(Practical Solutions to Difficult Problems) Distribution Strategy - Jeremy Gray
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So you’ve sold a product or service. Congratulations! Sales are key to revenue and profit. However, you will only gain repeat customers if you effectively deliver a product and ensure that users can receive the item or service in the way they want. This is done by using a distribution strategy that aligns with your customer’s needs.
Distribution challenges may be different in an overseas market from your home country.
It is easy to make mistakes when entering new markets. Even major multinational companies can fall foul of language and cultural differences.
The name Coca-Cola in China was first rendered as Ke-kou-ke-la. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means "bite the wax tadpole"
When it comes to distribution strategy your objective should be to meet a simple criteria. To deliver the right product to the right place and the right time at the right price.
Getting your distribution strategy right is essential to customer retention. Your customers will not be happy if they cannot get the product they want, where they want it when they want it. Failing to meet these needs may result in your customer trying an alternative and possibly finding it fits their needs better.
You have an effective distribution strategy in your home country but in moving overseas you will need to develop an appropriate strategy for your new market.
An initial question you need to ask, is am I going to distribute nationally? Or just in targeted regional markets?
If you are planning a regional roll out, take the time to learn where your potential customers are. Are there regional industry clusters that make sense? You can find out most of the information you need with a few hours of internet research. So take the time to get it right, confirm your research results with local experts.
Do you go direct or indirect? Unless selling high ticket items, direct distribution is probably not appropriate.
The term middle man has negative connotations but your distributor is an indispensable middle man who should add value to you and your end customer.
If your products have a shelf life ensure your distributor or warehouse agent has a robust tracking system to monitor shelf life.
What is your saturation strategy? High such as chewing gum, Exclusive - such as the Apple AT&T past arrangement or Selective such as used by Gucci.
Consider market positioning. By restricting distribution you may be able to take your product from mass market to premium, thus commanding higher selling prices and higher profits.
Consider using social media influencers. Now applicable for B2B as well as B2C. Many influencers have built their reputation based on industry expertise, knowledgeable posts and solid strategies for attracting and retaining followers. These are professionals first rather than celebrities. Keep in mind that Gen X and early Gen Y are now old enough to be into middle management and senior positions within your customers and they seek out information very differently than baby boomers did.
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