In the past ten to fifteen years, Cisco has changed its marketing channel strategy majorly. While in the past Cisco was only focused on the volume of their business, they reconfigured their strategy to focus in on the value of business. Previously business was transferred through Cisco’s partners and retailers, who worked with customers to make deals and fill orders. Under their newer value-based strategy, their VARs, or value-added channel resellers, work directly with customers to ensure they are receiving the best value products and latest technologies. These VARs were able to work with large accounts as well as small to mid size accounts by offering specializations and value in niche markets or specific regions. Using this method makes it impossible to structure the strategy based on volume, because it is unfeasible to rate resellers effectively based on volume of sales when the ...view middle of the document...
The channel strategy evolved in such a way as to be able to account for all types of customers at all levels. VARs gained points in their ratings for specializations, that way VARs were concentrated in various areas of the market and Cisco could deal with customers on all levels of the sales market. This change in strategy, in my opinion, has paved Cisco’s way for the future. By focusing their strategy on value, they are creating a strong relationship with their customers by providing them with solutions that may be unattainable elsewhere. They have figured out a strategy that may be operable in future areas of business as well, such as VoIP.
I would give Cisco a very good grade on how they managed the restructure of their marketing channels. They have not only reorganized in such a way that has allowed them to take control of a majority of small-to-medium sized businesses, but have also made it so that their more limited amount of resellers and channel members can be more profitable as well. Additionally, their value-focus brings customers and consumers the highest quality of products and solutions. Although the telecom and dot com crash made times difficult for Cisco, their restructure in marketing channels and the implementation of the VAR strategy brought sales back up and has made Cisco a high-stakes player once again.
VoIp products also generated demand for other Cisco products, creating a highly fueled sales chain. However, the VARs were not interested in taking on VoIP for Cisco because it would take over their other already profitable product lines. I believe that Cisco should distribute their product between both data VARs and voice VARs. Cisco already has a relationship with their data VARs, and these resellers also know how to handle networking equipment and customers which would be necessary for VoIP sales and developments. I think that Cisco should definitely utilize voice VARs, however maintain relationships with data VARs that are both willing and capable to take on the task of VoIP product lines.