Prioritizing Distribution Options
In some cases, a small business can pursue distribution into several different channels. However, most small businesses must prioritize distribution channel and sales force options over several years of growth and evolving resources for the company. For example, food supplements and vitamins are sold through a multitude of channels, including:
- multi-level "network" organizations, with company and independent sales reps
- health food stores, with company reps and sales brokers
- department stores, with company reps and sales brokers
- drug stores, with company reps and sales brokers
- grocery stores, with company reps and sales brokers
- mass merchandise stores, with company reps and sales brokers
- club member warehouse stores, with company reps and sales brokers
- direct mail, with company personnel
- distributors, with company sales managers, brokers, distributor sales reps
- doctors' offices, with company sales managers, brokers, distributor sales reps
It is not always possible for a company, small or large, to take advantage of all possible channels that match the marketing strategy it wants to achieve. Financial considerations aside, it may be wise to prioritize the orderly development and attack each distribution channel in order of easiest entry and least competitive resistance, for example.
Other factors such as geographic proximity, ability and availability of management to control many different channels simultaneously, availability of experienced sales reps, marketing experience by channel, competitive strengths by channel, manufacturing capacities, and product life cycles by channel should be considered.
For small companies, key factors to prioritize your choice of channels include a shorter list:
- financial resources and risks ("How much money do we have to risk against our objectives and marketing programs?")
- competitors' strengths and market share ("Are they big enough and mean enough to hurt us, and what are their objectives?")
- management experience by channel ("What do we know about each channel's opportunities and threats?")
- product positioning to target buyers ("Will the strengths of our product uniqueness help sell it to interested buyers and can we communicate our uniqueness effectively?")
See the following case studies for examples of how business owners make distribution decisions:
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