
3.12 3.53 4.12 3.41
4.12 3.98 3.76 3.98
Easy to Install-hardware Price- hardware Training-hardware Easy to Install-software
ease of software installation manufacturers and users. Education
TABLE 5 Agreement
Groups
as less important
than do
and Training Issues
Both the literature and interviews suggested concerns about the LAN-related education and training of personnel. The questionnaire contained the following statements and respondents were asked to indicate their level of agreement. 1. People who sell LAN systems have adequate training to do their job. 2. People who use LAN systems have adequate training to do their job. 3. Finding potential employees with LAN experience is easy. 4. Employment applicants should have LAN training or education. 5. Universities adequately prepare potential employees for working in a LAN environment. Trade schools adequately prepare potential em6. ployees for working in a LAN environment. 7. End-users should be aware of the latest LAN technology. 8. Manufacturers and VARS should understand the latest LAN technology. The disagreement-agreement ratings for each firm category plus overall agreement is shown in Table 5. In addition, significant differences in ratings between types of firms is indicated. These results indicate overall disagreement with the statements 3 (experienced employees are available), 5 (universities adequately train personnel), and 6 (trade schools adequately train personnel). In addition there is strong overall agreement for statement 8 (manufacturers and VARS should understand the technology). Also notable is the existence of significant differences in the ratings between respondent groups with statements 5 (universities adequately train personnel) and 7 (users should be aware of the latest LAN technology). For state-
76
with LAN Education
EducatioNTraining
Issue
Salesmen are adequately trained Users are adequately trained Experienced employers are available Applicants should have training Universities adequately train personnel Trade Schools adequately train personnel Users should be aware of technology ManufacturersNARS should understand technology *Significant
and Training
Manufacturer
Issues
VAR User Overall
p
2.71 3.71
2.76 2.58
2.78 2.81
2.75 2.70
0.93 0.44
2.14 3.29
1.97 3.12
2.05 3.00
2.07 3.11
0.57 0.47
2.19
1.62
2.29
2.04
O.OO*
2.15
1.94
2.34
2.18
0.13
3.29
3.27
2.71
3.05
0.03*
4.62
4.79
4.75
4.14
0.27
at p < 0.010
ment 5, VARS indicated significantly more disagreement than did manufacturers or users. In addition, users disagreed more with statement 7 than did the other two groups. Interindustry
Communications
The literature review and interviews suggested the following LAN interindustry communications issues were relevant: 1. Good communications exists between manufacturers and VARS. 2. Good communications exists between manufacturers and end-users. 3. Good communications exists between VARS and end-users. 4. Teamwork between manufacturers, V’S, and endusers is necessary. about products is best accom5. Communications plished by meetings. about products is best accom6. Communications plished by newsletters and bulletins. 7. Communications about products is best accomplished by education and training. 8. Communications about products is best accomplished by service and support. 9. Communications about products is best accomplished by sales people. 10. Communications about products is best accomplished by trade shows. 11. Communications about products is best accomplished by direct mail.
Price is the least important factor. 12. Communications about products is best accomplished by print advertising. The amount of disagreement-agreement is shown by category of respondent and overall in Table 6. Direct mail and print advertising are not seen as important, while education and training appears to be an important communication technique. Note that VARs agree good communications exists between VARS and users yet users fail to agree. (This difference is significant at p < 0.001.) Also, education and training were seen as significantly more effective by VARS than by users. User Expectations There were three user expectation issues generated by the literature and interviews and included on the questionnaire:
1. End-users have reasonable expectations about LAN systems. 2. End-users have reasonable expectations about user software. 3. Shipping a LAN component 60-90 days after receipt of an order is acceptable. The level of respondent agreement is shown in Table 7. Although there is some disagreement with all three statements, it is more pronounced for statement (3) Shipping a LAN component 60-90 days after receipt of an order is acceptable. Unfortunately, such shipping delays are common industry practice. Also, significant differences in agreement ratings for user expectations about LAN systems were identified. Manufacturers agree that user expectations are reasonable, whereas VARS and users indicate less agreement. CONCLUSIONS
TABLE 6 Agreement
with Interindustry
Communication
Issue
Good communications exists Manufacturers-VARS Good communications exists Manufacturers-Users Good communications exists VARS-Users Teamwork is necessary Communications best by meetings Communications best by newsletters/bulletins Communications best by education/training Communications best by service/support Communications best by sales people Communications best by trade shows Communications best by direct mail Communications best by print advertising *Significant
at p < 0.010.
