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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: StockMan who wrote (16449)	2/3/1998 5:57:00 PM
From: John Biddle	Read Replies (1) \| Respond to of 97611

Using a channel to sell only a subset of your products is a waste of that channels resources. The goal is to maximize sales and profits overall, not in every channel. While I agree that my two-brands approach does indeed waste resources in each channel, that is the tradeoff to maximize overall sales and profits. Compaq is doing so well in growing their PC business using the channel they don't really get any value there from DEC. They do not currently have the ability to appeal to direct purchasers, however, without simultaneously angering the very merchants that help them succeed selling indirectly. Seems to me that by using DEC as a direct vendor, they could sell PCs to a whole slew of people who like to buy direct. Since these people cannot effectively buy Compaq, any sales made this way would not cannabalize Compaq sales but would be additive.