Strategic Marketing Plan 11: Distribution and Routes to Market
by Mikel Chertudi
posted on 04-07-2015
Once you have all the pieces in place, how will you get your product to the marketplace? Some very successful business models have emphasized just one way: e-commerce. Yes, I’m talking Amazon. Amazon has been a huge game changer, streamlining the online buying process and becoming the world’s largest e-retailer. Others following in their footsteps include Apple, Staples, Walmart, and a long list of big-box stores, service providers, and niche retailers.
Still, many products simply won’t have the edge they need through online sales alone. Customers often need to see, feel, touch, and become acquainted with a brand before engaging in an online transaction. Therefore, a distribution network needs to be a part of the plan. Even services such as phone companies have taken up that mantra, opening brick-and-mortar storefronts or contracting with established businesses to get in front of the customer.
What are the options? There are basically two: direct, and indirect routes to market. Your audience is a key factor in determining which is right for your company. If your customer is price-conscious, with that as your major market advantage, you’ll look for discount distributors with lots of muscle getting things in front of bargain shoppers’ eyes. Alibaba and Walmart are examples established in that niche. If your product is at the opposite end of the spectrum—in the Louis Vuitton, Tiffany, or Gucci ballpark— you will obviously be looking for a luxury goods group to show off your lines.
For Big Wood Ski, it is important to remember that their customer is the high net worth individual. Aligning with upscale clothing retailers that sell soft goods associated with skiing, FBO terminals where private jets frequently drop their wealthy passengers, niche publications that target high-net-worth individuals, or art events, such as the Sun Valley Gallery Walk, where patrons are likely to be receptive to the brand are good places to show up. Exclusive ski resorts and shops also offer the right mix of eyes on the target. Putting your product in anything but a luxurious setting immediately dims the luster for the high-end customer.
If you have a unique product or service that’s new to the marketplace, perhaps you’ll want to gain attention through your own products and sales team, selling directly to the consumer. Consider Tesla and their direct-to-consumer sales of automobiles. Different product, different approach. Be creative.
If you choose to sell through resellers, make sure you choose wisely. The image and brand of the reseller is as important as your own. Customers will judge your product by the company you keep. Repairing damage already done can be challenging, but big ships have been turned around by good strategy.
For our study company, Big Wood Ski, distribution will take a hybrid route, combining direct sales through the company and its website with sales via carefully selected resellers. Big Wood Ski’s products are beautiful and unique, so they should be offered by retailers with carefully curated product lines. Big Wood Ski products will stand head and shoulders above the rest. It’s important to present the products in an environment that expects only the best.
It might be tempting to grab some low-hanging fruit if a retailer comes to you with an offer. If a retailer doesn’t meet your criteria, however, it is unlikely that it will prove productive, perhaps even diminishing your brand or confusing the customer. Staying true to your mission, vision, and values, and maintaining your brand’s true identity, is the way to carve your niche in the marketplace. Settling for anything less just undermines all your hard work.
If you are going to sell indirectly, you must create a sales tool that speaks for itself with your product display. As we mentioned in the last post, Big Wood Ski will be doing just that. Its functional art skis, which deliver as much aesthetic joy as they deliver in high performance, will be placed in a standalone display highlighting the features of the ski. The experience will be true to the brand, and it will deliver a definite luxury message to each customer passing by.
What makes your product stand out? Whether it’s luxury, thrift, convenience, innovation, or necessity, make sure your distribution emphasizes your most attractive points to your customers, staying true-to-course for your brand image throughout the distribution process.
Next up: programs and tactics.