In Part 1, THE EAGLE discussed the differences in distribution within the various segments and businesses that Eastman Kodak has recently purchased and looked at the first two strategic issues that it must address quickly. The final issues, Product Sectoring vs. Bundling/Convergence and Sales Force integration are addressed next.

3. Product Sectoring vs. Bundling/Convergence

One comfortable sales management formula that many manufacturers have sought to apply is that higher tech products, usually meaning equipment, or systems, are to be sold direct by dedicated and direct sales forces while the '"commodity" consumables are "fulfilled" by the dealers. Sales control in this arrangement is largely ceded to the manufacturer who cuts the "deals" with the customers and establishes the prices of the consumables in each transaction. This is done because the monthly purchase of consumable "commodities" is used to pay for the respective "high tech" equipment. The dealer is expected to move out of the way and let the manufacturer take "account control." Additionally, the dealer is expected to live with whatever price that the manufacturer sets for the consumable "bundle." The dealers are expected to purchase, finance, carry the inventory, deliver and service the supplies, but not to actually sell or to set any pricing under this "partnership." One dealer called this type of plan "channel slavery."