Value-added resellers are most popular channel for LAN equipment procurement

Oct. 7, 2002
Oct. 7, 2002 - Study indicates that VARs are the preferred way to go.

A recent survey performed by In-Stat/MDR has found that value-added resellers are the most popular channel for local area network equipment procurement among surveyed large and small businesses alike.

The high-tech market research firm's survey of those with decision-making and/or purchasing authority for network equipment and services at their companies and
organizations revealed that, even though larger companies are more likely to buy directly from a manufacturer and smaller companies are more likely to buy through retail, value-added resellers (VARs) are definitely the preferred way to go. In-Stat/MDR reports that 56.4% of survey respondents indicate that they purchase their local area network (LAN) equipment through that channel.

When purchasing through VARs, "after-sale service and support" and "quality products" were the two most important criteria amongst survey respondents. Conversely, when purchasing through retail outlets, "low price" was overwhelmingly the selection criterion.

"These results simply reflect the nature of the types of products that are sold in each of the channels, and manufacturers need to assure themselves that their distribution strategy is aligned with their product strategy," says Sam Lucero, an analyst with In-Stat/MDR

In-Stat/MDR also found that:

* Trade magazines and word of mouth were both key means cited by panelists as the best way for equipment manufacturers and VARs to advertise to them. Additionally, for VARs, vendor recommendations were also very important.

* Many panel companies use both distributors as well as system integrators, when they select VARs; VAR recommendations were only "somewhat" important in the product selection process; and that VAR certification by vendors was, likewise, only "somewhat" important to panelists.

The report, "Channels For LAN Equipment; How They're Buying 'Stuff' In 2002," is the ninth installment of the LAN Research Panel and provides primary, end-user data on the use of channels for LAN equipment purchases by companies and organizations today.

The report includes information and analysis on the types of channels used to purchase LAN equipment, key criteria used to select channel partners for LAN equipment purchases, most effective means for manufacturers and VARs to advertise to potential customers, key benefits sought by potential customers through working with channel partners, as well as certain VAR-specific data.

In-Stat/MDR is based in Scottsdale, Ariz. For more information visit
www.instat.com.

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