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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Types of Innovation
Home » Business Consulting » Types of Innovation
May 7, 2013 Frank Bullock Business Consulting, Business Ideas Tags: business consulting, business ideas, innovation, types of innovation
Because our website aims to help you get acquainted with basic concepts of business, thus enabling you to come up with successful business ideas or marketing strategies for an existing business, we thought of writing an article about the types of innovation that exist. That way, you will be familiar with yet another set of tools you can use to develop or innovate your business, or which you can use to create an entirely new market with its own set of consumers.
Thus, the types of innovation that you can come across and utilize in your strategies are: sustaining innovation and disruptive innovation.
Disruptive innovation Weve already discussed this type in another article and we presented it in detail, so you can go there for more comprehensive information. Nonetheless, for thoroughness sake, let us say that disruptive innovation is the type of innovation that disrupts existing markets by creating an entirely new one; it can refer to a technology, a product, a service or a strategy that innovates an existing market, thus posing competition for well-established technology. This usually caters to a small market or niche market because it cant afford to invest into research, development or marketing like well-established companies. Some examples to clarify the term: radiology was disrupted by ultrasounds, chemical photography was disrupted by digital photography and USBs were disrupted by cloud computing. In order to be able to produce or nurture innovation, one must understand existing products. For a business to be able to come up with new products or strategies, it needs to keep in touch with the latest tech news. It is essential for all business owners and managers to subscribe to good tech websites like http://www.sifrutech.com. This website dissects the latest gadgets and apps. Understanding these products and how they are received by the market can help you come up with new business strategies. Keep in mind that in order to innovate, you must be up to date with all types of new technology discoveries.
Sustaining innovation It can be of two kinds: revolutionary innovation and evolutionary innovation. Unlike the disruptive type, sustaining innovation expands and develops existing markets; thus it means investing in developing and bettering a certain product or service, or a certain business model or strategy.
Revolutionary innovation is one of the types of innovation that, as opposed to disruptive innovation, does not create a new market; instead, it innovates a product or a type of service in a way that the market does not expect, in a way that customers are not expecting. A good example is the automobile, which improved transportation in ways that people werent expecting, or telephony which made telegraphy obsolete. Nowadays there is a wide variety of cool new technology available which makes it very easy for people around the world to communicate and share ideas. In fact, if we consider the technological trends of the present, we can agree on the fact that sharing devices and software are the most revolutionary innovations of the present as they redefined the way that the use the internet.
Evolutionary innovation is the type of innovation that works on developing a product in a way that markets and consumers are expecting it. Thus, mobile telephony was an innovation to be expected from the fixed telephones that existed. Another example would be the fuel injection, which naturally replaced carburetors some thirty years ago.
The invention of automobiles was a revolutionary technological innovation in the beginning, because production was so expensive that it couldnt absorb the market for horse-drawn carriages for many years. However, once Ford industrialized and managed to produce many vehicles quickly and cheaply, it soon became disruptive innovation because more and more people would renounce the millennial-old carriage. Industrialization in itself soon became disruptive technology because it made man-made work obsolete by replacing it with faster-acting, better performing machinery that delivered standard quality.
These are the main types of innovation; by studying them further and looking for existing examples on the market, perhaps you too can come up with an idea to revolutionize the business market and thus find success.
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