Step 1: Map the Value Chain
Leverage the value chain to create maximum value. Understand the various links in the chain, such as producers, distributors, wholesalers, agents, retailers, and customers. Here’s the UnleashNZ Value Chain Tool to map out the chain and identify potential complexities and problems.
Step 2: Incorporate Brand Building
Ensure that your brand is considered throughout the entire distribution chain. Sales and marketing should be an integral part of the distribution strategy. Avoid the common mistake of creating a marketing plan before establishing a distribution strategy. Integrate your brand across the chain to protect its uniqueness and prevent it from becoming a commodity sold solely based on price.
Step 3: Choose the Right Distribution Model
Evaluate the three basic distribution models: intensive, selective, and exclusive. Start small with a test-and-learn approach, gradually expanding based on successful outcomes. Maintain discipline and focus to achieve long-term success.
Step 4: Set Pricing Strategy
Reverse engineer margin along the distribution chain to determine affordable and profitable pricing. Analyse competitor pricing and aim to build a strong brand without relying heavily on price promotions, stand out from the competition and maintain brand value.
Step 5: Direct-to-Retail or Consumer Distribution
Consider disrupting traditional distribution strategies by exploring direct-to-consumer (DTC) distribution models. Implement effective marketing tactics to create awareness, generate leads, and convert sales. Be aware of the challenges of selling on aggregator retail sites and develop strategies to build and protect your brand.
Step 6: Finding a Great Distributor
Start by conducting online research, but don’t rely solely on it. Visit stores to evaluate the in-store experiences of different brands and talk to retail managers for recommendations. Identify distributors of category leaders and explore potential partnerships.
Step 7: Analyse Setbacks
Acknowledge that not everything will go according to plan. Analyse setbacks and assess whether they are due to factors such as timing, brand positioning, pricing, or promotional tactics. Maintain flexibility, keep an open mind, and make necessary adjustments.
Building a successful distribution strategy is an iterative process. Take the time to prepare, create a clear roadmap, and follow the necessary steps. Remember, starting somewhere is essential for making progress. Stay focused, be adaptable, and analyse outcomes to refine your strategy along the way.
