I read an eye-opening article by Andrew R. Thomas, PhD Assistant Professor of International Business, University of Akron and the Editor-in-Chief, Journal of Transportation Security. He has outlined what is wrong with the theory of mass marketing.
For decades, business and management gurus have preached that manufacturers should focus on core competencies and innovate to remain competitive in a global market. Non-core functions such as sales and distribution should be outsourced.
That business model works for a while but in the long-term, it fails badly. Why? Because it is the mega-distributors that dictate terms and reduce the value of the manufacture’s innovations into commodity products. Dr. Thomas calls this “The Distribution Trap.”
He has co-authored a book by the same name with Timothy J. Wilkinson, PhD, Associate Professor of Marketing at Montana State University Billings. You can buy the book from Amazon and visit his site at www.distributiontrap.com.
I also found a fascinating video interview on Andrew’s blog that really drives home the point with a case study featuring Mr. Fred Whyte, President of STIHL Inc. The interview is split over four videos.
“The Distribution Trap” Interview with STIHL – Part 1
“The Distribution Trap” Interview with STIHL – Part 2
“The Distribution Trap” Interview with STIHL – Part 3
“The Distribution Trap” Interview with STIHL – Part 4
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