Sales channels to reach your customers
Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.
If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.
If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.
Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.
Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?
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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.
Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.
The key terms of the supply relationship should be covered in a written contract. Key issues might include:
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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship
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Brand Building of Low involvement category – engine oil Brand
MOTUL Lubricants is on a brand-building drive. Motul? Brand building? For a 152-year-old company, MOTUL Lubricants is little known in this part of the world, though it came into India 11 years ago. There’s enough reason for this. The company makes an engine oil brand that is a very low involvement category. Moreover, it is a relatively less marketed brand compared to others in the genre like CRB Plus, GTX and Super TT from Castrol and Servo from Indian Oil. Lastly, it had to pull out of the Indian market for five years in 1997.For the uninitiated, MOTUL, France, claims to be one of the largest independent lubricants companies in the world and operates in more than 80 countries. The brand, which first entered India in 1994 (in a JV called MOTUL Mafatlal Lubricants), is now available in India through Atlantic Lubricants and Specialities (ALSL), which manufactures MOTUL’s products at its in-house plant in Silvassa. Motul’s JV with Mafatlal broke up eight years ago and it tied up with ALSL in 2002