Selecting a Distribution Strategy for Your Business (Part I)
Last week, Marka and the FEI tribe discussed how strategic discounting can lead to better profits. This week, their focus is on selecting a distribution strategy for FEI products. Remember, fire = print.
It was a muggy afternoon, typical of Olympus’ warm autumns. On Main St., just a two-minute chariot ride from FEI headquarters, stood Zoot. He wore a sandwich board and held a box of torches in his hand. The sandwich board read: “I GOT FIRE! WHO WANTS SOME?”
Lucy, Org, Marka and Numo encountered the FEI salesperson on their way to work. “What are you doing, Zoot?” Lucy asked.
“Direct sales can’t do it all,” Zoot explained. “We need another way to distribute our torches and other products. I thought standing on the street corner might work.”
“I think we can come up with better ideas than that,” Lucy said.
“Probably,” Zoot admitted. “I came up with it at 3 a.m. last night.”
“I agree with you, Zoot,” Org said. “Historically, fire’s been a direct sale. Prometheus and Custo went door-to-door giving fire to mankind. This worked fine for two generations. But as our company grows, so must our sales channels.”
“It’s no longer cost-feasible to send a salesperson to the door of every FEI customer,” Numo agreed.
“Before making distribution decisions, let’s start by simply determining where the types of people who need our products are most likely to look for them,” Lucy advised. “Two generations ago, Olympians may have expected a fire salesperson to arrive at their door every week. But today, many of our customers look for fire products in retail stores, on the Onet and elsewhere. Our distribution strategy must reflect these changes in consumer behavior.”
“Our goal is to come up with a distribution strategy that reaches the maximum number of customers interested in FEI products, for a reasonable price,” Lucy continued. “There are four main sales channels that we can use to accomplish this goal. Today, we’ll talk about the first one. Zoot, turn around please.”