For product-focused companies, establishing the most appropriate distribution strategies is a major key to success, defined as maximizing sales and profits. Unfortunately, many of these companies often fail to establish or maintain the most effective distribution strategies. Problems that we have identified include:
- Unwillingness to establish different distribution channels for different products
- Fear of utilizing multiple channels, especially including direct or semi-direct sales, due to concerns about erosion of distributor loyalty or inter-channel cannibalization
- Failure to periodically re-visit and update distribution strategies
- Lack of creativity and resistance to change
To be fair, there can be sound reasons for these perceived weaknesses. More typically, however, they are due to failings such as simple inertia, lack of understanding of the ultimate customers and their preferences, or a failure to acknowledge the importance of a distribution strategy and invest sufficient resources in understanding it.
“Now” is absolutely NOT the time to blindly continue the status quo with your distribution strategies. The Internet is creating sea-changes in terms of traditional manufacturer-distributor relations. It has seen significant waves of disintermediation in multiple product lines, and can facilitate cost-effective broadening of distribution channels. Meanwhile, improvements in supply chain management technologies must also be factored into choice of distribution partners.
InfoTrends can help your company improve its distribution strategies by:
- Mapping your products to the end-user
- Determining customers’ channel preferences and comparing these preferences with actual availability
- Recommending new channels, and why
- Examining competitors’ strategies and comparing them and their effectiveness with
- Confidential interviews with your distribution partners to identify areas for improvement, as well as existing strengths to be encouraged
Contact InfoTrends to discuss how we can we help you better understand and improve your distribution strategies.
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