Distribution with Mark Zimmerman - Entrepreneurship 101

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This lecture offers a strategic perspective of the distribution channel options available to start-ups. It emphasizes the development of the right criteria for choosing and managing channels.

Learn about the pros and cons of different channels such as inside sales, direct sales, distribution, e-commerce, franchises and integrators. Integrating sales across multiple channels is often a challenge for technology companies. A case study illustrates these points.

Part of Entrepreneurship 101

http://www.marsdd.com/events/details.html?uuid=cadf3216-9614-44b1-a73e-2b7dff582447

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Distribution with Mark Zimmerman - Entrepreneurship 101

  1. 1. E101: DistributionMark ZimmermanMaRSemail: mzimmerman@marsdd.com twitter: @markzim
  2. 2. ProductPricePlacePromotion 3The Four “P”s
  3. 3. The Four“P”sProductPriceDistributionPromotion 4
  4. 4. 53 Parts: Delivery, Sales, Service
  5. 5. It’s OK and often optimal to mix &match. 62 Flavours: Direct, Indirect
  6. 6. 7How to Choose?
  7. 7. 8Market type; 
Existing, Re-segmented, New
  8. 8. 9Market Stage
  9. 9. 10Complexity
  10. 10. 11Price
  11. 11. 12Customer Preference
  12. 12. “Default” Choices 13 Channel Type Direct Indirect Market Type New Re- Existing segmented Market Stage Early Midstage Mature ProductComplexity Complex Simple Price Expensive Cheap
  13. 13. OtherFactorsSize of marketDiversity/complexityof market“Proximity” of marketCompleteness ofofferingCost of channelSpeed to market 14
  14. 14. 15Not just a tactic...
  15. 15. 16 Amazon Dell...for some a Strategy Zappos Apple
  16. 16. 17
  17. 17. 18
  18. 18. 1970 - Invented 1976 - Patented 1986 - Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices. 19Background
  19. 19. 1970 - Invented 1976 - Patented 1986 - Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices. 1988 - Acknowledged dud, Nestle considers shutdown. 20Background
  20. 20. 1989 - Jean Paul Gaillard namedCommercial Director.“Pivots” 21Background
  21. 21. 22Separate machine & coffee.
Sell to consumers.
  22. 22. Made and serviced by 3rd parties. Sold through independent retail stores. Manufacturers handle delivery and stocking. Nespresso handles sales training. 23Machines
  23. 23. Sold online and over the phonedirect to members of theNespresso Club.Delivered direct to consumers in24 hours or less. 24Coffee
  24. 24. As market matured Nespressoadded their own brand machinesmade by an OEM.Added it’s own retail boutiques tofurther control the sales message.Created Nespresso Pro channel toserve the office market. 25Later
  25. 25. ~$3 billion in annual revenue 30% CAGR over 10 years 50 countries 20 billion capsules 12 million 26 machinesResults
  26. 26. Questions?Comments?Suggestions? 27Thanks!
Mark Zimmerman, mzimmerman@marsdd.com @markzim

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