International distribution channel strategies for service products: Case study research on Internet of Things enabled innovative B2B services

Abstract

This master’s thesis research examines how manufacturing companies in the high-technology industries have crafted their distribution strategies, why the decisions have been made and how the channels are evolving. The main focus of this research is to study how innovative Internet of Things enabled (remote condition monitoring) service products are distributed. The research studies the topic by relating distribution literature to three different theoretical areas, namely, value in relationships, product-technology maturity and market diversity. These approaches were chosen because of their ability to explain dynamism, longitudinal development, and transitions within the channels.

The research is a multiple case study that utilizes interviews as a main source of data. The qualitative research pursues to produce knowledge about service product distribution channels. The researcher seeks to investigate which factors affect distribution of remote condition monitoring service products and to reveal contingencies. There were four cases studied as the researcher pursued case comparison and thus, to produce generalization.

The study results suggest that the strategies are either direct or dual distribution strategies at introduction phase and then they develop into more cooperative hybrid channels or continue with dual strategy. Value in relationships have effect on dual and hybrid distribution decisions as well as type, intensity and coverage of distribution, but also relates to standardization of distribution strategy. Service product-technology maturity affects channel development related aspects and which channels can be exploited. Market diversity explains utilizing multiple channels in distribution as well as adaptation of strategy. When more markets are penetrated, adaptation pressure increases.

When this kind of a service product is sold a lot of value has to be proposed and security related aspects must be addressed in the sales situation through direct interaction. Thus, proactive and competent sales people are important factors for success.