Distribution Channel Management Week 5

End in Mind of DCM Creative Marketing Activity no.1 -Easy to Access, Provide Call to Action- No matter how good any products or services deliver good value, No matter how well its been promoted, and No matter how desperate their consumers want it, “IT HAS TO BE IN POSITION THAT GIVES CONSUMERS EASY ACCESS TO IT”

What does it means to give consumers an easy access? Define your consumer/shopper buying location preferences. (questionnaires) Define any other products that is bought along with your product. That’s the products that is become your products’ adjacent category. (basket analysis, scan data analysis, member buying pattern analysis) Now, from that information you’ll have list of channel and places that give easy access to your consumers.

How to make your products available at channel choices? Conventional or Internet Channel. Do you need a distributor, wholesaler, reseller or agents to effectively deliver your products to the end retailer? Is there any indirect distribution needed to reach more end retailer? Choose your methods that the most effective for you from all distribution route possibilities available. (The cheapest = lowest cost/end retailer covered)

Positive Consideration of using Distributor as Distribution Intermediary Intermediaries usually provide a readymade network of end retailer that available to be supplied with our products, otherwise it will take us years and costs to establish such network Distributors are objective. They are not tied to one product or manufacturer. So they can arrange products portfolio that appeal to each of their customer (end retailers) Distributor can spread the costs of stocking and selling one product over all the items they carry, thereby distributing them at lower cost compare to “if” the manufacturer distribute them by themselves Distributor works is rewarded with discount off the selling price, therefore there is no capital investment needed from the manufacturer. The capital support needed for Distributor is in term of Credit Terms Distributor might have good knowledge of specific channel or local area that the manufacturer might not possess

Negative Consideration of using Distributor as Distribution Intermediary Distributor are not tied to one product or manufacturer. Their interest are mainly to serve their customer with the best prices and service, while maximizing their profit. They tend to make product portfolio offering to their customer base on profit calculation. If you are not giving competitive profit for Distributor, you can end up knowing your product is neglected. They may use one of their manufacturer’s product for their own promotional activity. They can offer price discount for your product just to be able to sell another product to the customers. Distributor tend to toughen their payment terms to their manufacturer, and their collection terms to their customers. Beware of securing your Payment Terms from Distributors

(2) Deciding the Channel Mix - Analyzing Channel options - After analyzing 6 factors that important for DCM, we can start to select mix of channels that suitable for the company’s products However, we still need to check channel choices viability using 5 c’s framework

(2) Deciding Channel Mix - Market Map - Your channel choices should be prepared in an understandable format containing diagrams and flow charts connecting all channel routes from manufacturer to shoppers See example…

After deciding the Channel Mix, we have to make sure that we also have specific criteria of which end retailer is located so that our product is accessible to our shopper as define in “Customer/Shopper Characteristic” - “ My product (e.g. hijab) should be available on Muslim Fashion Store (channel) that located on Bandung main street such as Buah Batu, Merdeka, and Martadinata (location). It is also sold thru my company FB pages (channel) and using FB ads so that it’s visible to muslim women in Bandung and Jakarta (location), and BBM dropshipper reseller (channel) in Bandung and Jakarta (location).” (3) Ensuring a Shopper Focus - Define End Retailer Location -

After deciding the Channel Mix, we have to make sure that we also have specific criteria of which end retailer is located so that our product is accessible to our shopper as define in “Customer/Shopper Characteristic” -Muslim Fashion Store (channel) that located on Bandung main street such as Buah Batu, Merdeka, and Martadinata (location) which have 500 m 2 store area (loc+), and parking lot for at least 20 cars and 50 motorcycles (loc+). -It is also sold thru my company FB pages (channel) and using FB ads so that it’s visible to muslim women in Bandung and Jakarta (location). -BBM dropshipper reseller (channel) in Bandung and Jakarta (location), who also a member of Pengajian Rutin in well known Mosque (loc+). (3) Ensuring a Shopper Focus - Define End Retailer Location (+) -

After deciding the Channel Mix, we have to make sure that we also have specific criteria of which end retailer is located so that our product is accessible to our shopper as define in “Customer/Shopper Characteristic” -Muslim Fashion Store (channel) that located on Bandung main street such as Buah Batu, Merdeka, and Martadinata (location) which have 500 m 2 store area (loc+), and parking lot for at least 20 cars and 50 motorcycles (loc+). -It is also sold thru my company FB pages (channel) and using FB ads so that it’s visible to muslim women in Bandung and Jakarta (location). My company will regularly upload new hijab tutorial video by weekly in the FB page (service). -BBM dropshipper reseller (channel) in Bandung and Jakarta (location), who also a member of Pengajian Rutin in well known Mosque (loc+). The reseller should be able to give hijab tutorial offline and online by using video that provide by our company (service). (3) Ensuring a Shopper Focus - Define End Retailer Service Requirement -

Your group paper about (2) Deciding The Channel Mix for your chosen product, and (3) Ensuring Shopper Focus, should be submitted …..March It accounts for 20 points of Nilai Tugas… The Tasks should contain 5 C’s framework analysis per channel and total channel maps It should also define the Shopper Focus Criteria's per channel selected If there’s something you need to ask about this task, feel free to find me in the lecturer room, or contact me to make appointment. Every group eligible for 1 consultation meeting with me. You decide whether you need to use this privilege or not. This is optional not an obligation.