Distributing product to where your customer are is key competing over others.

1. NATIONAL UNIVERSITY OF MANAGEMENT
BUSINESS TO BUSINESS MARKETING
Presented By:
Bo Bunrath
Phnom Penh, Cambodia
September, 2015
Alexander, Marketing for Dummies, 3rd Ed, 2009
MARKETING FOR DUMMIES
DISTRIBUTING YOUR PRODUCT WHERE YOUR CUSTOMERS
ARE

2. Content
1. Chapter objective and introduction;
2. Taking a strategic approach;
3. Tracking down ideal distributors;
4. Understand channel structure;
5. Reviewing retail strategies and tactics;
6. Stimulating sales at point of purchase.
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3. Chapter objective
• Building your business with strong distribution strategies;
• Finding distributors and retailers;
• Considering the best marketing channel structure and maximize retail
sales; and
• Thinking about point of purchase incentive and display.
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4. Introduction
• The company with the widest distribution are often most
successful because that distribution system gives them many
access to many potential customers.
• Often the easiest way to grow your sales and profits is to
improve your distribution systems.
• Adding retailers and increasing your accessibility on the Web
are two good ways to expand distribution.
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5. Taking a strategic approach
After you understand the different options, you can take a strategic
approach and select the strategy that’s right for your organization.
Following are some of the main distribution strategies and advice as to
when and why you may want to implement them:
• Selective distribution strategy: This strategy focuses on a small
number of outlets and often creates a sense of scarcity, allowing for
higher pricing and prestige branding;
• Exclusive distribution strategy: This strategy is the extreme version
of a selective strategy, in which you sell through one or a few
specialized distributors only.
• Intensive distribution strategy: This strategy (the opposite of
selective distribution) aims to flood the market by making your
product widely available in as many outlets as possible.
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6. Taking a strategic approach (cont.)
• 80/20 strategy: This strategy applies to distributors. You get 80 percent
or more of your sales from just 20 percent of your distributors.
Giving those hard-working top distributors plenty of attention,
excellent service, and excellent trade deals (see Chapter 15) is a
good strategy.
You also have to decide whether you want to develop parallel distribution
channels, also sometimes called competitive channels. Traditionally, a
manufacturer would never sell direct to consumers if it also sold through
wholesalers and retailers, so as to avoid competing with its own
distributors who may get mad and stop selling its products.
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7. Taking a strategic approach (cont.)
Here are more ways (tips) to get the most out of your distribution
program:
 Expand your distribution network: If you can add distributors or get
more out of the ones you have, you may be able to make your product
available to more people and increase your sales.
 Move more inventory, more quickly: Increasing the availability of
products in your distribution channel can also help boost sales and profits.
 Increase your visibility: Another way you can use distribution
strategies to boost sales is to increase the visibility of your product or
service within its current distribution channel by making sure it’s better
displayed or better communicated.
 Target larger or more desirable customers: Perhaps you can find a
way to shift your distribution slightly so as to give you access to more
lucrative customers.
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8. Tracking down ideal distributors
Distributors want items that are easy to sell because customers want to
buy them. It’s that simple. So the first step in getting customers on your
side is to make sure your product is appealing. After you’re confident you
have something worth selling, ask yourself which distributors can sell it
most successfully.
Here are some additional suggestions for locating your dream
distributors:
 Reach out to a trade association or trade show specializing in
distributors in your industry.
 Attend major conventions in your industry.
 Contact the American Wholesale Marketers Association.
 Consult any directory of associations for extensive listings.
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9. Understanding channel structure
As Figure 16-1 shows, a channel in which 4 producers and 4 customers do
business directly has 16 (4 × 4) possible transactions because each
producer has to make four separate transactions to get its product to all
four consumers.
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10. Understanding channel structure (cont.)
You lower the number of transactions greatly when you introduce an
intermediary (someone who handles the business transactions for you)
because now you only have to do simple addition rather than
multiplication. In the example shown in Figure 16-1, you only need 8 (4 +
4) transactions to connect all 4 customers with all 4 producers through
the intermediary.
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11. Reviewing retail strategies and tactics
The real winners in retail are the result of creative thinking and good site
selection — in that order. The two big-picture issues that determine
whether your store has low or high performance are a creative,
appealing store concept and a spot that has the right sort of traffic (and a
lot of it).
Looking for heavy traffic
Traffic is a flow of target customers near enough to the store for its
external displays and local advertising to draw them in. You want a great
deal of traffic, whether it’s foot traffic on a sidewalk, automobile traffic
on a road or highway, or virtual traffic at a Web site. Retailers need to
have people walking, driving, or surfing into their stores.
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12. Reviewing retail strategies. (cont.)
Developing merchandising strategies
General merchandise retailing
The general merchandise retailing strategy works because it brings
together a wide and deep assortment of products, thus allowing
customers to easily find what they want — regardless of what the
product may be.
Limited-line retailing
Emphasizes depth over variety. For example, a bakery can offer more and
better varieties of baked goods than a general food store because a
bakery sells only baked goods.
Scrambled merchandising
Consumers have preconceived notions about what product lines and
categories belong together. Looking for fresh produce in a grocery store
makes sense these days because dry goods and fresh produce have been
combined by so many retailers.
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13. Reviewing retail strategies. (cont.)
Create atmosphere
A store’s atmosphere is the image that it projects based on how you
decorate and design it. Atmosphere is an intangible — you can’t easily
measure or define it, but you can feel it.
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14. Reviewing retail strategies. (cont.)
Positioning your store on price
Retail stores generally have a distinct place in the range of possible price
and quality combinations. Some stores are obviously upscale boutiques,
specializing in the finest merchandise for the highest prices. Others are
middle class in their positioning, and still others offer the worst junk from
liquidators but sell it for so little that almost anybody can afford it.
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15. Stimulating sales at point of purchase
The point of purchase (POP) is the place where customer meets product.
It may be in the aisles of a store or even on a catalog page or computer
screen, but wherever this encounter takes place, the principles of POP
advertising apply. Table 16-1 shows you just how important point of
purchase is; it gives you an idea of how much (or how little) shoppers’
purchases are influenced by their predetermined plans.
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16. Stimulating sales at point of purchase (cont.)
Exciting displays add to the store’s atmosphere or entertainment value, and
store managers like that addition. Creativity drives the success of POP displays.
A good display should
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