The determination of some factors influencing channel change in the agricultural machinery sector.

Abstract

This report reviews some of the literature on marketing channels, the relationships that exist within them and their management under various marketing strategies. The literature suggests that as distribution strategies tend towards exclusive dealing, that is, where dealers are given exclusive rights to distribute the manufacturer's products, the manufacturer can expect better customer service and a more aggressive selling effort. Two types of channels are used by Slattery (Ltd.), a South African manufacturer of maize harvesting machinery. These are agricultural c o operatives and tractor dealerships and this report examines these two types of channels with regard to the customer service and selling effort that they provide in the Western Transvaal. A survey of a sample of owners of the machinery and a survey of a sample of the intermediaries that.sell it provide results which suggest that in several aspects there is no significant difference between the two types of intermediary. Under the heading of "service aspects", there is a broad similarity between the financial terms offered customers, but some co-ops do have an advantage in that improved credit facilities are available at some branches. The high proportion of owners who pay for their purchases within the first season would suggest that credit facilities are not as important for tractor drawn combines as for other types of capital equipment, like tractors. No difference was found in the repair and maintenance facilities offered or the repairs and maintenance carried out. Dealers had a higher proportion of factory-trained staff — but the service staff of co-ops recieved a higher rating from.owners of the machinery than did the dealer staff. Co-ops had better parts availability, and parts were more competitively priced, but no differences were found in the sellers' willingness to make customer calls and in the instructions given during installation of new machinery. Under the heading of "selling effort" no differences were found between the two channel types with respect to display of machinery, advertising and availability of display materials - however these factors were considered to be of little consequence. No differences were found in tie willingness to carry stocks of new machines and to carry out demonstrations, although there was a suggestion that dealers were more active in this regard. The biggest difference to be