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Managing distribution channels

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Managing distribution channels

  1. 1. Managing distribution channels Vasiliy Starostin Materials from www.marketingmo.com
  2. 2. 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       2   Распределение  Производство   Сырье,  материалы,   компоненты  
  3. 3. 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   3  
  4. 4. 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   4  
  5. 5. 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.   5  
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  7. 7. 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.   7  
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  9. 9. 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.   9  
  10. 10. 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.   10  
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