NATIONAL UNIVERSITY OF MANAGEMENT

BUSINESS TO BUSINESS MARKETING

Presented By: Bo Bunrath

Phnom Penh, CambodiaSeptember, 2015

Alexander, Marketing for Dummies, 3rd Ed, 2009

MARKETING FOR DUMMIESDISTRIBUTING YOUR PRODUCT WHERE YOUR

CUSTOMERS ARE

Content1. 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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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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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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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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Taking a strategic approach (cont.)

• 80/20 strategy: This strategy applies to distributors. You get 80 percentor 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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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 getmore out of the ones you have, you may be able to make your productavailable 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 away to shift your distribution slightly so as to give you access to morelucrative customers.

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Tracking down ideal distributorsDistributors 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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Understanding channel structureAs Figure 16-1 shows, a channel in which 4 producers and 4 customers dobusiness 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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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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Reviewing retail strategies and tacticsThe real winners in retail are the result of creative thinking and good siteselection — 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 trafficTraffic 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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Reviewing retail strategies. (cont.)Developing merchandising strategies General merchandise retailingThe 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 retailingEmphasizes 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 merchandisingConsumers 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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Reviewing retail strategies. (cont.)Create atmosphereA 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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Reviewing retail strategies. (cont.)Positioning your store on priceRetail 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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Stimulating sales at point of purchaseThe 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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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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