Communications
Issues p
The results of this study identify a variety of issues that, if addressed, could improve the overall effectiveness of the LAN industry’s channel of distribution. Certain issues seem to be important to all channel members. For example, all four compatibility issues examined were rated very important (4.1-4.7). Although no significant differences were found between categories of organizations, it is clear, given the rating of over 4.0, that each of these issues are of importance to each member category in the channel. The compatibility issue should therefore, be given considerable attention by each member in the channel to assure compliance by all members. To insure that the compatibility issue is being adequately addressed, it would seem reasonable for channel members
VAR
User
Overall
3.05
3.30
3.10
3.18
0.70
2.67
2.15
2.30
2.36
0.12
3.33 4.38
3.68 4.32
2.95 4.25
3.31 4.30
o.OO* 0.78
2.80
3.27
3.38
3.21
0.21
3.90
3.65
3.58
3.69
0.29
4.00
4.35
3.89
4.11
0.08*
3.90
4.03
3.65
3.85
0.33
3.50
3.61
3.32
3.46
0.45
TABLE 7 Agreement
3.62
3.12
3.34
3.32
0.36
User Expectation
2.95
3.00
3.11
3.02
0.83
3.40
3.00
3.03
3.11
0.48
LAN systems User software 6f-90-day shipment
Manufacturer
AND RECOMMENDATIONS
*Significant
with User Expectation Issue
Issues
Manufacturer
VAR
User
Overall
p
2.91 2.95 1.71
2.44 2.74 1.68
2.43 2.68 1.54
2.55 2.80 1.65
0.10* 0.46 0.88
at p < 0.010.
77
to use either an interpretation strategy or a boundary strategy. In the interpretation strategy, frequent informal interaction is required to gain an appreciation for each member’s perspectives. In the boundary strategy, an employee who is familiar with the perspective of the other party will discuss the matter in question with his/her counterpart. In either situation a line of informal communication will allow each member within the channel to know what types of hardware and software the other members are presently using as well as what their future needs may be. As mentioned earlier, it is possible for members of a channel to be faced with a consumer expectation-management perception gap. This communication problem does seem to exist in the LAN channel. For example, VARs believe that good communication exists between themselves and users (3.68). However, users do not share the same feeling as they rated VAR to user communication at a level of 2.95. Clearly, a communication gap does exist, and this gap may serve as a source of conflict within the channel. When product attributes were examined several predictable differences were found between channel members. Users believe that the ease of installation and price are more important than do either manufacturers or VARS. VARS see hardware training as more important and ease of software installation as less important than do manufacturers and users. Again, having a clear understanding of the other members perception of these attributes would help reduce conflict within the channel. Perhaps a more important finding is that service, telephone assistance, and training are all highly regarded by all members of the channel. It is clear that these attributes must be of prime consideration in any marketing program, and a lack of emphasis in these areas will result in conflict and dissatisfaction. An area of interest that can not be directly addressed by any specific member of the LAN channel is the lack of experienced employees. Channel members report dissatisfaction with the training level of graduates from both university and trade schools. Although it is impossible for them to directly change the training or experience level of these individuals, it may be possible to indirectly influence the courses to which graduates are exposed. For example, if the types of training are perceived as being inadequate, discussions with deans or department heads are generally welcomed. Intern programs would also be a relatively easy way of providing the necessary experience to potential employees prior to graduation. The recognition of different perceptions in both needs
78
and uses of products in the LAN industry may be the first step toward a more effective channel system. A channel leader is in a position to help each member of the channel reach their own particular goals and objectives. This study has shown the importance each member places on a variety of issues. With this information, a channel member is in a position to formulate strategy that will be both problem solving and profitable.
