Managing distribution channels

Vasiliy Starostin

Materials from www.marketingmo.com

Distribu(on,  also  known  as  placement,  is  one  of  the  classic  “4  Ps”  of  marke(ng  mix  Distribu(on  channels  play  one  of  the  key  role  in  your  en(re  marke(ng  strategy  —  they  help  you  expand  your  reach  to  penetrate  your  market.    *Цикл  товародвижения  по  всем  этапам  PLC      

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Распределение  Производство  Сырье,  материалы,  компоненты  

Evaluate  how  your  end-­‐users  need  to  buy  

Your  distribu(on  strategy  should  deliver  the  informa(on  and  service  your  prospects  need.  For  each  customer  segment,  consider:    

How  and  where  they  prefer  to  buy  

Whether  your  product  needs  to  be  

serviced  

Whether  your  product  needs  to  be  

customized  or  installed  

Whether  they  need  personalized  educa(on  and  

training  

Whether  they  need  addi(onal  products  or  services  to  be  used  along  with  yours  

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B2B  and  B2C  companies  can  sell  through  a  single  channel  or  through  mul(ple  channels  that  may  include:  

 

• Selling  through  your  own  e-­‐commerce  website.  

Direct/Internet  

• One  or  more  sales  teams  that  you  employ  directly.  You  may  use  mul(ple  teams  that  specialize  in  different  products  or  customer  segments.  

Direct/Sales  Team  

• Selling  through  your  own  catalog.  

Direct  Catalog  

• Retailers  sell  directly  to  end-­‐users  via  a  physical  store,  a  website  or  a  catalog.  

Retail  

• A  company  that  buys  products  in  bulk  from  many  manufacturers  and  then  resells  smaller  volumes  to  resellers  or  retailers.  

Wholesaler/Distributor  

• A  VAR  works  with  end-­‐users  to  provide  custom  solu(ons  that  may  include  mul(ple  products  and  services  from  different  manufacturers.  

Value-­‐Added  Reseller  

• A  consultant  develops  rela(onships  with  companies  and  provides  various  types  of  services;  they  may  recommend  a  manufacturer’s  product  or  simply  purchase  it  to  deliver  a  solu(on  to  their  client.  

Consultant  

• A  company  or  person  who  buys  inventory  from  either  a  manufacturer  or  a  distributor,  then  resells  it  to  an  end-­‐user.  

Dealer  

• You  can  outsource  your  sales  func(on  to  a  company  that  sells  different  manufacturers’  products  to  a  group  of  similar  customers  in  a  specific  territory.  

Sales  Agent  

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DIRECT  TO  END  USERS   SELL  THROUGH  A  DEALER  NETWORK  

SELL  THROUGH  A  VAR  (VALUE-­‐ADDED  RESELLER  

You  have  a  sales  team  that  sells  directly  to  Fortune  100  companies.    You  have  a  second  product  line  for  small  businesses.  Instead  of  using  your  sales  team,  you  sell  this  line  directly  to  end-­‐users  through  your  website  and  marke(ng  campaigns.    You  have  two  markets  and  two  distribu(on  channels.  

You  sell  a  product  through  a  geographical  network  of  dealers  who  sell  to  end-­‐users  in  their  areas.  The  dealers  may  service  the  product  as  well.    Your  dealers  are  essen(ally  your  customers,  and  you  have  a  strong  program  to  train  and  support  them  with  marke(ng  campaigns  and  materials.  

You  sell  a  product  to  a  company  who  bundles  it  with  services  or  other  products  and  resells  it.  That  company  is  called  a  Value  Added  Reseller  (VAR)  because  it  adds  value  to  your  product.    A  VAR  may  work  with  an  end-­‐user  to  determine  the  right  products  and  configura(ons,  and  then  implement  a  system  that  includes  your  product.  

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Ques(ons  to  consider  

1.  If  users  need  personalized  service,  you  can  u(lize  a  local  dealer  network  or  reseller  program  to  provide  that  service.  

2.  If  your  users  prefer  to  buy  online,  you  can  create  an  e-­‐commerce  website  and  fulfillment  system  and  sell  direct;  you  can  also  sell  to  another  online  retailer  or  distributor  that  can  offer  your  product  on  their  own  sites.  

3.  You  can  build  your  own  specialized  sales  team  to  prospect  and  close  deals  directly  with  customers.  

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Before  you  begin  

1.  Your  distribu(on  channels  should  support  your  posi(oning  and  brand  strategy.    – You  are  a  selling  value-­‐added  product  – So}ware  vendor  

2.  It’s  especially  important  to  think  about  distribu(on  when  you’re  going  a}er  a  new  customer  segment,  releasing  a  new  product,  or  looking  for  ways  to  aggressively  grow  your  business.  

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Minimize  pricing  conflicts    

Mul(ple  channels    •  Carefully  map  out  the  price  for  each  step  in  your  channel  and  include  a  fair  profit  for  each  type  of  partner.    

•  Then  compare  the  price  that  the  end-­‐user  will  pay;  if  a  customer  can  buy  from  one  channel  at  a  lower  price  than  from  another,  your  partners  will  righ�ully  have  concerns.    

•  Pricing  conflict  is  common,  and  it  can  jeopardize  your  en(re  strategy,  so  do  your  best  to  map  out  the  price  at  each  step  and  develop  the  best  solu(on  possible.  

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