Economic : possible sales figures and expected costs.
Posted: Wed Jan 22, 2025 8:11 am
Stages and criteria for choosing distribution channels
You can take a different approach and analyze all alternative distribution channels in marketing according to a set of three groups of factors:
Economic : possible sales figures and expected costs.
Control : delivery times of the order to the client, sales incentive system.
Adaptive : time to connect this channel to the general distribution system in the company, its level of flexibility, and ability to adapt to changes in the market.
This set of criteria in international employment database economic practice is designated by the abbreviation “3C” , since all three components begin with the letter “C” of the English alphabet: Cost , Control , Coverage .
But there is another, more advanced method for selecting distribution options – “6C” . It includes three additional assessment factors: Capital (all investments required to form a distribution channel), Character (Chain properties/specifics, compliance with the target market segment), Continuity (Financial stability of the counterparty, its intention to cooperate for many years).
The best channel is considered to be the one whose results across the entire range of these indicators are higher than those of the others.
Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow
Find out how
Communication strategies in the distribution channel
The well-coordinated joint work of intermediaries is the main factor in the effective implementation of the company's marketing strategy . There are two main long-term communication policies that can be used to achieve this (by the way, they are sometimes combined).
Pushing in
The essence of this strategy of vendor influence on the distribution channel is to promote its product to intermediaries. The manufacturer must convince them not only to buy its products, but also to create the necessary stock, display these products in good places in the sales areas and in every possible way stimulate visitors to buy. To do this, intermediaries are offered the most favorable conditions and the product is advertised in every possible way.
Ideally, build harmonious relationships with all dealers. In the push strategy, the main players are the sales representatives of the manufacturer.
Intermediaries are motivated by the growth of sales volumes and maintaining stocks at the proper level, the activation of sales staff and local promotional activities (advertising campaigns in stores, expansion of the area of sales outlets, independent promotion of goods), and an improvement in the quality of service.
Communication strategies in the distribution channel
This strategy comes to the rescue when a manufacturer needs to enter the market by establishing cooperation with distributors (who will provide him with access to a wide consumer). However, the better the intermediaries bargain, the more they lead the market, and manufacturers have to agree to their terms, since the choice is small (especially in niches where distribution is concentrated).
The push communication strategy puts dealers in the center of attention and gives them all the levers of influence, while the vendor actually becomes dependent on them and ceases to control sales in the distribution channel.
There is an alternative way: to use only your own chains. But in this case, you will have to bear all the costs, and the implementation of sales functions is quite labor-intensive.
Read also!
You can take a different approach and analyze all alternative distribution channels in marketing according to a set of three groups of factors:
Economic : possible sales figures and expected costs.
Control : delivery times of the order to the client, sales incentive system.
Adaptive : time to connect this channel to the general distribution system in the company, its level of flexibility, and ability to adapt to changes in the market.
This set of criteria in international employment database economic practice is designated by the abbreviation “3C” , since all three components begin with the letter “C” of the English alphabet: Cost , Control , Coverage .
But there is another, more advanced method for selecting distribution options – “6C” . It includes three additional assessment factors: Capital (all investments required to form a distribution channel), Character (Chain properties/specifics, compliance with the target market segment), Continuity (Financial stability of the counterparty, its intention to cooperate for many years).
The best channel is considered to be the one whose results across the entire range of these indicators are higher than those of the others.
Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow
Find out how
Communication strategies in the distribution channel
The well-coordinated joint work of intermediaries is the main factor in the effective implementation of the company's marketing strategy . There are two main long-term communication policies that can be used to achieve this (by the way, they are sometimes combined).
Pushing in
The essence of this strategy of vendor influence on the distribution channel is to promote its product to intermediaries. The manufacturer must convince them not only to buy its products, but also to create the necessary stock, display these products in good places in the sales areas and in every possible way stimulate visitors to buy. To do this, intermediaries are offered the most favorable conditions and the product is advertised in every possible way.
Ideally, build harmonious relationships with all dealers. In the push strategy, the main players are the sales representatives of the manufacturer.
Intermediaries are motivated by the growth of sales volumes and maintaining stocks at the proper level, the activation of sales staff and local promotional activities (advertising campaigns in stores, expansion of the area of sales outlets, independent promotion of goods), and an improvement in the quality of service.
Communication strategies in the distribution channel
This strategy comes to the rescue when a manufacturer needs to enter the market by establishing cooperation with distributors (who will provide him with access to a wide consumer). However, the better the intermediaries bargain, the more they lead the market, and manufacturers have to agree to their terms, since the choice is small (especially in niches where distribution is concentrated).
The push communication strategy puts dealers in the center of attention and gives them all the levers of influence, while the vendor actually becomes dependent on them and ceases to control sales in the distribution channel.
There is an alternative way: to use only your own chains. But in this case, you will have to bear all the costs, and the implementation of sales functions is quite labor-intensive.
Read also!