REFERENCES 1. Berry, Leonad L., Parasuraman, A., and Zeithaml, Valarie A., The ServiceQuality Puzzle, Business Horizons 31, 35-43 (1988). 2. Buckler, Grant, Buyers Seeing the Light of Optical Fiber, PC Week 121 (April 17, 1989). 3. Buerger, David, LAN Speed Tests Are Relative and May Mean Nothing, Info World 16 (April 3, 1989). 4. Carr, Jim, Forecast Growth: The Lan Market Just Keeps Getting Bigger and Bigger, LAN Magazine 5, 48-58 (1990). 5. Can; Jim, Backtalk (1990).
Readers Rate Their VAR’s, LAN Magazine
5, 67-78
6. Carr, Jim, David Mahoney: Charting Banyan’s Course Through the NOS Quagmire, LAN Magazine 5, 28-36 (1990). I.
Carr, Jim, and Schnaidt, Patricia, Chuck Stegman: How Businessland Became Number One in the Lan 100, LAN Magazine 5, 26-32 (1990).
8. Derfler, Fred, Important Connections: Magazine 7, 94 (1988).
PC Magazine Readers Tell All, PC
9. Johnson, Gerry, Scholes, Kevan, and Sexty, Robert W., Exploring Sfrategic Management, Prentice-Hall, Scharborough, Ontario, 1984. 10. Kerin, Roger A., Mahajan, ViJay, and Varadarajan, P. Rajan, Confempomry Perspective on Srrutegic Market Planning, Allyn and Bacon, Needham Heights, Massachusetts, 1990. 11. Keefe, Patricia, LANs Lean on Third Parties, Cornpurer WrM45,52 23, 1987).
(March
12. LAN 100, Talking Heads: Some Var’s Aren’t Afraid to Speak Their Minds, L&V Magazine 5, 63-74 (1990). 13. L&on, Teny, Microsoft Marketing LAN Software, Elecfronic News 14 (August 6, 1990). 14. Parasuraman, A., Zeithaml, Valarie A., and Beny, Lenard L., A Conceptual Model of Service Quality and Its Implications for Future Research, Joumal of Marketing 49, 41-50 (1985). 15. Porter, Michael E., Competitive Strategy, The Free Press, New York, 1980. 16. Stern, Louis W., and El-Ansary, Adel I., Murkefing Channels, 3rd ed., Prentice-Hall, Englewood Cliffs, New Jersey, 1988. 17. Stock, James R., and Lambert, Douglas M., Sfrategic Logistic Management, 2nd ed., Richard D. Irwin, Homewood, Illinois, 1987. 18. Stromer, Richard, and McGovern, Laura Cooper, IBM Captures the Lion’s Share of the Expanding LAN Hardware Market, PC Week 118 (Feb. 13, 1989). 19. Zachary, Pascal, Microsoft Starts Effort to Catch Novell in Market for PC Networking Software, Wall Streer Journal B4 (July 27, 1990).
LOCAL
AREA NETWORK
SURVEY
Our organization is primarily (please check one): -
Manufacturer: One who makes LAN system products. (VAR) One who adds value to LANs through specific application software, consulting, Value Added Reseller: A single point of sale providing all aspects of the LAN system. and/or other services. End-user: One who uses LAN systems to assist in daily business operations.
Description: Lan system: User Software:
Includes both LAN hardware and operating system software. Includes common LAN applications such as E-Mail and custom
software.
Instructions: Please darken the circle that corresponds to your opinion of the statement. “5” indicates that you strongly agree, “1” indicates that you strongly disagree, “3” indicates that you neither agree nor disagree. Strongly disagree
Strongly agree
1.
Establishing industry-wide LAN Standards is important.
1 2
3
4
5
2.
Hardware products from different manufacturers must be able to work together.
