DISTRIBUTE PRODUCTS,…THEN PROFITS !
BY JAGDEEP KAPOOR
In India which has over 3,700 towns and six lakh villages, distribution in marketing is of great significance. The widespread nature of India brings out its potential, but so does bring out its challenges. These challenges to marketers relate to making their goods and services available relevantly across the length and breadth of the country.
Many new companies in India, whether domestic or multinational have had to face the challenge of distribution. While they may have the best of products or services, with large advertising budgets, unless their products or services are readily available there is little scope of achieving sales targets.
To develop an effective distribution strategy it is important to define the objectives clearly first.
Many companies have different objectives and unless these are defined explicitly there are may be a mistake in developing a positive distribution strategy.
In the last few years, there have been various brands launched - some with a clear strategy , others with a hazy one. This is mainly due to the non-clarity of the objectives.
There are certain key elements in terms of defining distribution objectives, firstly the area of coverage within a time frame should be clearly stated, secondly the main marketing objective should tie in the distribution objectives. For example, is the aim to launch a new brand, to line extend an existing one, to rejuvenate a mature category or to launch a new concept ? Thirdly, it is important to define whether it would be prudent to test market or go national.
Arising out of various distribution objectives it would be important to design distribution strategies.
Distribution strategies could be varied. One could choose one’s own distribution network or one could hire an external distribution house, further channel strategies could be designed depending on product category and place.
To be able to assess whether the distribution strategy is achieving the objective, certain norms would have to be developed and measured regularly. The parameters to be judged would be width of distribution namely availability. Depth of distribution namely stock pressure, visibility and merchandising and other elements like frequency of coverage.
After having defined the objectives, developed strategies, created norms and formulated measurable parameters it is important to implement it effectively.
I have some specific recommendations to implement strategies for distribution effectively so that brands can be built , and sales growth, market share and profits can be achieved.
Firstly I would strongly recommend to marketers to give priority to the sales and distribution function, because in a country like India , even if you have the best advertising , a reasonable price and an excellent product, your marketing programme will fail and perish if your product is not available
My second recommendation is to have your own sales and distribution network rather than use the services of an external distribution house. This is because an external distribution house may never give full attention to your brand. A case in point is the removal of Rasna and Amul from the Voltas distribution network and the setting up of their networks.
The third recommendation is the usage of strict but relevant sales and distribution monitoring system
My fourth recommendation is the careful selection of the sales team and the distributors based on a pre-determined profile. As an illustration it must be pointed out that the large Lipton distribution network was not relevant for Tree-Top which had to be withdrawn because the big distributors neglected a small brand like Tree-Top.
Finally I would recommend regular training in the areas of distribution strategies and implementation of policies.
I must quickly point out here that many companies advertise and spend crores of rupees but do not have their product distributed fully and well. It is suicidal to advertise before achieving certain distribution levels. Hence it is important to note , to build successful brands you must concentrate on distribution as a major element of the marketing mix or the brand would perish.
Therefore, first distribute products…then profits !
The author is Brand Guru Jagdeep Kapoor, Managing Director of the successful Samsika Marketing Consultancy
Pvt. Ltd. Tel: 022 28597700/7701
Copyright © 2007 All rights reserved with Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants Pvt. Ltd.
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