As I’ve mentioned in my last two entries, many people confuse marketing with communications, advertising and public relations. Any decent marketing strategy will include those promotions programs — and address product, price, and place decisions.
“Place” or “distribution” is often over-looked by small businesses. This marketing “P” deals with putting the product in the customer’s hands. Transactions, logistics, market coverage, channel partners, and service levels come into play. In looking at “place”, a company needs to consider its core competencies, role in the supply chain, and customer needs. With this in mind, the firm can consider what distribution channels to use, how many channel partners to involve, control of the channel, formality of channel partnerships, and costs involved with filling the sales pipeline.
In the rush to take a new product to market, many small businesses make intuitive distribution decisions. However, by analyzing the market, a firm can better position itself for success.
For example, a biomedical company asked me for help with their sales and marketing. Although it was several years old, the firm was struggling to penetrate the market and drive up sales. After reviewing the company’s core competencies, customer preferences, and competitive environment, I recommended the firm partner with medical product sales agents. By working with these sales agents, the company gained access to those agents’ established relationships with hospitals. The agents were able to offer the company’s products as part of a range of solutions and could promote the products while on sales calls for other products. This made it easier to capture the minds of busy hospital staff, who were previously resistant to cold calls from the biomedical firm. Today, the biomedical company markets almost all of its products through channel partners. And, although it gives sales agents a 30 to 40 percent cut, the firm saves because has reduced costs associated with sales calls, travel, trade shows, direct mail, and promotions. More importantly, the firm makes more sales than it could before, which makes investors happy.
Whether your company is well established or just starting out, be sure to include distribution in your analysis and planning.
(c) 2004 by Andrea Coutu. Vancouver Marketing Consultant. All rights reserved.