1 2
3
4
5
3.
User software products from different vendors must be able to work together.
1 2
3
4
5
4.
User software products should be compatible with various manufacturers’ hardware.
1 2
3
4
5
5.
Price is an important factor in a LAN system purchase decision.
1 2
3
4
5
6.
Price is an important factor in an user software product purchase decision.
1 2
3
4
5
7.
Training on the use of the product is an important factor in a LAN system purchase decision.
1 2
3
4
5
8.
Training on the use of the product is an important factor in an user software product purchase decision.
1 2
3
4
5
9.
Service after the sale of the product is an important factor in a LAN system purchase decision.
1 2
3
4
5
10.
Service after the sale of the product is an important factor in an user software product purchase decision.
1 2
3
4
5
11.
Ease of installation is an important characteristic in a LAN system purchase decision.
1 2
3
4
5
12.
Ease of installation is an important characteristic in a user software product purchase decision.
1 2
3
4
5
13.
Technical phone assistance is an important factor in a LAN system purchase decision.
1 2
3
4
5
(OVER)
79
Strongly disagree
14.
Technical phone assistance is an important factor in a user software product purchase decision.
1 2
3
4
5
15.
People who sell LAN systems have adequate training to do their jobs.
1 2
3
4
5
16.
People who use LAN systems have adequate training to do their jobs.
1
2
3
4
5
17.
Finding potential employees with LAN experience is easy.
1 2
3
4
5
18.
Employment applicants should have LAN training or education.
1 2
3
4
5
19.
Universities adequately prepare potential employees for working in a LAN environment.
1 2
3
4
5
20.
Trade schools adequately prepare potential employees for working in a LAN environment.
1 2
3
4
5
21.
Teamwork between manufacturers, VARS and end-users is necessary.
1 2
3
4
5
22.
Shipping a LAN component 60-90 days after receipt of an order is acceptable.
1 2
3
4
5
23.
End-users have reasonable expectations about LAN systems
1 2
3
4
5
24.
End-users have reasonable expectations about user software.
1
2
3
4
5
25.
End-users should be aware of the latest LAN technology.
1 2
3
4
5
26.
Manufacturers and VARS should understand the latest LAN technology.
1 2
3
4
5
27.
Good communication exists between: manufacturers and value added resellers manufacturers and end-users value added resellers and end-users
1 2 1 2 1 2
3 3 3
4 4 4
5 5 5
1 1 1 1 1 1 1 1
3 3 3 3 3 3 3 3 3
4 4 4 4 4 4
5 5 5 5 5 5
28.
Communication about products is best accomplished by: meetings newsletters and bulletins education and training service and support sales people trade shows direct mail print advertising other: (please specify) (OVER)
80
Strongly agree
2 2 2 2 2 2 2 2 1 2
4
5
4 4
5 5
Your company’s gross sales or revenues: _ under $1 million _ over $100 million
_ $1 - $9 million _ not applicable
_ $10 - $99 million
Number of employees in your entire company: _ -
25 or less _ 26-99 not applicable
_
100-499
_ 500-999
_
1000 or more
Manufacturers only: We sell our products primarily to: _ end-users
_ value added resellers
Our major product lines are: -
LAN systems
_ user software
-
multiapplication users single application users
Value added resellers only: We sell our products primarily to:
In deciding what LAN products to purchase for resale we rely on the expertise of:
1 1 1 1
in-house technical staff manufacturer representatives customer requests other (please specify) End-users only: On our LAN, we use: - many different applications, please list:
Strongly disagree
2 2 2 2
Strongly agree
3 3 3 3
4 4 4 4
5 5 5 5
_ only one application
In deciding which LAN products to purchase, we rely on the expertise & consultants manufacturer sales people value added reseller sales people office managers in-house technical staff other (please specify)
Strongly disagree
1 1 1 1 1 1
2 2 2 2 2 2
Strongly agree
3 3 3 3 3 3
4 4 4 4 4 4
5 5 5 5 5 5
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